SENATE BILL NO. 245
AN ACT TO AMEND CHAPTER 59, TITLE 18, DELAWARE CODE RELATING TO LIQUIDATION OF DOMESTIC INSURERS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend §5911, Chapter 59, Title 18, Delaware Code striking said §5911 in its entirety and substituting in lieu thereof a new §5911 to read as follows:
"§5911. Order of liquidation; insolvent insurer's assets
(a) An order to liquidate the business of a domestic insurer shall direct the Commissioner forthwith to take possession of the property of the insurer, to liquidate its business, to deal with the insurer's property and business in his own name as Insurance Commissioner or in the name of the insurer, as the court may direct, and to give notice to all creditors who may have claims against the insurer to present such claims.
(b) The Commissioner may apply for and secure an order dissolving the corporate existence of a domestic insurer upon his application for an order of liquidation of such (insurer or at any time after such order has been granted.
(c) Within One Hundred Twenty (120) days of a final determination of insolvency of a company, the Commissioner shall apply for a proposed order to disburse assets out of such company's marshalled assets, from time to time as such assets become available to the Delaware Insurance Guaranty Association and to any entity or person performing a similar function in another jurisdiction having substantially the same provisions of law.
1. Such proposed order shall at least include provision for:
i. Reserving amounts for the payment of expenses to administration and the payment of claims of secured creditors (to the extent the value of the security held) and claims falling within the priorities established in §5915 through §5919, §5924 through §5927 and §5929.
ii. Disbursement of the assets marshalled to date and subsequent disbursements of assets as they become available.
iii. Equitable allocation disbursements to the Delaware Insurance Guaranty Association and similar entities entitled thereto.
i. The securing by the Commissioner as receiver in each of the associations entitled to disbursement pursuant to this Section of an agreement to return to the receiver such assets previously disbursed as may be required to pay claims of secured creditors and claims falling within the priorities established in §5915 through §5919, §5924 through §5927 and §5929 in accordance with such priorities. No bond shall be required of any such association.
i. A full report to be made by the association to the receiver accounting for all assets so disbursed to the association, all disbursements made therefrom, any interest earned by the association on such assets and any matter as the court may direct.
2. The Commissioner's proposed order shall provide for disbursements to the Delaware Insurance Guaranty Association and any entity or person performing a similar function in another jurisdiction in amounts estimated at least equal to the claim payments made or to be made thereby for which such association could assert a claim against the Commissioner as receiver, and shall further provide that if the assets available for disbursement from time to time do not equal nor exceed the amount of such claim payments made or to be made by the Delaware Insurance Guaranty Association in a similar entity in another jurisdiction, then disbursements shall be in the amount of available assets.
3. Notice of such proposed order shall be given to the Delaware Insurance Guaranty Association and the Commissioners of Insurance of each state and the District of Columbia. Any such notice shall be deemed to have been given when deposited in the United States certified mails, first-class postage prepaid, at least thitty (30) days prior to the submission of such application to the court. Action on the proposed order may be taken by the court provided the above required notice has been given and provided further that the Commissioner's proposed order complies with Subsection 1-i and 1-iv."
Approved July 11, 1977.