Conduct of delinquency proceeding; domestic and alien insurers.

(1) Whenever under this chapter a receiver is to be appointed in a delinquency proceeding for a domestic or alien insurer, the court shall appoint the department as such receiver. The court shall order the department forthwith to take possession of the assets of the insurer and to administer the same under the orders of the court.

(2) As a domiciliary receiver, the department is vested by operation of law with the title to all of the property, contracts, and rights of action, and all of the books and records, of the insurer, wherever located, as of the date of entry of the order directing it to rehabilitate or liquidate a domestic insurer or to liquidate the United States branch of an alien insurer domiciled in this state; and it shall have the right to recover the same and reduce the same to possession; except that ancillary receivers in reciprocal states shall have, as to assets located in their respective states, the rights and powers which are herein prescribed for ancillary receivers appointed in this state as to assets located in this state.

(3) The receiver may assume or reject any executory contract or unexpired lease of the insurer.

(4) The filing or recording of the order directing possession to be taken, or a certified copy thereof, in any office where instruments affecting title to property are required to be filed or recorded imparts the same notice as would be imparted by a deed, bill of sale, or other evidence of title duly filed or recorded.

(5) The department as domiciliary receiver is responsible for the proper administration of all assets coming into its possession or control. The court may at any time require a bond from it or its agents if deemed desirable for the protection of such assets.

(6) Upon taking possession of the assets of an insurer, the domiciliary receiver shall, subject to the direction of the court, immediately proceed to conduct the business of the insurer or to take such steps as are authorized by this chapter for the purpose of rehabilitating, liquidating, or conserving the affairs or assets of the insurer.

(7) In order to preserve as much as possible the right and interest of the policyholders whose insurance policies or similar contracts are affected by the receivership proceedings, the department as a domiciliary receiver may:

(a) Use the property of the estate of the insurer to transfer the insurer’s book of business, policies, or similar contracts of coverage, in whole or in part, to a solvent assuming insurer or insurers.

(b) Notwithstanding s. 631.195, share records of the insurer with the prospective solvent assuming insurer or insurers, but only to the extent necessary to undertake due diligence for a transfer contemplated under this section.

(8) The department as domiciliary receiver may pay any expenses under contracts, leases, employment agreements, or other arrangements entered into by the insurer before receivership as the department deems necessary for the purposes of this chapter. The department is not required to pay any such expenses that it determines are not necessary and may reject any contract pursuant to subsection (3).

(9) The department may assert all rights belonging to third parties, including, but not limited to, policyholders, creditors, and other claimants, except to the extent an individual claim is personal and unique to the claimant and could not inure to the benefit of the estate or to policyholders, creditors, or other claimants.

(10)(a) In connection with a delinquency proceeding, the department may appoint one or more special agents to act for it, and it may employ such counsel, clerks, and assistants as it deems necessary. The compensation of the special agents, counsel, clerks, or assistants and all expenses of taking possession of the insurer and of conducting the proceeding shall be fixed by the receiver, subject to the approval of the court, and shall be paid out of the funds or assets of the insurer. Such expenses are administrative expenses and are recoverable by the receiver in any actions in which the receiver is authorized or entitled to recover its administrative expenses. Within the limits of duties imposed upon them, special agents shall possess all the powers given to and, in the exercise of those powers, shall be subject to all duties imposed upon the receiver with respect to such proceeding.

(b) In the event that initiation of delinquency proceedings does not result in appointment of the department as receiver, or in the event that the funds or assets of an insurer for which the department is appointed as receiver are insufficient to cover the cost of compensation to special agents, counsel, clerks, or assistants and all expenses of taking, or attempting to take, possession of the insurer, and of conducting the proceeding, there is appropriated, upon approval of the Chief Financial Officer and of the Legislative Budget Commission pursuant to chapter 216, from the Insurance Regulation Trust Fund to the Division of Rehabilitation and Liquidation a sum that is sufficient to cover the unreimbursed costs.

(11) The department as domiciliary receiver may take such action as it deems necessary or appropriate to reform and revitalize the insurer. The department shall have all the powers of the directors, officers, and managers, whose authority shall be suspended, except as they are redelegated by the receiver. The receiver shall have full power to direct and manage the affairs of the insurer, to hire and discharge employees, and to deal with the property and business of the insurer. In the event of the liquidation of an insurer domiciled in this state, and notwithstanding any provision of chapter 605, chapter 607, chapter 617, chapter 620, or chapter 621, all officers, directors, and managers of the insurer are permanently discharged and have no further authority of any kind over the affairs or assets of the insurer, except as may be redelegated by the department.

(12) If the department as domiciliary receiver determines that reorganization, consolidation, conversion, reinsurance, merger, or other transformation of the insurer is appropriate, it shall prepare a plan to effect such changes. Upon application of the receiver for approval of the plan, and after such notice and hearings as the court may prescribe, the court may either approve or disapprove the plan proposed or may modify it and approve it as modified. Any plan approved under this section must be, in the judgment of the court, fair and equitable to all parties concerned. If the plan is approved, the receiver shall carry out the plan.

(13) Records created by the entity in receivership shall be disposed of in accordance with the order of the court at such time as the receiver determines that the records are not needed for the administration of the estate.