MISSISSIPPI LEGISLATURE
2023 Regular Session
To: Insurance
By: Representative Zuber
AN ACT TO PROVIDE PROCEDURES AND CERTAIN RIGHTS REGARDING COLLATERAL IN FEDERAL HOME LOAN BANKS' DELINQUENCY PROCEEDINGS; TO AMEND SECTION 83-24-7, MISSISSIPPI CODE OF 1972, TO DEFINE THE TERM "FEDERAL HOME LOAN BANK"; TO AMEND SECTIONS 83-24-11, 83-24-29, 83-24-41, 83-24-51 AND 83-24-55, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT A FEDERAL HOME LOAN BANK SHALL NOT BE PROHIBITED FROM EXERCISING OR ENFORCING ANY RIGHT OR CAUSE OF ACTION REGARDING COLLATERAL PLEDGED UNDER A SECURITY AGREEMENT OR OTHER SIMILAR AGREEMENT OR ARRANGEMENT TO WHICH SUCH BANK IS A PARTY; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) Notwithstanding any other provision of this title, any secured claim that a federal home loan bank has on an insurer who is subject to a delinquency proceeding under this chapter is governed exclusively by this section.
(2) Notwithstanding any other provision of this title, a receiver shall not void a redemption or repurchase of any stock or equity securities made by a federal home loan bank within four (4) months of the commencement of the delinquency proceedings or that received prior approval of the receiver. However, a transfer is voidable if the transfer is made with the actual intent to hinder, delay, or defraud the insurer member, the receiver for the insurer member, existing creditors, or future creditors.
(3) If a federal home loan bank exercises its rights regarding collateral pledged by an insurer member who is subject to a delinquency proceeding, then the federal home loan bank shall repurchase any capital stock that is in excess of the amount of federal home loan bank stock that the insurer member is required to hold as a minimum investment, to the extent the federal home loan bank in good faith determines the repurchase to be permissible under applicable laws, regulations, regulatory obligations, and the federal home loan bank's capital plan, and consistent with the federal home loan bank's current capital stock practices applicable to its entire membership.
(4) Following the appointment of a receiver for an insurer member, the federal home loan bank, within ten (10) business days after a request made by the receiver, shall provide a process and establish timelines for the:
(a) Release of collateral that exceeds the lendable collateral value, as determined pursuant to the advance agreement with the federal home loan bank, required to support secured obligations remaining after any repayment of advances;
(b) Release of any of the insurer member's collateral remaining in the federal home loan bank's possession following repayment in full of all outstanding secured obligations of the insurer member;
(c) Payment of fees owed by the insurer member and the operation of deposits and other accounts of the insurer member with the federal home loan bank; and
(d) Possible redemption or repurchase of federal home loan bank stock or excess stock of any class that an insurer member is required to own.
(5) Upon request from the receiver for an insurer member, the federal home loan bank shall provide any available options that an insurer member may exercise to renew or restructure an advance to defer associated prepayment fees, subject to the following:
(a) Market conditions;
(b) The terms of the advances outstanding to the insurer member;
(c) The applicable policies of the federal home loan bank; and
(d) Compliance with the Federal Home Loan Bank Act (12 USC Section 1421, et seq.) and corresponding regulations.
(6) After the tenth day following the commencement of a delinquency proceeding in this state involving an insurer member of the federal home loan bank, the federal home loan bank must not be stayed or prohibited from exercising its rights regarding collateral pledged by that insurer member.
SECTION 2. Section 83-24-7, Mississippi Code of 1972, is amended as follows:
83-24-7. For the purposes of this chapter:
(a) "Ancillary state" means any state other than a domiciliary state.
(b) "Commissioner" means the Commissioner of Insurance.
(c) "Creditor" is a person having any claim, whether matured or unmatured, liquidated or unliquidated, secured or unsecured, absolute, fixed or contingent.
(d) "Delinquency proceeding" means any proceeding instituted against an insurer for the purpose of liquidating, rehabilitating, reorganizing or conserving such insurer, and any summary proceeding under Section 83-24-19. "Formal delinquency proceeding" means any liquidation or rehabilitation proceeding.
(e) "Doing business" includes any of the following acts, whether effected by mail or otherwise:
(i) The issuance or delivery of contracts of insurance to persons residing in this state;
(ii) The solicitation of applications for such contracts, or other negotiations preliminary to the execution of such contracts;
(iii) The collection of premiums, membership fees, assessments or other consideration for such contracts;
(iv) The transaction of matters subsequent to execution of such contracts and arising out of them; or
(v) Operating under a license or certificate of authority, as an insurer, issued by the Department of Insurance.
(f) "Domiciliary state" means the state in which an insurer is incorporated or organized; or, in the case of an alien insurer, its state of entry.
(g) "Fair consideration" is given for property or obligation:
(i) When in exchange for such property or obligation, as a fair equivalent therefor, and in good faith, property is conveyed or services are rendered or an obligation is incurred or an antecedent debt is satisfied; or
(ii) When such property or obligation is received in good faith to secure a present advance or antecedent debt in amount not disproportionately small as compared to the value of the property or obligation obtained.
(h) "Federal home loan bank" means an institution chartered under the Federal Home Loan Bank Act, or its successor statute.
( * * *i) "Foreign country" means
any other jurisdiction not in any state.
( * * *j) "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 classes of persons. As to specifically encumbered
property, "general assets" 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 on deposit for the security or benefit of all
policyholders or all policyholders and creditors, in more than a single state,
shall be treated as general assets.
( * * *k) "Guaranty association"
means the Mississippi Insurance Guaranty Association Law, as amended, the
Mississippi Life and Health Insurance Guaranty Association Act, as amended, and
any other similar entity now or hereafter created by the Legislature of this
state for the payment of claims of insolvent insurers. "Foreign guaranty
association" means any similar entities now in existence in or hereafter
created by the legislature of any other state.
( * * *l) "Insolvency" or "insolvent"
means:
(i) For an insurer issuing only assessable fire insurance policies:
(A) The inability to pay any obligation within thirty (30) days after it becomes payable; or
(B) If an assessment be made within thirty (30) days after such date, the inability to pay such obligation thirty (30) days following the date specified in the first assessment notice issued after the date of loss.
(ii) For any other insurer, that the insurer is unable to pay its obligations when they are due, or when its admitted assets do not exceed its liabilities plus the greater of:
(A) Any capital and surplus required by law for its organization; or
(B) The total par or stated value of its authorized and issued capital stock.
(iii) As to any insurer licensed to do business in this state as of March 20, 1991, which does not meet the standard established under subparagraph (ii), the term "insolvency" or "insolvent" shall mean for a period not to exceed three (3) years from March 20, 1991, that it is unable to pay its obligations when they are due or that its admitted assets do not exceed its liabilities plus any required capital contribution ordered by the commissioner under provisions of the insurance law.
(iv) For purposes of this subsection, "liabilities" shall include, but not be limited to, reserves required by statute or by insurance department general regulations or specific requirements imposed by the commissioner upon a subject company.
( * * *m) "Insurer" means any
person who has done, purports to do, is doing or is licensed to do an insurance
business, and is or has been subject to the authority of, or to liquidation,
rehabilitation, reorganization, supervision, or conservation by, any insurance
commissioner. For purposes of this chapter, any other persons included under
Section 83-24-5 shall be deemed to be insurers.
( * * *n) "Preferred claim" means
any claim with respect to which the terms of this chapter accord priority of
payment from the general assets of the insurer.
( * * *o) "Receiver" means
receiver, liquidator, rehabilitator or conservator as the context requires.
( * * *p) "Reciprocal state" means
any state other than this state in which in substance and effect Sections 83-24-35,
83-24-103, 83-24-105, 83-24-109, 83-24-111 and 83-24-113 are in force, and in
which provisions are in force requiring that the commissioner or equivalent
official be the receiver of a delinquent insurer, and in which some provision
exists for the avoidance of fraudulent conveyances and preferential transfers.
( * * *q) "Secured claim" means any
claim secured by mortgage, trust deed, pledge, deposit as security, escrow, or
otherwise; but not including special deposit claims or claims against general
assets. The term also includes claims which have become liens upon specific
assets by reason of judicial process.
( * * *r) "Special deposit claim"
means any claim secured by a deposit made pursuant to statute for the security
or benefit of a limited class or classes of persons, but not including any
claim secured by general assets.
( * * *s) "State" means any state,
district or territory of the United States and the Panama Canal Zone.
( * * *t) "Transfer" shall include
the sale and every other and different mode, direct or indirect, of disposing
of or of parting with property or with an interest therein, or with the
possession thereof or of fixing a lien upon property or upon an interest
therein, absolutely or conditionally, voluntarily, by or without judicial proceedings.
The retention of a security title to property delivered to a debtor shall be
deemed a transfer suffered by the debtor.
SECTION 3. Section 83-24-11, Mississippi Code of 1972, is amended as follows:
83-24-11. (1) Any receiver appointed in a proceeding under this chapter may at any time apply for, and any court of general jurisdiction may grant, such restraining orders, preliminary and permanent injunctions, and other orders as may be deemed necessary and proper to prevent:
(a) The transaction of further business;
(b) The transfer of property;
(c) Interference with the receiver or with a proceeding under this chapter;
(d) Waste of the insurer's assets;
(e) Dissipation and transfer of bank accounts;
(f) The institution or further prosecution of any actions or proceedings;
(g) The obtaining of preferences, judgments, attachments, garnishments or liens against the insurer, its assets or its policyholders;
(h) The levying of execution against the insurer, its assets or its policyholders;
(i) The making of any sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the insurer;
(j) The withholding from the receiver of books, accounts, documents, or other records relating to the business of the insurer; or
(k) Any other threatened or contemplated action that might lessen the value of the insurer's assets or prejudice the rights of policyholders, creditors or shareholders, or the administration of any proceeding under this chapter.
(2) The receiver may apply to any court outside of the state for the relief described in subsection (1).
(3) Notwithstanding subsections (1) and (2) of this section, and any other provision of this title, a federal home loan bank shall not be stayed, enjoined, or prohibited from exercising or enforcing any right or cause of action regarding collateral pledged under a security agreement or under any pledge agreement, collateral agreement, or other similar arrangement or credit enhancement relating to a security agreement to which the federal home loan bank is a party.
SECTION 4. Section 83-24-29, Mississippi Code of 1972, is amended as follows:
83-24-29. (1) Any court in this state before which any action or proceeding is pending in which the insurer is a party or is obligated to defend a party when a rehabilitation order against the insurer is entered, shall stay the action or proceeding for ninety (90) days and such additional time as is necessary for the rehabilitator to obtain proper representation and prepare for further proceedings. The rehabilitator shall take such action respecting the pending litigation as he deems necessary in the interests of justice and for the protection of creditors, policyholders and the public. The rehabilitator shall immediately consider all litigation pending outside this state and shall petition the courts having jurisdiction over that litigation for stays whenever necessary to protect the estate of the insurer.
(2) No statute of limitations or defense of laches shall run with respect to any action by or against an insurer between the filing of a petition for appointment of a rehabilitator for that insurer and the order granting or denying that petition. Any action against the insurer that might have been commenced when the petition was filed may be commenced for at least sixty (60) days after the order of rehabilitation is entered or the petition is denied. The rehabilitator may, upon an order for rehabilitation, within one (1) year or such other longer time as applicable law may permit, institute an action or proceeding on behalf of the insurer upon any cause of action against which the period of limitation fixed by applicable law has not expired at the time of the filing of the petition upon which such order is entered.
(3) Any guaranty association or foreign guaranty association covering life or health insurance or annuities shall have standing to appear in any court proceeding concerning the rehabilitation of a life or health insurer if such association is or may become liable to act as a result of the rehabilitation.
(4) Notwithstanding subsections (1) and (2) of this section, and any other provision of this title, a federal home loan bank shall not be stayed, enjoined, or prohibited from exercising or enforcing any right or cause of action regarding collateral pledged under a security agreement or under any pledge agreement, collateral agreement, or other similar arrangement or credit enhancement relating to a security agreement to which the federal home loan bank is a party.
SECTION 5. Section 83-24-41, Mississippi Code of 1972, is amended as follows:
83-24-41. (1) The liquidator shall have the power:
(a) To appoint a special deputy or deputies to act for him under this chapter, and to determine his reasonable compensation. 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 and agents, legal counsel, actuaries, accountants, appraisers, consultants and such other personnel as he may deem necessary to assist in the liquidation.
(c) To appoint, with 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 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 the court in liquidation proceedings conducted under this chapter.
(d) To fix the reasonable compensation of employees and agents, legal counsel, actuaries, accountants, appraisers and consultants with 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 insurance department. Any amounts so advanced for expenses of administration shall be repaid to the commissioner for the use of the insurance department out of the first available monies of the insurer.
(f) To hold hearings, to subpoena witnesses to compel their attendance, to administer oaths, to examine any person under oath, and to compel any person to subscribe to his 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 he 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 monies 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 and 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 he deems best; and
(iii) To pursue any creditor's remedies available to enforce his 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 83-24-83.
(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. He 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 that transaction for the purpose of facilitating the liquidation. Any such funds borrowed may be repaid as an administrative expense and have priority over any other claims in Class 1 under the priority of distribution.
(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 no liquidator shall have the power to disavow, reject or repudiate any pledge agreement, security agreement, collateral agreement, or other similar arrangement or credit enhancement relating to a security agreement to which the federal home loan bank is a party.
(n) To continue to prosecute and to institute in the name of the insurer or in his own name any and all suits and other legal proceedings in this state or elsewhere, and to abandon the prosecution of claims he deems unprofitable to pursue further. If the insurer is dissolved under Section 83-24-39, he shall have the power to apply to any court in this state or elsewhere for leave to substitute himself for the insurer as plaintiff.
(o) To prosecute any action which may exist in 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 or all 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 for meeting 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 chancery clerk or record office in this state or elsewhere where property of the insurer is located.
(t) To assert all defenses available to the insurer as against third persons, including 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 given by the general law and that is not included with Sections 83-24-51 through 83-24-55.
(v) To intervene in any proceeding wherever instituted that might lead to the appointment of a receiver or trustee, and to act as the receiver or trustee whenever the appointment is offered.
(w) To enter into agreements with any receiver or commissioner of any other state relating to the rehabilitation, liquidation, conservation or dissolution of an insurer doing business in both states.
(x) To exercise all powers now held or hereafter conferred upon receivers by the laws of this state not inconsistent with the provisions of this chapter.
(2) (a) If a company placed in liquidation issued liability policies on a claims-made basis, which 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 as stated herein. 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 (18) months from 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 (60) 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 (90) 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 him, nor shall it exclude in any manner his right to do such other acts not herein specifically enumerated or otherwise provided for, 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) above, the liquidator shall have no obligation to defend claims or to continue to defend claims subsequent to the entry of a liquidation order.
SECTION 6. Section 83-24-51, Mississippi Code of 1972, is amended as follows:
83-24-51. (1) Every transfer made or suffered and every obligation incurred by an insurer within one (1) year prior to the filing of a successful petition for rehabilitation or liquidation under this chapter is fraudulent as to then existing and future creditors if made or incurred without fair consideration, or with actual intent to hinder, delay or defraud either existing or future creditors. A transfer made or an obligation incurred by an insurer ordered to be rehabilitated or liquidated under this chapter, which is fraudulent under this section, may be voided by the receiver, except as to a person who in good faith is a purchaser, lienor or obligee for a present fair equivalent value, and except that any purchaser, lienor or obligee, who in good faith has given a consideration less than fair for such transfer, lien or obligation, may retain the property, lien or obligation as security for repayment. The court may, on due notice, order any such transfer or obligation to be preserved for the benefit of the estate, and in that event the receiver shall succeed to and may enforce the rights of the purchaser, lienor or obligee.
(2) (a) A transfer of property other than real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee under Section 83-24-55.
(b) A transfer of real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee.
(c) A transfer which creates an equitable lien shall not be deemed to be perfected if there are available means by which a legal lien could be created.
(d) Any transfer not perfected prior to the filing of a petition for liquidation shall be deemed to be made immediately before the filing of the successful petition.
(e) The provisions of this subsection apply whether or not there are or were creditors who might have obtained any liens or persons who might have become bona fide purchasers.
(3) Any transaction of the insurer with a reinsurer shall be deemed fraudulent and may be voided by the receiver under subsection (1) if:
(a) The transaction consists of the termination, adjustment or settlement of a reinsurance contract in which the reinsurer is released from any part of its duty to pay the originally specified share of losses that had occurred prior to the time of the transactions, unless the reinsurer gives a present fair equivalent value for the release; and
(b) Any part of the transaction took place within one (1) year prior to the date of filing of the petition through which the receivership was commenced.
(4) Every person receiving any property from the insurer or any benefit thereof which is a fraudulent transfer under subsection (1) shall be personally liable therefor and shall be bound to account to the liquidator.
(5) Notwithstanding this section and any other provision of this title, a receiver shall not avoid any transfer of, or any obligation to transfer, money or any other property arising under or in connection with 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. However, a transfer may be avoided under this section if it was made with the actual intent to hinder, delay, or defraud either existing or future creditors.
SECTION 7. Section 83-24-55, Mississippi Code of 1972, is amended as follows:
83-24-55. (1) (a) A preference is a transfer of any of the property of an insurer to or for the benefit of a creditor, for or on account of an antecedent debt, made or suffered by the insurer within one (1) year before the filing of a successful petition for liquidation under this chapter, the effect of which transfer may be to enable the creditor to obtain a greater percentage of this debt than another creditor of the same class would receive. If a liquidation order is entered while the insurer is already subject to a rehabilitation order, then such transfers shall be deemed preferences if made or suffered within one (1) year before the filing of the successful petition for rehabilitation, or within two (2) years before the filing of the successful petition for liquidation, whichever time is shorter.
(b) Any preference may be voided by the liquidator if:
(i) The insurer was insolvent at the time of the transfer; or
(ii) The transfer was made within four (4) months before the filing of the petition; or
(iii) The creditor receiving it or to be benefited thereby or his agent acting with reference thereto had, at the time when the transfer was made, reasonable cause to believe that the insurer was insolvent or was about to become insolvent; or
(iv) The creditor receiving it was an officer, or any employee or attorney or other person who was in fact in a position of comparable influence in the insurer to an officer whether or not he held such position, or any shareholder holding, directly or indirectly, more than five percent (5%) of any class of any equity security issued by the insurer, or any other person, firm, corporation, association, or aggregation of persons with whom the insurer did not deal at arm's length.
(c) When the preference is voidable, the liquidator may recover the property or, if it has been converted, its value from any person who has received or converted the property; except where a bona fide purchaser or lienor has given less than fair equivalent value, he shall have a lien upon the property to the extent of the consideration actually given by him. If a preference by way of lien or security title is voidable, the court may on due notice order the lien or title to be preserved for the benefit of the estate and the lien or title shall pass to the liquidator.
(2) (a) A transfer of property other than real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee.
(b) A transfer of real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee.
(c) A transfer which creates an equitable lien shall not be deemed to be perfected if there are available means by which a legal lien could be created.
(d) A transfer not perfected prior to the filing of a petition for liquidation shall be deemed to be made immediately before the filing of the successful petition.
(e) The provisions of this subsection apply whether or not there are or were creditors who might have obtained liens or persons who might have become bona fide purchasers.
(3) (a) A lien obtainable by legal or equitable proceedings upon a simple contract is one arising in the ordinary course of such proceedings upon the entry or docketing of a judgment or decree, or upon attachment, garnishment, execution, or like process, whether before, upon, or after judgment or decree and whether before or upon levy. It does not include liens which under applicable law are given a special priority over other liens which are prior in time.
(b) A lien obtainable by legal or equitable proceedings could become superior to the rights of a transferee, or a purchaser could obtain rights superior to the rights of a transferee within the meaning of subsection (2), if such consequences would follow only from the lien or purchase itself, or from the lien or purchase followed by any step wholly within the control of the respective lienholder or purchaser, with or without the aid of ministerial action by public officials. Such a lien could not, however, become superior and such a purchase could not create superior rights for the purpose of subsection (2) through any acts subsequent to the obtaining of such a lien or subsequent to such a purchase which require the agreement or concurrence of any third party or which require any further judicial action or ruling.
(4) A transfer of property for or on account of a new and contemporaneous consideration which is deemed under subsection (2) to be made or suffered after the transfer because of delay in perfecting it does not thereby become a transfer for or on account of an antecedent debt if any acts required by the applicable law to be performed in order to perfect the transfer as against liens or bona fide purchasers' rights are performed within twenty-one (21) days or any period expressly allowed by the law, whichever is less. A transfer to secure a future loan, if such a loan is actually made, or a transfer which becomes security for a future loan, shall have the same effect as a transfer for or on account of a new and contemporaneous consideration.
(5) If any lien deemed voidable under subsection (1)(b) has been dissolved by the furnishing of a bond or other obligation, the surety on which has been indemnified directly or indirectly by the transfer of or the creation of a lien upon any property of an insurer before the filing of a petition under this chapter which results in a liquidation order, the indemnifying transfer or lien shall also be deemed voidable.
(6) The property affected by any lien deemed voidable under subsections (1) and (5) shall be discharged from such lien, and that property and any of the indemnifying property transferred to or for the benefit of a surety shall pass to the liquidator, except that the court may on due notice order any such lien to be preserved for the benefit of the estate and the court may direct that such conveyance be executed as may be proper or adequate to evidence the title of the liquidator.
(7) The court shall have summary jurisdiction of any proceeding by the liquidator to hear and determine the rights of any parties under this section. Reasonable notice of any hearing in the proceeding shall be given to all parties in interest, including the obligee of a releasing bond or other like obligation. When an order is entered for the recovery of indemnifying property in kind or for the avoidance of an indemnifying lien, the court, upon application of any party in interest, shall in the same proceeding ascertain the value of the property or lien, and if the value is less than the amount for which the property is indemnity or than the amount of the lien, the transferee or lienholder may elect to retain the property or lien upon payment of its value, as ascertained by the court, to the liquidator, within such reasonable times as the court shall fix.
(8) The liability of the surety under a releasing bond or other like obligation shall be discharged to the extent of the value of the indemnifying property recovered or the indemnifying lien nullified and voided by the liquidator, or where the property is retained under subsection (7) to the extent of the amount paid to the liquidator.
(9) If a creditor has been preferred, and afterward in good faith gives the insurer further credit without security of any kind, for property which becomes a part of the insurer's estate, the amount of the new credit remaining unpaid at the time of the petition may be set off against the preference which would otherwise be recoverable from him.
(10) If an insurer shall, directly or indirectly, within four (4) months before the filing of a successful petition for liquidation under this chapter, or at any time in contemplation of a proceeding to liquidate it, pay money or transfer property to an attorney-at-law for services rendered or to be rendered, the transactions may be examined by the court on its own motion or shall be examined by the court on petition of the liquidator and shall be held valid only to the extent of a reasonable amount to be determined by the court, and the excess may be recovered by the liquidator for the benefits of the estate. If the attorney is in a position of influence with the insurer or an affiliate thereof, payment of any money or the transfer of any property to the attorney-at-law for services rendered or to be rendered shall be governed by the provision of subsection (1)(b)(iv).
(11) (a) Every officer, manager, employee, shareholder, member, subscriber, attorney or any other person acting on behalf of the insurer who knowingly participates in giving any preference when he has reasonable cause to believe the insurer is or is about to become insolvent at the time of the preference shall be personally liable to the liquidator for the amount of the preference. It is permissible to infer that there is a reasonable cause to so believe if the transfer was made within four (4) months before the date of filing of this successful petition for liquidation.
(b) Every person receiving any property from the insurer or the benefit thereof as a preference voidable under subsection (1) shall be personally liable therefor and shall be bound to account to the liquidator.
(c) Nothing in this subsection shall prejudice any other claim by the liquidator against any person.
(12) Notwithstanding subsection (1)(b) of this section and any other provision of this title, a liquidator or rehabilitator shall not avoid any preference arising under or in connection with 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.
SECTION 8. This act shall take effect and be in force from and after July 1, 2023.