Effective - 28 Aug 1991
375.1195. Preference, voidable when, how recovered — liens, voidable when, procedure — liability of officers for granting preferences. — 1. (1) A preference is a transfer of any of the property of an insurer to or for the benefit of a creditor, for or on account of an antecedent debt, which transfer is made or suffered by the insurer within one year before the filing of a successful petition for liquidation under sections 375.1150 to 375.1246, the effect of which transfer may be to enable the creditor to obtain a greater percentage of this debt than another creditor of the same class would receive. If a liquidation order is entered while the insurer is already subject to a rehabilitation order, then such transfers shall be deemed preferences if made or suffered within one year before the filing of the successful petition for rehabilitation, or within two years before the filing of the successful petition for liquidation, whichever time is shorter.
(2) Any preference may be avoided by the liquidator if:
(a) The insurer was insolvent at the time of the transfer; or
(b) The transfer was made within four months before the filing of the petition; or
(c) The creditor receiving it or to be benefitted thereby or his agent acting with reference thereto had, at the time when the transfer was made, reasonable cause to believe that the insurer was insolvent or was about to become insolvent; or
(d) The creditor receiving it was an officer, or any employee or attorney or other person who was in fact in a position of comparable influence in the insurer, as an officer whether or not he held such position, or any shareholder holding directly or indirectly more than five percent of any class of any equity security issued by the insurer, or any other person, firm, corporation, association, or persons with whom the insurer did not deal at arm's length.
(3) Where the preference is avoidable, the liquidator may recover the property or, if it has been converted, its value from any person who has received or converted the property; except where a bona fide purchaser or lienor has given less than fair market value, he shall have a lien upon the property to the extent of the consideration actually given by him. Where a preference by way of lien or security title is voidable, the court may on due notice order the lien or title to be preserved for the benefit of the estate, in which event the lien or title shall pass to the liquidator.
2. (1) A transfer of property other than real property shall be deemed to be made or suffered when it becomes perfected to the extent 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 perfected to the extent 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) A 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 liens or persons who might have become bona fide purchasers.
3. For purposes of this section:
(1) A lien obtainable by legal or equitable proceedings upon a simple contract is one arising in the ordinary course of such proceedings upon the entry or docketing of a judgment or decree, or upon attachment, garnishment, execution, or like process, whether before, upon, or after judgment or decree and whether before or upon levy. It does not include liens which under applicable law are given a special priority over other liens which are prior in time.
(2) A lien obtainable by legal or equitable proceedings could become superior to the rights of a transferee, or a purchaser could obtain rights superior to the rights of a transferee within the meaning of subsection 2 of this section, if such consequences would follow only from the lien or purchase itself, or from the lien or purchase followed by any step wholly within the control of the respective lienholder or purchaser, with or without the aid of ministerial action by public officials. Such a lien could not, however, become superior and such a purchase could not create superior rights for the purpose of subsection 2 of this section through any acts subsequent to the obtaining of such a lien or subsequent to such a purchase which require the agreement or concurrence of any third party or which require any further judicial action or ruling.
4. A transfer of property for or on account of a new and contemporaneous consideration which is deemed under subsection 2 of this section to be made or suffered after the transfer because of delay in perfecting does not thereby become a transfer for or on account of an antecedent debt if any acts required by the applicable law to be performed in order to perfect the transfer as against liens or bona fide purchasers' rights are performed within twenty-one days or any period expressly allowed by the law, whichever is less. A transfer to secure a future loan, if such a loan is actually made, or a transfer which becomes security for a future loan, shall have the same effect as a transfer for or on account of a new and contemporaneous consideration.
5. If any lien deemed voidable under subdivision (2) of subsection 1 of this section has been dissolved by the furnishing of a bond or other obligation, the surety on which thereby has been indemnified directly or indirectly by the transfer of or the creation of a lien upon any property of an insurer before the filing of a petition under this act* which results in a liquidation order, the indemnifying transfer or lien shall also be deemed voidable.
6. The property affected by any lien deemed voidable under subsections 1 and 5 of this section shall be discharged from such lien, and that property and any of the indemnifying property transferred to or for the benefit of a surety shall pass to the liquidator, except that the court may on due notice order any such lien to be preserved for the benefit of the estate and the court may direct that such conveyance be executed as may be proper or adequate to evidence the title of the liquidator.
7. The court shall have summary jurisdiction of any proceeding by the liquidator to hear and determine the rights of any parties under this section. Reasonable notice of any hearings in the proceeding shall be given to all parties in interest, including the obligee of a releasing bond or other like obligation. Where an order is entered for the recovery of indemnifying property in kind or for the avoidance of an indemnifying lien, the court, upon application of any party in interest, shall in the same proceeding ascertain the value of the property or lien, and if the value is less than the amount for which the property is indemnified or than the amount of the lien, the transferee or lienholder may elect to retain the property or lien upon payment of its value, as ascertained by the court, to the liquidator, within such reasonable times and upon such terms as the court shall fix.
8. The liability of the surety under a releasing bond or other like obligation shall be discharged to the extent of the value of the indemnifying property recovered or the indemnifying lien nullified and avoided by the liquidator, or where the property is retained under subsection 7 of this section to the extent of the amount paid to the liquidator.
9. If an insurer, directly or indirectly, within four months before the filing of a successful petition for liquidation under this act*, or at any time in contemplation of a proceeding to liquidate it, pays money or transfers property to an attorney-at-law for services rendered or to be rendered, the transactions may be examined by the court on its own motion or shall be examined by the court on petition of the liquidator and shall be held valid only to the extent that the amount of such money or value of such property is reasonable as relates to actual services rendered as determined by the court, and the excess may be recovered by the liquidator for the benefit of the estate, provided that where the attorney is in a position of influence in the insurer or an affiliate thereof, payment of any money or the transfer of any property to the attorney-at-law for services rendered or to be rendered shall be governed by the provision of paragraph (d) of subdivision (2) of subsection 1 of this section.
10. (1) Every officer, manager, employee, shareholder, member, subscriber, attorney or any other person acting on behalf of the insurer who knowingly participates in giving any preference when he has reasonable cause to believe the insurer is or about to become insolvent at the time of the preference shall be personally liable to the liquidator for the amount of the preference. A rebuttable presumption may be established that such a person is personally liable if the transfer was made within four months before the date of filing of this successful petition for liquidation.
(2) Every person receiving any property from the insurer or the benefit thereof as a preference voidable under subsection 1 of this section shall be personally liable therefor and shall be bound to account to the liquidator.
(3) Nothing in this subsection shall prejudice any other claim by the liquidator against any person.
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(L. 1991 H.B. 385, et al. § 77)
*"This act" (H.B. 385, et al., 1991) contained numerous sections. Consult Disposition of Sections table for a definitive listing.
Structure Missouri Revised Statutes
Title XXIV - Business and Financial Institutions
Chapter 375 - Provisions Applicable to All Insurance Companies
Section 375.001 - Definitions.
Section 375.002 - Grounds for cancellation.
Section 375.003 - Notice of cancellation, how given — reinstatement, when.
Section 375.004 - Refusal to renew, when authorized — exemption, when.
Section 375.005 - Proof of notice, how made.
Section 375.006 - Immunity from liability granted, when, to whom.
Section 375.007 - Cancellation or refusal to issue policy on certain grounds prohibited, exceptions.
Section 375.008 - Certain insurers exempt.
Section 375.012 - Definitions.
Section 375.013 - Promulgation of rules, generally, this chapter.
Section 375.015 - Application for licensure, insurance producers.
Section 375.016 - Examination required for insurance producer's license.
Section 375.017 - Nonresident producer's license.
Section 375.025 - Temporary license — to whom issued.
Section 375.030 - Continuing education, programs approved for another profession.
Section 375.031 - Definitions.
Section 375.033 - Termination of contract, notice — agent not to do business.
Section 375.035 - Renewal after termination of producer's contract.
Section 375.037 - Director's investigation — appeal.
Section 375.046 - Who deemed agent of unauthorized company.
Section 375.051 - Producer held as trustee of money collected.
Section 375.052 - Additional incidental fees — disclosure to applicant or insured.
Section 375.071 - Centralized producer license registry, participation in.
Section 375.076 - No consideration for unlicensed persons.
Section 375.106 - Insurance producers, limitations on negotiated contracts.
Section 375.141 - Suspension, revocation, refusal of license — grounds — procedure.
Section 375.143 - Rulemaking authority.
Section 375.145 - Violations, penalties.
Section 375.146 - Violation, penalty.
Section 375.151 - Acts of managing general agent acts of insurer.
Section 375.152 - Violations, penalties.
Section 375.153 - Managing general agent, director's authority to promulgate rules.
Section 375.161 - Certificate to do business — when terminated.
Section 375.166 - Expense of organization limited.
Section 375.169 - Violation of section 375.166 a misdemeanor, penalty.
Section 375.176 - Proceedings against promoters.
Section 375.181 - Officers required of companies.
Section 375.186 - Seal and bylaws.
Section 375.191 - Voting by proxy.
Section 375.196 - Adoption of same or misleadingly similar name prohibited.
Section 375.198 - Issuance of shares, regulations concerning.
Section 375.201 - Charter, amendment of, procedure for.
Section 375.221 - Certificate of amendment of articles, how executed, contents.
Section 375.231 - Reduction of capital stock where same has not been fully subscribed.
Section 375.236 - Certificate of authority revoked, when.
Section 375.246 - Reinsurance, when allowed as an asset or reduction from liability.
Section 375.251 - Actions by and against companies.
Section 375.256 - Service of process on companies not authorized to do business in this state.
Section 375.261 - Service of process — procedure.
Section 375.266 - Service of process valid, when.
Section 375.271 - Plaintiff entitled to default judgment, when.
Section 375.281 - Company to furnish bond or certificate of authority before pleading.
Section 375.286 - Postponement of action permitted, when.
Section 375.291 - Company may file motion to quash service — grounds.
Section 375.296 - Additional damages for vexatious refusal to pay.
Section 375.298 - Loan against policy by policyholder, insurer to give notice of interest due.
Section 375.301 - Exemptions from provisions of sections 375.256 to 375.301.
Section 375.320 - Not to trade — exception.
Section 375.325 - Mechanical data processing equipment as assets.
Section 375.326 - Automobiles as assets.
Section 375.330 - Purchase and ownership of real estate.
Section 375.340 - Sale and exchange of real estate.
Section 375.345 - Derivative transactions permitted, conditions — definitions — rules.
Section 375.360 - Note not considered payment — not to loan when insolvent.
Section 375.370 - Collateral to be assigned to company.
Section 375.380 - Dividends shall not be paid, when — penalty — liability of stockholder.
Section 375.390 - Officers not to use funds for private gain — penalty.
Section 375.400 - Investigation by director — duty of prosecuting attorney.
Section 375.410 - Penalty for violation.
Section 375.420 - Vexatious refusal to pay claim, damages for, exception.
Section 375.422 - Directors and officers of stock companies to report ownership.
Section 375.425 - Provisions of 375.423 and 375.424 not to apply, when — equity security defined.
Section 375.426 - Director to make rules and regulations.
Section 375.430 - Certificate revoked if judgment not satisfied.
Section 375.440 - Revocation of license for failure to comply with judicial decree.
Section 375.445 - Company operating fraudulently or in bad faith, penalties.
Section 375.460 - Director to keep deposits — rights of companies.
Section 375.470 - Penalty for violations by director.
Section 375.480 - Withdrawal of securities — notice — examination by director.
Section 375.490 - Payment of judgments out of deposits.
Section 375.500 - Distribution of assets.
Section 375.510 - Reinsurance — rights and liabilities — insolvency.
Section 375.520 - Costs to be paid from deposits — amount.
Section 375.530 - Accounting among beneficiaries of foreign deposits.
Section 375.532 - Investment in debt of institution permitted, when.
Section 375.570 - Manner of commencing proceedings — petition, contents.
Section 375.580 - Issuance, service and return of process.
Section 375.610 - Hearing by the court, procedures — no continuances or discovery, exceptions.
Section 375.620 - Referee or master to hear and report — exceptions, filed by either party.
Section 375.640 - Insurance director to take charge.
Section 375.660 - Disposition of assets.
Section 375.670 - Allowance of demands — receiver to review claims against receivership.
Section 375.710 - Conflict of interests — power of court — trustees.
Section 375.720 - Penalty for failure or refusal to deliver assets to director.
Section 375.740 - Payment of expenses of proceedings.
Section 375.750 - Reports to court — payment of claims.
Section 375.771 - Citation of law.
Section 375.772 - Association, created — definitions.
Section 375.773 - Accounts, types of insurance — applicability of law.
Section 375.775 - Association, powers and duties.
Section 375.776 - Board of directors, selection, terms — powers and duties.
Section 375.777 - Director, powers and duties.
Section 375.780 - Penalties for violation of this chapter.
Section 375.787 - Complaint filed by director, when — injunction authorized.
Section 375.788 - Transaction of insurance business by unauthorized insurer, effect of.
Section 375.790 - Enforcement — foreign decree, qualified party, reciprocal states, defined.
Section 375.791 - Foreign insurance company admitted, when.
Section 375.811 - Application for certificate of authority, contents (foreign company).
Section 375.821 - Conditions to be met for certificate of authority (foreign company).
Section 375.831 - Certificate issued when all conditions met (foreign company).
Section 375.861 - Foreign company survivor of merger, documents to be filed with director.
Section 375.871 - Admitted foreign company may withdraw, how.
Section 375.881 - Revocation or suspension of certificate of authority, when (foreign company).
Section 375.901 - Foreign companies shall transact business through licensed agents and brokers.
Section 375.906 - Foreign companies to appoint director to receive service — methods — penalty.
Section 375.911 - Service on deputy director valid, when.
Section 375.920 - Policy form approval, disapproval — procedure.
Section 375.921 - Hearing on disapproval — action pending, effect on form.
Section 375.922 - Rules and regulations not authorized.
Section 375.923 - Exempt forms.
Section 375.930 - Citation of law — purpose — construction.
Section 375.932 - Definitions.
Section 375.934 - Unfair trade practices — conditions.
Section 375.936 - Unfair practices defined.
Section 375.937 - Lenders, duties — prohibited acts.
Section 375.938 - Director may investigate companies.
Section 375.940 - Procedure on charges or belief of unfair practices.
Section 375.942 - Administrative order for prohibited practices — penalty.
Section 375.944 - Judicial review — decree, order — additional evidence — finality of order, when.
Section 375.945 - Director's determination, judicial review.
Section 375.946 - Violation of desist order, penalty.
Section 375.948 - Additional powers of director — promulgation of rules.
Section 375.950 - Definitions.
Section 375.958 - Ancillary receiver, appointed when, entitled to what property, duties.
Section 375.970 - Preferred claims, how determined.
Section 375.974 - Owners of special deposit claims, priority.
Section 375.982 - Limitation on bringing proceedings, certain liens void.
Section 375.986 - Receiver in reciprocal state may sue.
Section 375.990 - Severability clause — interpretation of sections 375.950 to 375.990.
Section 375.992 - Fraudulent claims for benefits — form — notice to department, when — procedure.
Section 375.995 - Sex or marital status discrimination as to benefits or coverage prohibited.
Section 375.1000 - Citation — purpose — construction.
Section 375.1002 - Definitions.
Section 375.1005 - Improper claims practice, conditions.
Section 375.1007 - Improper claims practices.
Section 375.1009 - Director may investigate.
Section 375.1010 - Director may initiate proceedings.
Section 375.1014 - Judicial review.
Section 375.1016 - Violation of cease and desist order.
Section 375.1018 - Director's powers additional to others — rules and regulations.
Section 375.1025 - Definitions.
Section 375.1028 - Applicability — exemptions.
Section 375.1032 - Audited financial report, contents — form.
Section 375.1040 - Accountant's letter, contents.
Section 375.1042 - Audit of financial statement by independent accountant.
Section 375.1045 - Report of findings of accountant to insurer, contents.
Section 375.1050 - Workpapers, defined — availability to insurance examiners — confidentiality of.
Section 375.1054 - Prohibited acts — violation, penalty.
Section 375.1056 - Report required by insurer, when, contents.
Section 375.1057 - Canadian and British insurers, special requirements.
Section 375.1058 - Internal audit function — exemption, when — requirements.
Section 375.1062 - Severability.
Section 375.1070 - Inapplicability to certain insurers.
Section 375.1072 - Definitions.
Section 375.1074 - Limitation on investments, domestic insurers.
Section 375.1075 - Limitations on aggregate of medium or lower quality investments, requirements.
Section 375.1078 - Limitation on Canadian investments.
Section 375.1080 - Definitions.
Section 375.1090 - Purchasing group subject to insurance laws, exceptions.
Section 375.1095 - Insurance purchased by purchasing group, requirements.
Section 375.1097 - Premium taxes, payment of.
Section 375.1100 - Powers of director.
Section 375.1110 - Citation of law.
Section 375.1112 - Definitions.
Section 375.1120 - Records to be maintained by broker, duration — contents.
Section 375.1122 - Insurer's use of broker, restrictions — financial condition statement required.
Section 375.1127 - Reinsurance manager, prohibited acts.
Section 375.1130 - Insurer's use of manager, restrictions — financial condition statement required.
Section 375.1132 - Examination of reinsurance manager, director may conduct.
Section 375.1135 - Penalties, director may assess, procedures.
Section 375.1137 - Application fee, reinsurance intermediary license — renewal.
Section 375.1140 - Effective date.
Section 375.1150 - Citation of law — applicability.
Section 375.1152 - Definitions.
Section 375.1156 - Cooperation with receiver and director required — penalty.
Section 375.1161 - Violations, penalties.
Section 375.1162 - Director may order activities to prevent delinquency proceeding.
Section 375.1164 - Seizure order, director may petition for, when — effects.
Section 375.1165 - Rehabilitation of insurer, director may petition, when — grounds.
Section 375.1170 - Stay of other pending actions, duration — statute of limitations not to run.
Section 375.1172 - Records deemed public, when — exceptions.
Section 375.1175 - Grounds for liquidation — voluntary dissolution and liquidation, conditions.
Section 375.1178 - Life and health policies, termination of, when.
Section 375.1180 - Dissolution order, director may petition for — effect.
Section 375.1185 - Notices provided by liquidator, procedures.
Section 375.1186 - Agent of insurer, duty to provide information to liquidator — penalty.
Section 375.1188 - Stay of other actions — liquidator may bring certain actions, when.
Section 375.1190 - List of insurer's assets to be prepared — filing — not needed, when.
Section 375.1192 - Fraudulent and voidable transfers — requirements — effects.
Section 375.1194 - Transfer of real property not voidable, when.
Section 375.1196 - Claims of creditor, surrender of preference required.
Section 375.1198 - Mutual credits or debts, setoffs allowed — exceptions.
Section 375.1204 - Payment of unearned premiums required — violation, penalties.
Section 375.1206 - Proof of claim, filed when — effect of late filing.
Section 375.1210 - Contingent claims, allowed when, exceptions.
Section 375.1212 - Third party claims for actions against insureds, filed how — procedures.
Section 375.1214 - Denial of claim — appeal procedure.
Section 375.1215 - Subrogated claim, allowed when.
Section 375.1216 - Valuation of security, procedure.
Section 375.1218 - Classes of claims — priority of distribution.
Section 375.1222 - Payment of claims — duties of liquidator.
Section 375.1224 - Unclaimed funds, deemed unclaimed property — effect.
Section 375.1225 - Discharge of liquidator, when.
Section 375.1226 - Reopening of proceedings, when.
Section 375.1228 - Records may be destroyed after discharge, exceptions.
Section 375.1230 - Audit of receivership may be ordered, when.
Section 375.1234 - Foreign insurers, petition to liquidate assets, grounds — granted when — effects.
Section 375.1236 - Ancillary receiver, director may be appointed as — powers and duties.
Section 375.1238 - Power of director to institute proceedings, when.
Section 375.1240 - Nonresident claims, filed where.
Section 375.1242 - Proof of claims, nonresident insurer — procedures.
Section 375.1244 - Stay of actions during liquidation proceedings.
Section 375.1245 - Priority of nonresident claims, reciprocal states — special deposits, priority.
Section 375.1246 - Nonresident ancillary receiver, claims filed with — priority.
Section 375.1250 - Definitions.
Section 375.1260 - Authorized control level event, occurrence of, when — effect, duties of director.
Section 375.1262 - Mandatory control level event, occurrence of, when — effect, duties of director.
Section 375.1272 - Notices, effective when.
Section 375.1280 - Scope of law.
Section 375.1282 - Application of law — not applicable, when.
Section 375.1285 - Definitions.
Section 375.1292 - Consent to transfer, effect.
Section 375.1294 - Hazardous financial condition of transferring insurer, automatic transfer, when.
Section 375.1295 - Effective date — application dates.
Section 375.1300 - Definitions.
Section 375.1303 - Genetic testing by insurer, limitations — penalty — health plan, defined.
Section 375.1306 - Genetic information, prohibited uses by employers — penalty for violation.
Section 375.1309 - Confidentiality of genetic information, exceptions — penalty for violation.
Section 375.1500 - Sections 375.1500 to 375.1527 apply to life insurance policies, exceptions.
Section 375.1503 - Definitions.
Section 375.1512 - Basic illustration, requirements, contents.
Section 375.1515 - Supplemental illustrations permitted, when — notice required.
Section 375.1521 - Annual report to policy owner, contents.
Section 375.1524 - Illustration actuaries, qualifications, duties — annual certification.
Section 375.1527 - Violation of sections 375.1500 to 375.1527, penalties.
Section 375.1530 - Application of sections 375.1500 to 375.1527.
Section 375.1575 - Denial of claim, disclosure by applicant not required.
Section 375.1730 - Costs of coverage reported to department — rates.
Section 375.1800 - Residency of insurance companies, domestic and foreign.
Section 375.1803 - Court actions against insurance company, venue where — inapplicability, when.
Section 375.1806 - Uninsured and underinsured motorist coverage, venue, where.