§ 27-14.3-31. Fraudulent transfer after petition.
(a) After a petition for rehabilitation or liquidation has been filed, a transfer of any of the real property of the insurer made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid for it, for the amount the transferee shall have a lien on the transferred property. The commencement of a proceeding in rehabilitation or liquidation shall be constructive notice upon the recording of a copy of the petition for or order of rehabilitation or liquidation with the recorder of deeds in the city or town where any real property in question is located. The exercise by a court of the United States or any state or jurisdiction to authorize or effect a judicial sale of real property of the insurer within any county in any state shall not be impaired by the pendency of a proceeding unless the copy is recorded in the county prior to the consummation of the judicial sale.
(b) After a petition for rehabilitation or liquidation has been filed and before either the receiver takes possession of the property of the insurer or an order of rehabilitation or liquidation is granted:
(1) A transfer of any of the property of the insurer, other than real property, made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value or, if not made for a present fair equivalent value, then valid to the extent of the present consideration actually paid for it, for the amount the transferee shall have a lien on the transferred property;
(2) A person indebted to the insurer or holding property of the insurer may, if acting in good faith, pay the indebtedness or deliver the property, or any part of the property, to the insurer or upon his or her order, with the same effect as if the petition were not pending;
(3) A person having actual knowledge of the pending rehabilitation or liquidation shall be deemed not to act in good faith; and
(4) A person asserting the validity of a transfer under this section shall have the burden of proof. Except as provided in this section, no transfer by or on behalf of the insurer after the date of the petition for liquidation by any person other than the liquidator shall be valid against the liquidator.
(c) Every person receiving any property from the insurer or any benefit of the property which is a fraudulent transfer under subsection (a) of this section shall be personally liable for it and shall be bound to account to the liquidator.
(d) Nothing in this chapter shall impair the negotiability of currency or negotiable instruments.
History of Section.P.L. 1993, ch. 248, § 1.
Structure Rhode Island General Laws
Chapter 27-14.3 - Insurers’ Rehabilitation and Liquidation Act
Section 27-14.3-1. - Short title — Construction — Purpose.
Section 27-14.3-2. - Applicability.
Section 27-14.3-3. - Definitions.
Section 27-14.3-4. - Jurisdiction and venue.
Section 27-14.3-5. - Injunctions and orders.
Section 27-14.3-6. - Cooperation of officers, owners, and employees.
Section 27-14.3-7. - Repealed.
Section 27-14.3-8. - Condition on release from delinquency proceedings.
Section 27-14.3-9. - Immunity and indemnification of the receiver and employees.
Section 27-14.3-10. - Court’s seizure order.
Section 27-14.3-11. - Commencement of formal delinquency proceeding.
Section 27-14.3-12. - Return of summons and summary hearing.
Section 27-14.3-13. - Proceedings for expedited trial — Continuances, discovery, and evidence.
Section 27-14.3-14. - Decision and appeals.
Section 27-14.3-15. - Confidentiality of hearings.
Section 27-14.3-16. - Grounds for rehabilitation.
Section 27-14.3-17. - Rehabilitation order.
Section 27-14.3-18. - Powers and duties of rehabilitator.
Section 27-14.3-19. - Actions by and against rehabilitator.
Section 27-14.3-20. - Termination of rehabilitation.
Section 27-14.3-21. - Grounds for liquidation.
Section 27-14.3-22. - Liquidation orders.
Section 27-14.3-23. - Continuance of coverage.
Section 27-14.3-24. - Dissolution of insurer.
Section 27-14.3-25. - Powers of liquidator.
Section 27-14.3-26. - Notice to creditors and others.
Section 27-14.3-27. - Duties of agents or insurance producers.
Section 27-14.3-28. - Actions by and against liquidator.
Section 27-14.3-29. - Collection and list of assets.
Section 27-14.3-30. - Fraudulent transfers prior to petition.
Section 27-14.3-31. - Fraudulent transfer after petition.
Section 27-14.3-32. - Voidable preferences and liens.
Section 27-14.3-33. - Claims of holders of void or voidable rights.
Section 27-14.3-34. - Setoffs.
Section 27-14.3-35. - Assessments.
Section 27-14.3-36. - Reinsurer’s liability.
Section 27-14.3-37. - Recovery of premiums owed.
Section 27-14.3-38. - Domiciliary liquidator’s proposal to distribute assets.
Section 27-14.3-39. - Filing of claims.
Section 27-14.3-40. - Proof of claim.
Section 27-14.3-41. - Special claims.
Section 27-14.3-42. - Special provisions for third party claims.
Section 27-14.3-43. - Disputed claims.
Section 27-14.3-44. - Claims of surety.
Section 27-14.3-45. - Secured creditor’s claims.
Section 27-14.3-46. - Priority of distribution.
Section 27-14.3-46.1. - Insurer assessments.
Section 27-14.3-47. - Liquidator’s recommendations to the court.
Section 27-14.3-48. - Distribution of assets.
Section 27-14.3-49. - Unclaimed and withheld funds.
Section 27-14.3-50. - Termination of proceedings.
Section 27-14.3-51. - Reopening liquidation.
Section 27-14.3-52. - Disposition of records during and after termination of liquidation.
Section 27-14.3-53. - External audit of receiver’s books.
Section 27-14.3-54. - Conservation of property of foreign or alien insurers found in this state.
Section 27-14.3-55. - Liquidation of property of foreign or alien insurers found in this state.
Section 27-14.3-56. - Domiciliary liquidators in other states.
Section 27-14.3-57. - Ancillary formal proceedings.
Section 27-14.3-58. - Ancillary summary proceedings.
Section 27-14.3-59. - Claims of nonresidents against insurers domiciled in this state.
Section 27-14.3-60. - Claims of residents against insurers domiciled in reciprocal states.
Section 27-14.3-61. - Attachment, garnishment and levy of execution.
Section 27-14.3-62. - Interstate priorities.
Section 27-14.3-63. - Subordination of claims for noncooperation.