(a) Subject to § 26-1401.15 as it relates to the functional regulatory authority of the Commissioner for the liquidation or rehabilitation of an insurance subsidiary or holding company affiliate, the Commissioner may take possession of the business and property of a merchant bank if the Commissioner has determined that one or more of the events described in subsection (b) of this section has occurred.
(b) The Commissioner may take possession of the properties or business of a merchant bank under subsection (a) of this section if the merchant bank:
(1) Has violated a law, rule, regulation, a condition imposed by the Commissioner in connection with the approval of an application, an order or authorized request by the Commissioner, or a term or condition of a written agreement entered into with the Commissioner, and such violation affects the safe and sound condition and operation of the bank or the severity of the violation calls into question the competency of management or the quality of the operation of the bank;
(2) Is conducting its business in an unauthorized or unsafe or unsound manner;
(3) Is in an unsafe and unsound condition to transact its business;
(4) Has an impairment of its capital;
(5) Has suspended payment of its obligations;
(6) Has neglected or refused to comply with the terms of a duly issued order of the Commissioner;
(7) Has refused, upon proper demand, to submit its records and affairs for inspection to an examiner of the Department;
(8) Has refused to be examined upon oath regarding its affairs; or
(9) Has neglected, refused or failed to take or continue proceedings for voluntary liquidation in accordance with any of the provisions of this chapter.
(c) If the Commissioner takes possession of the property or business of a merchant bank under this section, the Commissioner shall inform the merchant bank of the merchant bank’s right to seek review of the Commissioner’s action under subsection (e) of this section.
(d) The Commissioner may maintain possession of the property or business of a merchant bank until:
(1) The affairs of the merchant bank are finally liquidated;
(2) The merchant bank voluntarily winds up its affairs; or
(3) The Commissioner authorizes the merchant bank to resume business under § 26-833.13.
(e) Within 10 days after the Commissioner takes possession of the property or business of a merchant bank under this section, the merchant bank may apply to the Superior Court for an order requiring the Commissioner to show cause why the Commissioner should not be enjoined from continuing his or her possession of the property or business. The Superior Court may, upon good cause shown, direct the Commissioner to surrender possession or some or all of the business or property of the merchant bank or direct the Commissioner to take, or refrain from taking, any action.
(f) In addition to the authority granted under this section, the Commissioner may request the appointment of a receiver or conservator for the merchant bank under this chapter.
Effect of Amendments
D.C. Law 15-166, in subsec. (a), deleted “of the Department of Insurance and Securities Regulation” following “authority of the Commissioner”.
For temporary (90 day) amendment of section, see § 2(j) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).