Subdivision 1. Definition and effect. 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 sections 60B.01 to 60B.61 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 sections 60B.01 to 60B.61, 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 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.
Subd. 2. Perfection of transfers. (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 60B.32, subdivision 3.
(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) This subdivision applies whether or not there are or were creditors who might have obtained any liens or persons who might have become bona fide purchasers.
Subd. 3. Fraudulent reinsurance transactions. Any transaction of the insurer with a reinsurer shall be deemed fraudulent and may be avoided by the receiver under subdivision 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 transaction, unless the reinsurer gives a present fair equivalent value for the release; and
(b) 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.
Subd. 4. Fraudulent transfers to affiliates. Any distribution, other than stock dividends paid by the insurer on its capital stock, made by the insurer to an affiliate owning more than 50 percent of the voting stock of the insurer during the five years preceding the filing of a successful petition for rehabilitation or liquidation under sections 60B.01 to 60B.61 shall be deemed fraudulent and may be avoided by the receiver; except that:
(a) no distribution shall be recoverable if the insurer shows that when paid, it was lawful, reasonable, and that the insurer did not know, and could not reasonably have known, that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations;
(b) any person who was an affiliate owning more than 50 percent of the voting stock of the insurer at the time the distributions were paid shall be liable only up to the amount of distributions received. Any person who was an affiliate that controlled the insurer at the time the distributions were declared shall be liable up to the amount of distributions that person would have received if they had been paid immediately. If two persons are liable with respect to the same distribution, they shall be jointly and severally liable;
(c) the maximum amount recoverable under this subdivision shall be the amount needed in addition to all other available assets of the insurer to pay its contractual obligations;
(d) if any person liable under clause (b) is insolvent, all its affiliates that controlled it at the time the distribution was paid shall be jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent affiliate.
1969 c 708 s 30; 1977 c 273 s 19; 1986 c 444
Structure Minnesota Statutes
Chapters 59A - 79A — Insurance
Chapter 60B — Rehabilitation And Liquidation
Section 60B.01 — Title, Construction, And Purpose.
Section 60B.02 — Persons Covered.
Section 60B.04 — Jurisdiction And Venue.
Section 60B.05 — Injunctions And Orders.
Section 60B.06 — Costs And Expenses Of Litigation.
Section 60B.07 — Cooperation Of Officers And Employees.
Section 60B.09 — Commissioner's Reports.
Section 60B.10 — Continuation Of Delinquency Proceedings.
Section 60B.11 — Commissioner's Summary Orders.
Section 60B.12 — Court's Seizure Order.
Section 60B.13 — Commissioner's Seizure Order.
Section 60B.14 — Conduct Of Hearings In Summary Proceedings.
Section 60B.15 — Grounds For Rehabilitation.
Section 60B.16 — Rehabilitation Orders.
Section 60B.17 — Powers And Duties Of Rehabilitator.
Section 60B.171 — Use, Sale, Or Transfer Of Assets During Rehabilitation.
Section 60B.18 — Actions By And Against Rehabilitator.
Section 60B.181 — Notice Regarding Rehabilitation Or Liquidation Proceeding.
Section 60B.19 — Termination Of Rehabilitation.
Section 60B.193 — Liability Of Enrollees.
Section 60B.20 — Grounds For Liquidation.
Section 60B.21 — Liquidation Orders.
Section 60B.22 — Continuance Of Coverage.
Section 60B.23 — Dissolution Of Insurer.
Section 60B.25 — Powers Of Liquidator.
Section 60B.26 — Notice To Creditors And Others.
Section 60B.28 — Actions By And Against Liquidator.
Section 60B.29 — Collection And List Of Assets.
Section 60B.30 — Fraudulent Transfers Prior To Petition.
Section 60B.31 — Fraudulent Transfers After Petition.
Section 60B.32 — Voidable Preferences And Liens.
Section 60B.33 — Claims Of Holders Of Void Or Voidable Rights.
Section 60B.335 — Federal Home Loan Bank Rights; Collateral Pledged By Insurer-members.
Section 60B.34 — Setoffs And Counterclaims.
Section 60B.365 — Reinsurer's Liability.
Section 60B.37 — Filing Of Claims.
Section 60B.38 — Proof Of Claim.
Section 60B.39 — Special Claims.
Section 60B.40 — Special Provisions For Third-party Claims.
Section 60B.41 — Disputed Claims.
Section 60B.42 — Claims Of Surety.
Section 60B.43 — Secured Creditors' Claims.
Section 60B.435 — Qualified Financial Contracts.
Section 60B.44 — Order Of Distribution.
Section 60B.45 — Liquidator's Recommendations To The Court.
Section 60B.46 — Distribution Of Assets.
Section 60B.47 — Unclaimed And Withheld Funds.
Section 60B.48 — Termination Of Proceedings.
Section 60B.49 — Reopening Liquidation.
Section 60B.50 — Disposition Of Records During And After Termination Of Liquidation.
Section 60B.51 — External Audit Of Receiver's Books.
Section 60B.52 — Conservation Of Property Of Foreign Or Alien Insurers Found In This State.
Section 60B.53 — Liquidation Of Property Of Foreign Or Alien Insurers Found In This State.
Section 60B.54 — Foreign Domiciliary Receivers In Other States.
Section 60B.55 — Ancillary Formal Proceedings.
Section 60B.56 — Ancillary Summary Proceedings.
Section 60B.57 — Claims Of Nonresidents Against Insurers Domiciled In This State.
Section 60B.58 — Claims Of Residents Against Insurers Domiciled In Reciprocal States.
Section 60B.59 — Attachment, Garnishment And Levy Of Execution.
Section 60B.60 — Interstate Priorities.
Section 60B.61 — Subordination Of Claims For Noncooperation.