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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
SENATE BILL 1246 By: Quinn
AS INTRODUCED
An Act relating to insurance receivership; ame nding
36 O.S. 2021, Sections 1636, 1901, 1918, 1930, and
1938, which relate to transactions within an
insurance holding company , definitions, claims
against an insurer, and delinquency proceedings;
directing Insurance Commissioner to make certain
determinations; requiring certain insurers secure
funds under certain circumstances; maintaining
property ownership over certain documents, records,
and funds; requiring certain documents be provid ed to
certain persons; authorizing restrictions against use
of data under certain circumstances; providing fo r
access to records when a default of lease or
agreement occurs; establishing provisions for
jurisdiction of parties to insurer agreement;
modifying definition; establishing compliance
measures; modifying time period for reporting certain
claim to court; providing for certain alternative
court procedures in claim hearings; establishing
service list for certain claim no tices; establishing
requirements for providing notice and hearing
information; establishing objection process;
conforming language; and providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2021, Section 1636, is
amended to read as follows:
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Section 1636. A. 1. Transactions within an insurance ho lding
company system to which an insurer subject t o registration is a
party shall be subject to the fol lowing standards:
a. the terms shall be fair and reasonable,
b. agreements for cost-sharing services and management
shall include such provisions as requ ired by rule and
regulation issued by the Insurance Commissioner,
c. charges or fees for services perfo rmed shall be
reasonable,
d. expenses incurred and payment received shall be
allocated to the insurer in conformity with customary
insurance accounting p ractices consistently applied,
e. the books, accounts and records of each party to all
such transactions shall be so maintained as to clearly
and accurately disclose the nature and details of the
transactions including such accounting information as
is necessary to support the reasonableness of the
charges or fees to the respective parties, and
f. the insurer's surplus as regards policyholders
following any dividends or distributions to
shareholder affiliates shall be r easonable in relation
to the insurer's outstanding liabilities and adequate
to meet its financial needs,
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g. if an insurer subject to this act is deemed by the
Commissioner to be in a ha zardous financial condition
pursuant to Section 1905 of this title and regulations
pursuant to Title 365 of the Oklahoma Administrative
Code or a condition tha t would be grounds for
supervision, conservation , or a delinquency
proceeding, the Commissioner may require the insurer
to secure and maintain from any affiliate with whom
the insurer has a service or manag ement agreement
either a deposit held by the Commissioner or a bond,
as determined by the insurer at the insurer 's
discretion, for the protection of the insurer for the
duration of the contract, agreement, or existence of
the condition for which the Commissioner required the
deposit or the bond. In determining whether a deposit
or a bond is required, the Commissioner should
consider whether concerns exist with respect to the
affiliated person's ability to fulfill the contract or
agreement if the insurer were to be put into
liquidation. Once the insurer is deemed to be in a
hazardous financial condition or a condition that
would be grounds for supervision, conservation , or a
delinquency proceeding, and a deposit or bond is
necessary, the Commissioner has discretion to
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determine the amount of the depo sit or bond, not to
exceed the value of the contract or agreement in any
one year, and whether such deposit or bond should be
required for a single contract, multiple contracts , or
a contract only with a specific person,
h. all records and data of the insur er held by an
affiliate shall remain the property of the insurer .
All records and data of the insurer shall be subject
to the control of the insurer, identifiable, and
segregated or readily capable of segregati on, at no
additional cost to the insurer, from all other
persons' records and data. This includes all records
and data in any form that are otherwise the property
of the insurer including, but not limited to, claims
and claim files, policyholder lists, ap plication
files, litigation files, premium records , rate books,
underwriting manuals, personnel records, financial
records, or similar records within the possession,
custody, or control of the affiliate. At the request
of the insurer, the affiliate shall provide the
receiver all records of any type that pertain to the
insurer's business, access to the operating systems on
which the data is main tained, and the software that
runs those systems eit her through assumption of
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licensing agreements or otherwise. The receiver may
restrict the use of the data by t he affiliate if it is
not operating the insurer's business. The affiliate
shall provide a waive r of any landlord lien or other
encumbrance to give the insurer access to all records
and data in the event of the affiliate's default under
a lease or other agreement, and
i. premiums or other funds belonging to the insurer that
are collected by or held b y an affiliate are the
exclusive property of the i nsurer and are subject to
the control of the insurer. Any right of offset in
the event an insurer is placed i nto receivership shall
be subject to Article 19 of this title.
2. The following transactions inv olving a domestic insurer and
any person in its insurance holding company system , including
amendments or modifications of affiliate agreements previously file d
pursuant to this section, which are subject to any materiality
standards contained in subparagr aphs a through g of this paragraph,
shall not be entered into unless the insurer has notified the
Commissioner in writing of its intention to enter into the
transaction at least thirty (30) days prior thereto, or such shorter
period as the Commissioner may permit, and the Commissioner has not
disapproved it within that period. The notice for amend ments or
modifications shall include the reasons for the change a nd the
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financial impact on the domestic insurer. Informal notice shall be
reported, within thirt y (30) days after a termination of a
previously filed agreement, to the Commissioner for deter mination of
the type of filing required, if any:
a. sales, purchases, exchanges, loans, extensions of
credit, or investments, provided the transactions are
equal to or exceed:
(1) with respect to nonlife insure rs, the lesser of
three percent (3%) of the in surer's admitted
assets or twenty-five percent (25%) of surplus a s
regards policyholders as of the 31st day of
December next preceding, and
(2) with respect to life insurers, three percent (3%)
of the insurer's admitted assets as of the 31st
day of December next preceding,
b. loans or extensions of credit to any person who is not
an affiliate, where the insurer makes loans or
extensions of credit with the agreement or
understanding that the proceeds of the trans actions,
in whole or in substantial part, are to be used to
make loans or extensions of credit to, to purchase
assets of, or to make investments in, any affiliate of
the insurer making the loans or extensions of credit
provided the transactions are equal t o or exceed:
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(1) with respect to nonlife insur ers, the lesser of
three percent (3%) of the insurer 's admitted
assets or twenty-five percent (25%) of surplus as
regards policyholders as of the 31st day of
December next preceding, and
(2) with respect to life insurers, three percent (3%)
of the insurer's admitted assets as of the 31st
day of December next preceding,
c. reinsurance agreements or modifications thereto,
including:
(1) all reinsurance pooling agreem ents, and
(2) agreements in which the reinsuranc e premium or a
change in the insurer 's liabilities, or the
projected reinsurance premium or a change in the
insurer's liabilities in any of the next three
(3) years, equals or exceeds five percent (5%) of
the insurer's surplus as regards policyholders,
as of the 31st day of December next preceding ,
including those agreements which may require as
consideration the transfer of assets from an
insurer to a nonaffiliate, if an agreement or
understanding exists betw een the insurer and
nonaffiliate that any portio n of the assets will
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be transferred to one or more affiliates of the
insurer,
d. all management agreements, ser vice contracts, tax
allocation agreements, guarantees and all cost -sharing
arrangements,
e. guarantees when made by a domestic insurer; provided,
however, that a guarantee which is quantifiab le as to
amount is not subject to the notice requirements of
this paragraph unless it exceeds the lesser of one-
half of one percent (.5%) of the insurer 's admitted
assets or ten percent (10%) of surplus as rega rds
policyholders as of the 31st day of Decemb er next
preceding. Further, all guarantees which are not
quantifiable as to amount are subject to the notice
requirements of this paragraph,
f. direct or indirect acquisitions or investments in a
person that controls the insurer or in an affiliate of
the insurer in an amount which, together with its
present holdings in such investments, exceeds two and
one-half percent (2.5%) of the insurer 's surplus to
policyholders. Direct or indirect acquisitions or
investments in subsidiaries acquired pursuant to
Section 2 of this act (or authorized under any other
section of this title), or in nonsubsidiary insurance
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affiliates that are subject to the provisions of this
act, are exempt from this requirement, and
g. any material transactions, specified by regulation,
which the Commissioner determines may adversely affect
the interests of the insurer's policyholders.
Nothing in this paragraph shall be deemed to authorize or perm it
any transactions which, in the case of an ins urer not a member of
the same insurance holdin g company system, would be otherwise
contrary to law.
3. A domestic insurer may not enter into transactions which are
part of a plan or series of like transactio ns with persons within
the insurance holding com pany system if the purpose of those
separate transactions is to avoid the statutory threshold amount and
thus avoid the review that would occur otherwise. If the
Commissioner determines that separate transac tions were entered into
over any twelve-month period for that purpose, the Commissioner may
exercise his or her authority under Section 11 of this act.
4. The Commissioner, in reviewing transactions pursuant to
paragraph 2 of this subsection, shall consid er whether the
transactions comply with the stan dards set forth in paragraph 1 of
this subsection and whether they may adversely affect the interests
of policyholders.
5. The Commissioner shall be notified within thirty (30) days
of any investment of the domestic insurer in any one corporation if
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the total investment in the corporation by the insu rance holding
company system exceeds ten percent (10%) of the cor poration's voting
securities.
6. Any affiliate that is party to an agreement or contract with
a domestic insurer that is subject to subparagraph d of paragraph 2
of subsection A of this section shall be subject to the jurisdiction
of any supervision, seiz ure, conservatorship or receivership
proceedings against the insurer and to the auth ority of any
supervisor, conservator , rehabilitator or liquidator for the insurer
appointed pursuant to Articles 18 and 19 of this title for the
purpose of interpreting, en forcing and overseeing the affiliate's
obligations under the agreement or contract to perform services for
the insurer that:
a. are an integral part of the insurer 's operations
including but not limited to management,
administrative, accounting, data proce ssing,
marketing, underwriting, claims handling, investment,
any other similar functions , or
b. are essential to the insurer 's ability to fulfill its
obligations under insurance policies.
7. The Commissioner may require that an agreement or contrac t
pursuant to subparagraph d of paragraph 2 of subsection A of this
section for the provision of services described in subparagraphs a
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and b of paragraph 6 of subsection A of this section that the
affiliate consents to the jurisdiction as set forth in this section.
B. No domestic insurer shall pay any extraordinary dividend or
make any other extraordinary distribution to its sh areholders until
thirty (30) days after the Commissioner has received notice of the
declaration thereof and has not within tha t period disapproved the
payment, or until the Commissioner has approved the payment within
the thirty-day period. For purposes o f this section, an
extraordinary dividen d or distribution includes any dividend or
distribution of cash or other property whos e fair market value
together with that of other dividends or distributions made within
the preceding twelve (12) months exceeds th e greater of:
1. Ten percent (10%) of t he insurer's surplus as regards
policyholders as of the 31st day of December next prec eding; or
2. The net gain from operations of the insurer, if the insurer
is a life insurer, or the net income, if the insurer is not a life
insurer, not including realiz ed capital gains, for the twelve -month
period ending the 31st day of December next pre ceding, but shall not
include pro rata distributions of any class of the insurer 's own
securities.
In determining whether a divide nd or distribution is
extraordinary, an insurer other than a life insurer may carry
forward net income from the previous two ( 2) calendar years that has
not already been paid out as dividends. This carry -forward shall be
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computed by taking the net income from the second and third
preceding calendar years, not including realized capital gai ns, less
dividends paid in the second an d immediate preceding calendar years.
Notwithstanding any other provision of law, an insurer may
declare an extraordinary dividend or distribution which is
conditional upon the Commissioner's approval, and the declar ation
shall confer no rights upon shareh olders until (1) the Commissioner
has approved the payment of the dividend or distribution or (2) the
Commissioner has not disappr oved payment within the thirty -day
period.
C. 1. Notwithstanding the control of a do mestic insurer by any
person, the officers and directors of the insurer shall not thereby
be relieved of any obligation or liability to which they would
otherwise be subject by law, and the insurer shall be man aged so as
to assure its separate operating id entity consistent with this act.
2. Nothing in this section shall preclude a domestic insurer
from having or sharing a common manage ment or cooperative or joint
use of personnel, property or services with one or more other
persons under arrangements meeti ng the standards of paragraph 1 of
subsection A of this section.
3. Not less than one-third (1/3) of the directors of a domestic
insurer, and not less than one -third (1/3) of the members of each
committee of the board of directors of any domestic insurer, shall
be persons who are not officers o r employees of the insurer or of
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any entity controlling, controlled by, or under common contr ol with
the insurer and who are not b eneficial owners of a controlling
interest in the voting stock of the insurer or entit y. At least one
such person must be inc luded in any quorum for the transaction of
business at any meeting of the board of directors or any committee
thereof.
4. The board of directors of a domestic insurer sh all establish
one or more committees comprised solely of directors who are not
officers or employees of the insurer or of any entity controlling,
controlled by, or under common co ntrol with the insurer and who are
not beneficial owners of a controlling int erest in the voting stock
of the insurer or an y such entity. The committee or committ ees
shall have responsibility for nominating candidates for director for
election by sharehol ders or policyholders, evaluating the
performance of officers deemed to be pr incipal officers of the
insurer and recommendi ng to the board of directors the selecti on and
compensation of the principal officers.
5. The provisions of paragraphs 3 and 4 of th is subsection
shall not apply to a do mestic insurer if the person controlling the
insurer, such as an insurer, a mutual ins urance holding company, or
a publicly held corporation, has a board of directors and committees
thereof that meet the requirements of paragraphs 3 and 4 of this
subsection with respect to such controlling entit y.
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6. An insurer may make application to the Commissioner for a
waiver from the requi rements of this subsection, if the insurer's
annual direct written and assumed premium, exclu ding premiums
reinsured with the Fede ral Crop Insurance Corporation and Federal
Flood Program National Flood Insurance Progra m, is less than Three
Hundred Million Dollars ($300,000,000.00). An insurer may also make
application to the Commissi oner for a waiver from the requirements
of this subsection based upon unique circum stances. The
Commissioner may consider various factors including, but not limited
to, the type of business entity, volume of business written,
availability of qualified boa rd members, or the ownership or
organizational structure of the entity.
D. For purposes of this act, in determining whethe r an
insurer's surplus as regards policyholder s is reasonable in relation
to the insurer's outstanding liabilities and adequate to me et its
financial needs, the following factors, among others, shall be
considered:
1. The size of the insurer as measured b y its assets, capital
and surplus, reserves, p remium writings, insurance in force and
other appropriate criteria;
2. The extent to which the insurer's business is diversified
among several lines of insurance;
3. The number and size of risks insured in ea ch line of
business;
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4. The extent of the geo graphical dispersion of the insurer's
insured risks;
5. The nature and extent of the i nsurer's reinsurance program;
6. The quality, diversification and liquidity of the insurer's
investment portfolio;
7. The recent past and projected future trend in the size of
the insurer's investment portfolio;
8. The surplus as regards policyholders m aintained by other
comparable insurers;
9. The adequacy of the insurer 's reserves; and
10. The quality and liquidity of i nvestments in affiliates.
The Commissioner may treat any such investment as a disallowed asset
for purposes of determining the adequ acy of surplus as regards
policyholders whenev er in the judgment of the Commissione r the
investment so warrants.
SECTION 2. AMENDATORY 36 O.S. 2021, Section 1901, is
amended to read as follows:
Section 1901. For the purpose of Article 19 of the Insurance
Code:
1. "Impairment" or "insolvency." The capital of a stock
insurer, or limited stock life, a ccident and health insurer, the net
assets of a Lloyds Lloyd’s association, or the surplus of a mutual
or reciprocal insurer, shall be deemed to be impaired and the
insurer shall be deemed to be insolvent, when such insurer shall not
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be possessed of assets at leas t equal to all liabilities and
required reserves together with its total issued and outstanding
capital stock if a stock insurer, the net assets if a Lloyds Lloyd’s
association, or the minimum surplus if a mutual or reciprocal
insurer required by this code to be maintained for the kind or kinds
of insurance it is then authorized to transact.
2. "Insurer" means any person, firm, corporation, health
maintenance organizations, association or aggregation of persons
doing an insurance business and subject to the insur ance supervisory
authority of, or to liquidatio n, rehabilitation, reorganization or
conservation by the Insurance Commissioner or the equivalent
insurance supervisory official of another state.
3. "Delinquency proceeding " means any proceeding commenced
against an insurer pursuant to this article for t he purpose of
liquidating, rehabilitating, reorganizing or conserving such
insurer.
4. "State" means any state of the United States and also the
District of Columbia, Alaska, Hawaii, and Puerto Rico.
5. "Foreign country" means territory not in any state.
6. "Domiciliary state" means the state in which an insurer is
incorporated or organiz ed, or in the case of an insurer incorporated
or organized in a foreign country, the state in which such insurer,
having become authorized to do business in such state, has at the
commencement of delinquency proceedings, the largest amount of its
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assets held in trust and assets held on deposit for the benefit of
its policyholders or policyholders and creditors in the United
States, and any such insurer is deemed to be dom iciled in such
state.
7. "Ancillary state" means any state other than a domiciliary
state.
8. "Reciprocal state" means any state other than this state in
which in substance and effect the provisions of the U niform Insurers
Liquidation Act, as defined in Section 1921 of this title, are in
force, including the provisions requiring that the I nsurance
Commissioner or equivalent insurance supervisory official be the
receiver of a delinquent insurer that has enacted a law that sets
forth a scheme for the admini stration of an insurer in receivership
by the state's insurance commissioner, or compar able insurance
regulatory official.
9. "General assets" means all property, real, personal or
otherwise, not specifically mortgaged, pledged, deposited or
otherwise encumbered for the security or benefit of specified
persons or a limited class or classes of persons, and as to such
specifically encumbered property the term includes all such property
or its proceeds in excess of the amount necessary to discharge the
sum or sums secured thereby. Assets held in trust and assets held
on deposit for the securit y or benefit of all policyholders or all
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policyholders and creditors in the United States shall be deemed
general assets.
10. "Preferred claim" means any claim with res pect to which the
law of the state or of the United States accords priority of
payments from the general assets of the insurer.
11. "Special deposit claim " means any claim secured by a
deposit made pursuant t o statute for the security or benefit of a
limited class or classes of persons, but not including any general
assets.
12. "Secured claim" means any claim secured by mortgage, trust
deed, pledge, deposit as security, escrow, or otherwise, but not
including special deposit claim or claims against genera l assets.
The term also includes claims which more than four months prior to
the commencement of delinquency proceedings in the state of the
insurer's domicile have become liens upon specific assets by reason
of judicial process.
13. "Receiver" means receiver, liquidator, rehabilitator, or
conservator as the context may require.
SECTION 3. AMENDATORY 36 O.S. 2021, Section 1918, is
amended to read as follows:
Section 1918. A. All claims against an insurer against which
delinquency proceedings have been begun shall set forth in
reasonable detail the amount of the c laim, or the basis upon which
such amount can be ascertained, the facts upon which the claim is
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based, and the priorities asserted, if any. All such claims shall
be verified signed by the affidavit of the claimant, or someone
authorized to act on his the claimant's behalf and having knowledge
of the facts, and shall be supported by such docu ments as may be
material thereto. Claimant shall, in the time and man ner set forth
by the receiver, fully comply with any and all requests by the
receiver for providing information or evidence that is supplementary
to the information that is required p ursuant to Article 19 of this
title including, but not limited to, testimony under oat h,
affidavits, and depositions.
B. All claims filed in this state shall be filed wit h the
receiver, whether domiciliary or ancillary, in this state, on or
before the last date for filing as specified in this article by the
court.
C. Within ten (10) days of the receipt of any claim, or within
such further period as the court may , for good cause shown; fix, the
receiver shall report the claim to the court, specifying in such
report his the receiver's recommendation with respect to the action
to be taken thereon. Upon receipt of such report, the court shall
fix a time for hearing the claim and shall direct that the claimant
or the receiver, as the court shall specify, shall give such notice
as the court shall determine to such persons as shall appear to th e
court to be interested therein. All such notices shall specify the
time and place of the hearing and shall concisely state the amount
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and nature of the claim, the priorities asserted, if any, and the
recommendation of the receiver with reference thereto .
D. At the hearing, all persons interested shall be entitled to
appear and the court shall enter an order allowing, allowing in
part, or disallowing the claim. Any such order shall be deemed to
be an appealable order.
SECTION 4. AMENDATORY 36 O.S. 2021, Section 1930, is
amended to read as follows:
Section 1930. A. If upon commencement of delinquency
proceedings under this article or at any time during the proceedings
the insurer shall not be clearly solvent, the court shall, after
such notice and hearing as it deems proper, make an order declaring
the insurer to be insolvent. Thereupon, regardless of any prior
notice which may have been given to creditors, the Insurance
Commissioner shall notify all persons who may have claim s against
the insurer and who have not filed proper proofs thereof to present
the same to the Commissioner, at a place specified in the notice,
within four (4) months from the date of entry of the order, or
within a longer time prescribed by the court not to exceed one
hundred eighty (180) days which shall be specified in the notice.
The notice shall be given in a manner determined by the court.
B. Only upon application of the liquidator, the receivership
court may allow alternative procedures and requir ements for the
filing of proofs of claim or for allowing or proving claims. Upon
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application, if the court dispenses with the requirements of filing
a proof of claim by a person, class , or group of persons, a p roof of
claim for such a person, class , or group shall be deemed as having
been filed for all purposes, except that the receivership c ourt's
waiver of proof of claim requirements shall not impact guarant y
association proof of claim filing requirement or co verage
determinations to the extent that the g uaranty fund statute or
filing requirements are inconsistent with the court's waiver of
proof.
C. Proofs of claim may be filed after the date specified in the
notice, but no such claim shall share in the distr ibution of the
assets until all allowed claims , proofs of which have been filed
before that date, have been paid in full with interest .
SECTION 5. AMENDATORY 36 O.S. 2021, Section 1938, is
amended to read as follows:
Section 1938. A. Upon written notice to the receiver, a p erson
shall be placed on the service list to receive notice of matters
filed by the receiver. It shall be the responsibility of the person
requesting notice to inform the receiver in writing of any changes
to his or her address, or to request that his or h er name be deleted
from the service list. The receiver may require that the person on
the service list provide confirmation that they wish to remain on
the service list. Any person who fails to confirm upon the
receiver's request may be removed from the service list. Inclusion
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on the service list does not confer standing in the delinquenc y
proceeding to raise, appear or be heard on any issue.
B. Except as otherwise provided by this act, notice and hearing
of any matter submitted by the receiver to the rece ivership court
for approval pursuant to this act shall be conducted as follows:
1. The receiver shall file an application explaining the
proposed action and the basis for such action. The receiver may
include any evidence in support of the application. If the receiver
determines that any documents supporting the application are
confidential, the receiver may submit them to the receivership court
under seal for in camera inspection ;
2. The receiver shall provide notice of the application to all
persons on the service list and any other parties as determined by
the receiver. Notice may be provided by first class mail postage
paid, electronic mail, or facsimile transmission, at the receiver 's
discretion. For purposes of this section, notice is deemed to b e
given on the date that it is deposited with the United States
Postmaster or transmitted, as applicable, to the last known address
as shown on the service list ;
3. Any party in interest objecting to the a pplication shall
file an objection specifying the grounds therefore within fourteen
(14) days or such longer time as the court may specify in the notice
of the filing of the application and shall serve copies on the
receiver and any other persons served wi th the application within
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the same time period. An objecting party shall have the burden of
showing why the receivership court should not authorize the proposed
action;
4. If no objection to the application is timely filed, the
receivership court may ent er an order approving the application
without a hearing or hold a hearing to determine if the recei ver's
application should be approved. The receiver may request that the
receivership court enter an order or hold a hearing on an expedited
basis; and
5. If an objection is timely filed, the receivership c ourt may
hold a hearing. If the receivership court approves the application
and, upon a motion by the receiver, determines that the objection
was frivolous or filed merely for delay or for other improper
purpose, the receivership court shall order the obj ecting party to
pay the receiver's reasonable costs and fees of defending the
action.
A. C. In any proceeding commenced against an insurer pursuant
to Article 18 by a judicial proceeding or Article 19 of this title
for the purpose of liquidating, rehabili tating, reorganizing, or
conserving such insurer, h ereinafter called delinquency proceeding,
the compensation of personnel employed or retained to assist the
Insurance Department Commissioner with the proceeding shall be
approved by the court at a full hearing before the compensation may
be paid. The Insurance Commissioner shall apply to the court for
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the hearing approval; provided, that if any board has been created
by law to commence and administer delinq uency proceedings under
Article 18 or 19 of this t itle, or if any board or association is
authorized by the Commissioner to provide assistance to the
Commissioner, the board or association shall apply to the court.
Provided, this section shall not apply t o a supervisorship
authorized by Article 18 of thi s title.
B. D. Upon receiving the application for approval of
compensation, the court shall schedule a hearing. The the party
responsible for the filing of the application shall cause notice in
writing of the application, time to file objections , and hearing to
be served upon the following persons not le ss than ten (10) days
before the hearing is scheduled objection period expires:
1. The persons or firms requesting the compensation;
2. The Commissioner, if not the applicant; and
3. Ten persons, or suc h lesser number as there may be, who hold
the largest number of shares in the insurance company involved in
the delinquency proceeding, as indicated by the company's stock
register as of the time that the c ompany was placed under
supervision pursuant to Se ction 1804 of this title or at the time
that an application was filed with the court for the commencement of
a delinquency proceeding pursuant to Se ction 1903 of this title.
Said shareholders shall serve a s representatives of the insurance
company.
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C. E. The notice shall state the time and period for filing
objections, place of the hearing if there are objections, the
reasons for the hearing , and the following rights of any party
served with notice:
1. To appear in person at the hearing or to be represen ted by
counsel;
2. To testify under oath, call wit nesses to testify, and
furnish documentary evidence, relevant to the determination of the
compensation;
3. To cross-examine witnesses and have a reasonabl e opportunity
to inspect all documentary evidence; and
4. To subpoena witnesses and compel the produ ction of testimony
and documents, relevant to the determination of the compensation.
The person making service shall make an affidavit of such service
and file the notice and affidavit with the court.
D. F. At the hearing, the court shall fully investiga te the
compensation of persons employed or retained to assist the Insurance
Department Commissioner with the conduct of the delinquency
proceeding. The court shall not approve the compensation until it
has been made to appear to the satisfaction of the co urt, based upon
competent evidence, that such compensation is justified.
SECTION 6. This act shall become effective November 1, 2022.
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