C.R.S.
Section 10-3-520
Powers of liquidator
(1)
The liquidator shall have the power:(a)
To appoint a special deputy or deputies to act for the liquidator under this part 5, and to determine the reasonable compensation of such special deputy. The special deputy shall have all powers of the liquidator granted by this section. The special deputy shall serve at the pleasure of the liquidator.(b)
To employ employees, agents, legal counsel, actuaries, accountants, appraisers, consultants, and such other personnel as the liquidator may deem necessary to assist in the liquidation;(c)
To appoint, subject to the approval of the court, an advisory committee of policyholders, claimants, or other creditors including guaranty associations should such a committee be deemed necessary. Such committee shall serve at the pleasure of the commissioner and shall serve without compensation other than reimbursement for reasonable travel and per diem living expenses. No other committee of any nature shall be appointed by the commissioner or by the court in liquidation proceedings conducted under this part 5.(d)
To fix the reasonable compensation of employees, agents, legal counsel, actuaries, accountants, appraisers, and consultants subject to the approval of the court;(e)
To pay reasonable compensation to persons appointed and to defray from the funds or assets of the insurer all expenses of taking possession of, conserving, conducting, liquidating, disposing of, or otherwise dealing with the business and property of the insurer. In the event that the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the commissioner may advance the costs so incurred out of any appropriation for the maintenance of the division of insurance. Any amounts so advanced for expenses of administration shall be repaid to the commissioner for the use of the division out of the first available moneys of the insurer.(f)
To hold hearings, subpoena witnesses and compel their attendance, administer oaths, examine any person under oath, and compel any person to subscribe to the person’s testimony after it has been correctly reduced to writing; and, in connection therewith, to require the production of any books, papers, records, or other documents which the liquidator deems relevant to the inquiry;(g)
To audit the books and records of all agents of the insurer insofar as those records relate to the business activities of the insurer;(h)
To collect all debts and moneys due and claims belonging to the insurer, wherever located, and for this purpose:(I)
To institute timely action in other jurisdictions, in order to forestall garnishment or attachment proceedings against such debts;(II)
To do such other acts as are necessary or expedient to collect, conserve, or protect its assets or property, including the power to sell, compound, compromise, or assign debts for purposes of collection upon such terms and conditions as the liquidator deems best; and(III)
To pursue any creditors’ remedies available to enforce the liquidator’s claims;(i)
To conduct public and private sales of the property of the insurer;(j)
To use assets of the estate of an insurer under a liquidation order to transfer policy obligations to a solvent assuming insurer, if the transfer can be arranged without prejudice to applicable priorities under section 10-3-541;(k)
To acquire, hypothecate, encumber, lease, improve, sell, transfer, abandon, or otherwise dispose of or deal with any property of the insurer at its market value or upon such terms and conditions as are fair and reasonable. The liquidator shall also have power to execute, acknowledge, and deliver any and all deeds, assignments, releases, and other instruments necessary or proper to effectuate any sale of property or other transaction in connection with the liquidation.(l)
To borrow money on the security of the insurer’s assets or without security and to execute and deliver all documents necessary to such transaction for the purpose of facilitating the liquidation. Any funds so borrowed may be repaid as an administrative expense and may be given priority over any other claims in class 1 under the priority of distribution pursuant to section 10-3-541.(m)
To enter into such contracts as are necessary to carry out the order to liquidate, and to affirm or disavow any contracts to which the insurer is a party; except that the liquidator shall not disavow, reject, or repudiate a federal home loan bank security agreement or any pledge agreement, security agreement, collateral agreement, guarantee agreement, or other similar arrangement or credit enhancement relating to a security agreement to which a federal home loan bank is a party;(n)
To continue to prosecute and to institute in the name of the insurer or in the liquidator’s own name any and all suits and other legal proceedings, in this state or elsewhere, and to abandon the prosecution of claims deemed unprofitable to pursue further. If the insurer is dissolved under section 10-3-519, the liquidator shall have the power to apply to any court in this state or elsewhere for leave to be substituted for the insurer as plaintiff.(o)
To prosecute any action which may exist on behalf of the creditors, members, policyholders, or shareholders of the insurer against any officer of the insurer or any other person;(p)
To remove any records and property of the insurer to the offices of the commissioner or to such other place as may be convenient for the purposes of efficient and orderly execution of the liquidation. Guaranty associations and foreign guaranty associations shall have such reasonable access to the records of the insurer as is necessary for them to carry out their statutory obligations.(q)
To deposit in one or more banks in this state such sums as are required to meet current administration expenses and dividend distributions;(r)
To invest all sums not currently needed, unless the court orders otherwise;(s)
To file any necessary documents for record in the office of any recorder of deeds or record office where property of the insurer is located, in this state or elsewhere;(t)
To assert all defenses available to the insurer as against third persons, which defenses shall include but not be limited to statutes of limitation, statutes of frauds, and the defense of usury. A waiver of any defense by the insurer after a petition in liquidation has been filed shall not bind the liquidator. Whenever a guaranty association or foreign guaranty association has an obligation to defend any suit, the liquidator shall give precedence to such obligation and may defend only in the absence of a defense by such guaranty associations.(u)
To exercise and enforce all the rights, remedies, and powers of any creditor, shareholder, policyholder, or member, including any power to avoid any transfer or lien that may be conferred by law whether or not such power is conferred by sections 10-3-525 to 10-3-527;(v)
To intervene in any proceeding, wherever instituted, which could result in the appointment of a receiver or trustee, and to act as the receiver or trustee whenever such appointment is offered;(w)
To enter into agreements with any receiver, commissioner, or insurance department of any other state relating to the rehabilitation, liquidation, conservation, or dissolution of an insurer doing business in both states;(x)
To exercise, in a manner consistent with the provisions of this part 5, all powers now held or hereafter conferred upon receivers by the laws of this state.(2)
Intentionally left blank —Ed.(a)
If a company placed in liquidation issued liability policies on a claims-made basis, and if such policies provided an option to purchase an extended period to report claims, then the liquidator may make available to holders of such policies, for a charge, an extended period to report claims subject to the conditions stated in this subsection (2). The extended reporting period shall be made available only to those insureds who have not secured substitute coverage. The extended period made available by the liquidator shall begin upon termination of any extended period to report claims in the basic policy and shall end at the earlier of the final date for filing of claims in the liquidation proceeding or eighteen months after the order of liquidation.(b)
The extended period to report claims made available by the liquidator shall be subject to the terms of the policy to which it relates. The liquidator shall make available such extended period within sixty days after the order of liquidation at a charge to be determined by the liquidator subject to approval of the court. Such offer shall be deemed rejected unless the offer is accepted in writing and the charge is paid within ninety days after the order of liquidation. No commissions, premium taxes, assessments, or other fees shall be due on the charge pertaining to the extended period to report claims.(3)
The enumeration, in this section, of the powers and authority of the liquidator shall not be construed as a limitation upon the liquidator, nor shall it exclude in any manner the liquidator’s right to do such other acts not specifically enumerated or otherwise provided for in this section as may be necessary or appropriate for the accomplishment of, or in aid of the purpose of, liquidation.(4)
Notwithstanding the powers of the liquidator as stated in subsections (1) and (2) of this section, the liquidator shall have no obligation to defend claims or to continue to defend claims subsequent to the entry of a liquidation order.
Source:
Section 10-3-520 — Powers of liquidator, https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-10.pdf (accessed Oct. 20, 2023).
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