507C.12 Grounds for rehabilitation. 1. The commissioner may petition the district court for an order to rehabilitate a domestic insurer or an alien insurer domiciled in this state on any of the following grounds: a. The insurer is in a condition that the further transaction of business would be financially hazardous to its policyholders, creditors, or the public. b. There is reasonable cause to believe that there has been embezzlement from the insurer, wrongful sequestration or diversion of the insurer’s assets, forgery or fraud affecting theinsurer, or other illegal conduct in, by, or with respect to the insurer that, if established, wouldendanger assets in an amount threatening the solvency of the insurer. c. The insurer has failed to remove a person, whether an officer, manager, general agent, employee, or other person, who in fact has executive authority in the insurer, if the person hasbeen found after notice and hearing by the commissioner to be dishonest or untrustworthyin a way affecting the insurer’s business. d. Control of the insurer is in a person or persons found after notice and hearing to be untrustworthy. by the commissioner to be dishonest or untrustworthyin a way affecting the insurer’s business. d. Control of the insurer is in a person or persons found after notice and hearing to be untrustworthy. Control may be by stock ownership or by other means and may be direct orindirect. e. A person who in fact has executive authority in the insurer, whether an officer, manager, general agent, director or trustee, employee, or other person has refused to beexamined under oath by the commissioner concerning the insurer’s affairs, in this stateor elsewhere, and after reasonable notice of the fact the insurer has failed promptly andeffectively to terminate the employment and status of the person and all the person’sinfluence on management. f. After demand by the commissioner under chapter 507 or under this chapter, the insurer has failed to promptly make available for examination any of its property, books, accounts,documents, or other records, or those of a subsidiary or related company within the controlof the insurer, or those of a person having executive authority in the insurer so far as theypertain to the insurer. g. or other records, or those of a subsidiary or related company within the controlof the insurer, or those of a person having executive authority in the insurer so far as theypertain to the insurer. g. Without first obtaining the written consent of the commissioner, the insurer has transferred, or attempted to transfer, in a manner contrary to chapter 521 or 521A,substantially its entire property or business, or has entered into a transaction the effect ofwhich is to merge, consolidate, or reinsure substantially its entire property or business in orwith the property or business of any other person. h. The insurer or its property has been or is the subject of an application for the appointment of a receiver, trustee, custodian, conservator or sequestrator or similar fiduciaryof the insurer of its property other than as authorized under the insurance laws of this state,and the appointment has been made or is imminent, and the appointment might oust thecourt of this state of jurisdiction or might prejudice orderly delinquency proceedings underthis chapter. i. Within the previous three years the insurer has willfully violated its charter or articles of incorporation, its bylaws, an on or might prejudice orderly delinquency proceedings underthis chapter. i. Within the previous three years the insurer has willfully violated its charter or articles of incorporation, its bylaws, an insurance law of this state, or a valid order of the commissionerunder section 507C.9. j. The insurer has failed to pay within sixty days after the due date an obligation to a state or any subdivision of a state or a judgment entered in a state, if the court in whichthe judgment was entered had jurisdiction over the subject matter. However, nonpaymentshall not be a ground until sixty days after a good faith effort by the insurer to contest theobligation has been terminated whether the effort is before the commissioner or in the courts,or the insurer has systematically attempted to compromise or renegotiate previously agreedsettlements with its creditors on the ground that it is financially unable to pay its obligationsin full. k. The insurer has failed to file its annual report or other financial report required within the time allowed and, after written demand by the commissioner, has failed to immediatelygive an adequate explanation. l. as failed to file its annual report or other financial report required within the time allowed and, after written demand by the commissioner, has failed to immediatelygive an adequate explanation. l. The board of directors or the holders of a majority of the shares entitled to vote, or a majority of those individuals entitled to the control of those entities request or consent torehabilitation under this chapter. Sat Dec 23 00:39:34 2023 Iowa Code 2024, Section 507C.12 (19, 0) §507C.12, INSURERS SUPERVISION, REHABILITATION, AND LIQUIDATION 2 2. If the petition alleges that extraordinary circumstances exist and that there is imminent substantial risk to the insurer’s solvency if the insurer is not immediately placed intorehabilitation, the court may issue, ex parte and without a hearing, the requested order ofrehabilitation. An insurer subject to an ex parte order under this section may petition thecourt after the issuance of the order for a hearing and review of the order. The court shallhold the hearing and review not more than fifteen days after the request. A hearing underthis section may be held privately in chambers. he order for a hearing and review of the order. The court shallhold the hearing and review not more than fifteen days after the request. A hearing underthis section may be held privately in chambers. Upon the request of the insurer, the hearingshall be held privately in chambers. 84 Acts, ch 1175, §12; 91 Acts, ch 26, §35; 2012 Acts, ch 1023, §157Referred to in §507C.9, 507C.16, 507C.17, 507C.50, 507C.51 Sat Dec 23 00:39:34 2023 Iowa Code 2024, Section 507C.12 (19, 0)
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