Ohio Revised Code
Chapter 3903 | Reserve Valuation; Rehabilitation and Liquidation
Section 3903.12 | Grounds for Rehabilitation Order.

Effective: March 7, 1983
Latest Legislation: House Bill 830 - 114th General Assembly
The superintendent of insurance may file a complaint in the court of common pleas for an order authorizing him to rehabilitate a domestic insurer or an alien insurer domiciled in this state on any one or more of the following grounds:
(A) The insurer is in such condition that the further transaction of business would be hazardous, financially, to its policyholders, creditors, or the public.
(B) There is reasonable cause to believe that there has been embezzlement from the insurer, wrongful sequestration or diversion of the insurer's assets, forgery, or fraud affecting the insurer, or other illegal conduct in, by, or with respect to the insurer that if established would endanger assets in an amount threatening the solvency of the insurer.
(C) The insurer has failed to remove any person who in fact has executive authority in the insurer, whether an officer, manager, general agent, director, trustee, employee, or other person, if the person has been found after notice and hearing by the superintendent to be dishonest or untrustworthy in a way affecting the insurer's business.
(D) Control of the insurer, whether by stock ownership or otherwise, and whether direct or indirect, is in a person or persons found after notice and hearing to be untrustworthy.
(E) Any person who in fact has executive authority in the insurer, whether an officer, manager, general agent, director, trustee, employee, or other person, has refused to be examined under oath by the superintendent concerning its affairs, whether in this state or elsewhere, and after reasonable notice of the fact the insurer has failed promptly and effectively to terminate the employment and status of the person and all his influence on management.
(F) After demand by the superintendent under section 3901.07 or sections 3903.01 to 3903.59 of the Revised Code, the insurer has failed to promptly make available for examination any of its own property, books, accounts, documents, or other records, or those of any subsidiary or related company within the control of the insurer, or those of any person having executive authority in the insurer so far as they pertain to the insurer.
(G) Without first obtaining the written consent of the superintendent, the insurer has transferred, or attempted to transfer, substantially its entire property or business, or has entered into any transaction the effect of which is to merge, consolidate, or reinsure substantially its entire property or business in or with the property or business of any other person.
(H) The insurer or its property has been or is the subject of an application for the appointment of a receiver, trustee, custodian, conservator or sequestrator, or similar fiduciary of the insurer or its property otherwise than as authorized under the insurance laws of this state, and such appointment has been made or is imminent, and such appointment might oust the courts of this state of jurisdiction or might prejudice orderly delinquency proceedings under sections 3903.01 to 3903.59 of the Revised Code.
(I) Within the previous four years the insurer has willfully violated its charter or articles of incorporation, its bylaws, any insurance law of this state, or any valid order of the superintendent under section 3903.09 of the Revised Code.
(J)(1) The insurer has failed to pay within sixty days after due date any obligation to any state or any subdivision of this state or any judgment entered in any state, if the court in which such judgment was entered had jurisdiction over the subject matter except that such nonpayment shall not be a ground until sixty days after any good faith effort by the insurer to contest the obligation has been terminated, whether it is before the superintendent or in the courts.
(2) The insurer has systematically attempted to compromise or renegotiate previously agreed settlements with its creditors on the ground that it is financially unable to pay its obligations in full.
(K) The insurer has failed to file its annual report or other financial report required by statute within the time allowed by law and, after written demand by the superintendent, has failed to give an adequate explanation immediately.
(L) The board of directors or the holders of a majority of the shares entitled to vote, or a majority of those individuals entitled to the control of those entities specified in section 3903.03 of the Revised Code request or consent to rehabilitation under sections 3903.01 to 3903.59 of the Revised Code.

Structure Ohio Revised Code

Ohio Revised Code

Title 39 | Insurance

Chapter 3903 | Reserve Valuation; Rehabilitation and Liquidation

Section 3903.01 | Reserve Valuation - Rehabilitation and Liquidation Definitions.

Section 3903.02 | Citing of Act - Purpose of Act.

Section 3903.03 | Application of Sections.

Section 3903.04 | Jurisdiction.

Section 3903.05 | Temporary Restraining Orders - Injunctions.

Section 3903.06 | Duty of Persons Exercising Control to Cooperate With Superintendent.

Section 3903.07 | Responsibilities of Superintendent and Deputies.

Section 3903.08 | Effect on Pending Proceedings.

Section 3903.09 | Correction Orders Issued by Superintendent.

Section 3903.10 | Complaint - Court May Issue Ex Parte Seizure or Other Order.

Section 3903.11 | Confidentiality of Information - Exceptions.

Section 3903.12 | Grounds for Rehabilitation Order.

Section 3903.13 | Rehabilitation Orders.

Section 3903.14 | Employment of Special Deputies.

Section 3903.15 | Stay of Actions - Statute of Limitations - Standing.

Section 3903.16 | Motion for Order of Liquidation - Order Terminating Rehabilitation of Insurer.

Section 3903.17 | Basis for Liquidation Order.

Section 3903.18 | Liquidation Orders.

Section 3903.19 | Effect of Liquidation Order on Policies.

Section 3903.20 | Dissolution of Corporate Existence.

Section 3903.21 | Liquidator - Powers and Duties.

Section 3903.22 | Notice of Liquidation Order.

Section 3903.24 | Civil Action Against Liquidator or Insurer.

Section 3903.25 | Duplicate List of Insurer's Assets.

Section 3903.26 | Transfers and Obligations Incurred One Year Prior to Proceeding.

Section 3903.27 | Transfers Made After Filing of Complaint.

Section 3903.28 | Preferences.

Section 3903.29 | Allowance of Claims.

Section 3903.30 | Allowance of Setoffs and Counterclaims.

Section 3903.301 | Protection of Rights.

Section 3903.31 | Report of Liquidator to Court.

Section 3903.32 | Reducing Recovery From Reinsurer.

Section 3903.33 | Payment of Unpaid Earned Premiums.

Section 3903.34 | Proposal to Disburse Assets to Guaranty Associations - Contents - Application for Approval.

Section 3903.35 | Proof of Claims to Be Filed With Liquidator.

Section 3903.36 | Proof of Claim Contents.

Section 3903.37 | Contingent Claims- Absolute Claims.

Section 3903.38 | Third Party-Party Claims.

Section 3903.39 | Written Notice of Denial of Claim.

Section 3903.40 | Claims Secured by Undertaking of Another Person.

Section 3903.41 | Methods of Determining Value of Security Held by Secured Creditor.

Section 3903.42 | Priority of Distribution of Claims.

Section 3903.421 | Medicaid Health Insuring Corporation Bond and Securities.

Section 3903.43 | Review and Investigation of Claims.

Section 3903.44 | Court Payment of Distributions.

Section 3903.45 | Distribution of Unclaimed and Withheld Funds.

Section 3903.46 | Discharge of Liquidator.

Section 3903.47 | Motion to Reopen Proceedings.

Section 3903.48 | Court to Direct Retention or Destruction of Insurer's Records.

Section 3903.49 | Audit of Books of Proceeding.

Section 3903.50 | Order Appointing Conservator.

Section 3903.51 | Order Directing Liquidation.

Section 3903.52 | Power of Domiciliary Liquidator.

Section 3903.53 | Appointing Ancillary Receiver.

Section 3903.54 | Discretion of Superintendent to Commence Proceedings.

Section 3903.55 | Foreign Claimants.

Section 3903.56 | Ohio Residents Claiming Against Foreign Insurers.

Section 3903.57 | Attachment, Garnishment or Execution Proceedings Blocked.

Section 3903.58 | Distribution Order Among Claimants From Reciprocal States.

Section 3903.59 | Failure to Transfer Assets to Ohio Liquidator by Ancillary Receiver.

Section 3903.71 | Unsound Company, Suspension of Authority to Do Business.

Section 3903.72 | Definitions for Sections 3903.72 to 3903.7211.

Section 3903.721 | Valuation of Reserves.

Section 3903.722 | Submission of Data Prior to Operative Date of Valuation Manual.

Section 3903.723 | Minimum Standards for the Valuation of Policies.

Section 3903.724 | Determination of Valuation Interest Rate.

Section 3903.725 | Valuation for Individual Annuity and Pure Endowment Contracts.

Section 3903.726 | Submissions Prior to Operative Date of Valuation Manual.

Section 3903.727 | Valuation for Accident and Health Insurance Contracts.

Section 3903.728 | Policies Issued on or After the Operative Date of the Valuation Manual.

Section 3903.729 | Established Reserves; Principle-Based Valuation.

Section 3903.7210 | Submission of Prescribed Data.

Section 3903.7211 | Confidential Information.

Section 3903.73 | Deposit of Securities With Treasurer of State.

Section 3903.74 | Sale and Distribution of Securities of Defaulting Companies.

Section 3903.75 | Notice to Claimants.

Section 3903.76 | Court Procedure.

Section 3903.77 | Property and Casualty Insurance Reporting Requirements.

Section 3903.81 | Risk-Based Capital for Insurers Model Act Definitions.

Section 3903.82 | Annual Report.

Section 3903.83 | Duty to Submit Plan.

Section 3903.84 | Regulatory Action Level Event Duties of Superintendent and Insurer.

Section 3903.85 | Authorized Control Level Event Duties of Superintendent and Insurer.

Section 3903.86 | Mandatory Control Level Event Duties of Superintendent and Insurer.

Section 3903.87 | Right to Request Hearing.

Section 3903.88 | Confidential Information.

Section 3903.89 | Effectiveness of Notice.

Section 3903.90 | Annual Report by Foreign Insurer.

Section 3903.91 | Regulatory Officials - Immunity.

Section 3903.92 | Requirements for Exempting Insurer From Sections.

Section 3903.93 | Rules.

Section 3903.99 | Penalty.