Code of the District of Columbia

§ 31–1319. Powers of liquidator.

(a) The liquidator shall have the power:

(1) To appoint a special deputy or deputies to act for him or her under this chapter, and to determine his or her 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;

(2) To hire employees, agents, legal counsel, actuaries, accountants, appraisers, consultants, and other personnel he or she deems necessary to assist in the liquidation;

(3) 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. The 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 the court in liquidation proceedings conducted under this chapter;

(4) To fix the reasonable compensation of employees and agents, legal counsel, actuaries, accountants, appraisers, and consultants with the approval of the court;

(5) 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 incurred out of any appropriation for the maintenance of the Department of Insurance, Securities, and Banking. Any amounts advanced for expenses of administration shall be repaid to the Commissioner for the use of the Department of Insurance, Securities, and Banking out of the first available monies of the insurer;

(6) To hold hearings, subpoena witnesses to compel their attendance, administer oaths, examine any person under oath, and compel any person to subscribe to his or her 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;

(7) To audit the books and records of all agents of the insurer insofar as those records relate to the business activities of the insurer;

(8) To collect all debts and moneys due and claims belonging to the insurer, wherever located, and for this purpose:

(A) To institute timely action in other jurisdictions, in order to forestall garnishment and attachment proceedings against the debts;

(B) To do any other acts necessary or expedient to collect, conserve, or protect assets or property of the insurer, including the power to sell, compound, compromise, or assign debts for purposes of collection upon terms and conditions as he or she deems best; and

(C) To pursue any creditor’s remedies available to enforce his or her claims;

(9) To conduct public and private sales of the property of the insurer;

(10) 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 § 31-1340;

(11) 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 terms and conditions that are fair and reasonable. The liquidator shall also have power to execute, acknowledge, and deliver all deeds, assignments, releases, and other instruments necessary or proper to effectuate any sale of property or other transaction in connection with the liquidation;

(12) 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 funds borrowed may be repaid as an administrative expense and have priority over any other claims in Class 1 under the priority of distribution;

(13) To enter into any contracts necessary to carry out the order to liquidate, and to affirm or disavow any contracts to which the insurer is a party;

(14) To continue to prosecute and to institute in the name of the insurer, or in his or her own name, any and all suits and other legal proceedings, in the District or elsewhere, and to abandon the prosecution of claims he or she deems unprofitable to pursue further. If the insurer is dissolved under § 31-1318, the liquidator shall have the power to apply to any court in the District or elsewhere for leave to substitute himself or herself for the insurer as plaintiff;

(15) 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;

(16) To remove any or all records and property of the insurer to the offices of the Commissioner or to any other place convenient for the purposes of efficient and orderly execution of the liquidation. Guaranty associations and foreign guaranty associations shall have reasonable access to the records of the insurer necessary for them to carry out their statutory obligations;

(17) To deposit in 1 or more banks in the District the sums required for meeting current administration expenses and dividend distributions;

(18) To invest all sums not currently needed, subject to the same standards that would apply if those sums were invested by the insurer, unless the court orders otherwise;

(19) To file any necessary documents for record in the office of any recorder of deeds or record office in the District or elsewhere where property of the insurer is located;

(20) To assert all defenses available to the insurer 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 an obligation and may defend only in the absence of a defense by the guaranty associations;

(21) 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 within §§ 31-1324 through 31-1326;

(22) 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;

(23) To enter into agreements with any receiver or superintendent or commissioner of insurance of any other state relating to the rehabilitation, liquidation, conservation, or dissolution of an insurer doing business in both states; and

(24) To exercise all powers now held or hereafter conferred upon receivers by the laws of the District not inconsistent with the provisions of this chapter.

(b)(1) 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, the liquidator may make available to holders of the 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 18 months from the order of liquidation.

(2) 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 an extended period within 60 days after the order of liquidation at a charge to be determined by the liquidator subject to approval of the court. The offer shall be deemed rejected unless the offer is accepted in writing and the charge is paid within 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.

(c) The enumeration, in this section, of the powers and authority of the liquidator shall not be construed as a limitation upon him or her, nor shall it exclude in any manner his or her right to do other acts not specifically enumerated or otherwise provided for, necessary or appropriate for the accomplishment of or in aid of the purpose of liquidation.

(d) Notwithstanding the powers of the liquidator stated in subsections (a) and (b) 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.


(Oct. 15, 1993, D.C. Law 10-35, § 20, 40 DCR 5773; May 16, 1995, D.C. Law 10-255, § 27(e), 41 DCR 5193; May 21, 1997, D.C. Law 11-268, § 10(z)(2), 44 DCR 1730; Mar. 24, 1998, D.C. Law 12-81, § 37(b), 45 DCR 745; Apr. 20, 1999, D.C. Law 12-264, § 57(e), 46 DCR 2118; June 11, 2004, D.C. Law 15-166, § 4(i)(5), 51 DCR 2817.)

Prior Codifications

1981 Ed., § 35-2819.

Section References

This section is referenced in § 31-1317.

Effect of Amendments

D.C. Law 15-166, in par. (5) of subsec. (a), substituted “Department of Insurance, Securities, and Banking” for “Department of Insurance and Securities” both times it appears.

Emergency Legislation

For temporary (90 day) amendment of section, see § 4(i)(5) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).