40-3629. Transfers of property and obligations incurred within one year prior to filing of petition for rehabilitation or liquidation; fraudulent transfers and obligations incurred; fraudulent transactions of insurers with reinsurers; liability of person receiving property fraudulently transferred; limitation. (a) Except as provided in subsection (e), every transfer made or suffered and every obligation incurred by an insurer within one year prior to the filing of a successful petition for rehabilitation or liquidation under this act 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 act, which is fraudulent under this section, may be avoided 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, on due notice, may 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.
(b) (1) 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.
(2) 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.
(3) 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.
(4) 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.
(5) 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.
(c) Any transaction of the insurer with a reinsurer shall be deemed fraudulent and may be avoided by the receiver under subsection (a) if:
(1) 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
(2) any part of the transaction took place within one year prior to the date of filing of the petition through which the receivership was commenced.
(d) Every person receiving any property from the insurer or any benefit thereof which is a fraudulent transfer under subsection (a) shall be personally liable therefor and shall be bound to account to the liquidator.
(e) (1) Except as provided in paragraph (2), no receiver shall be entitled to avoid any transfer of, or any obligation to transfer, money or any other property arising under or in connection with:
(A) Any federal home loan bank security agreement; or
(B) any pledge, security, collateral or guarantee agreement or any other similar arrangement or credit enhancement relating to such federal home loan bank security agreement.
(2) A transfer may be avoided under this section if such transfer was made with actual intent to hinder, delay or defraud either existing or future creditors.
History: L. 1991, ch. 125, § 25; L. 2014, ch. 3, § 4; July 1.
Structure Kansas Statutes
Article 36 - Impaired Or Insolvent Insurers
40-3609 Same; relief granted by court upon application of receiver; limitation.
40-3611 Same; proceeding commenced prior to effective date of act.
40-3612 Same; restrictions upon insurers subject to delinquency proceedings.
40-3616 Rehabilitation of insurer; application by commissioner for order of court; grounds.
40-3621 Liquidation of insurer; petition by commissioner; grounds.
40-3623 Same; continuation of insurance policies in effect at time of order of liquidation.
40-3625 Same; authority and responsibility of liquidator; limitation.
40-3632 Claims of creditors; allowance; avoidance; filing.
40-3634 Payment of reinsurance upon insolvency of ceding insurer.
40-3635 Insurer determined insolvent; proposal to disburse assets; application by liquidator.
40-3636 Claims; proof of claims, form and filing; late filings.
40-3638 Same; claims which may be allowed; limitations.
40-3640 Same; value of security held by secured creditor.
40-3641 Claims; priority of distribution; classes established.
40-3643 Unclaimed fund; deposit in accordance with unclaimed property act.
40-3644 Discharge of liquidator; orders of court.
40-3645 Liquidation proceedings; reopening after termination; order of court.
40-3646 Same; disposition of records; direction by court.
40-3647 Receiverships; audits; filing and payment of costs.
40-3651 Same; appointment of ancillary receiver; order of court; authority of ancillary receiver.
40-3652 Same; supervision or seizure proceedings, authority of commissioner.
40-3659 Qualified financial contracts; procedures; duties of receiver.