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flaancial reporting and changes in reinsuranco; couse and dasist orders; and laplementation of special reporting requirements. Action is administrative without judicial action, unless judiciai rollef is sought by the insurer. Actions taken la this phase may be taken through a consent order agreed to by tho Insurer in these jurisdictions where other legislatively established renodles may not be available to the regulator: Pouso Three · Pormal action taken administratively or judicially permitting the department to oversee the daily activities of the insurer. The action may be confidential or public and the oversight may be done directly by the departaent or appolatoes. Phase Four - The commissioner may take possession and control of all or a part of the property, books, accounts, documents and other records of an insurer and the premises occupied by it for the transaction of its business if the Interests of the policyholders, creditors or public will be endangered. This seizure may accomplished adainistratively
judicially. If accomplished administratively, the insurer may be seized after a hearing or prior to hearing if the commissioner believes irreparable han may be done unless immediate action is taken. Adalnistrative orders may be subject to judicial review and relief. Selgure actions and related documents are generally confidential unless made public at the request of the Insurer or when vacated by a court order under a formal delinquency proceeding. Under a judicial order a specific duration for the order may be set by the court. these five Through forul judicial delinquency proceedings, generally pursuant to specific grounds for the action, the commissioner takes control of the Insurer with the Intont of staming any erosion to the assets of the insurer, ollainating problems in its operation and returning the insurer to the position of becoming an on-going viable entity. This court ordered action generally takes place under the direction of an individual appointed by the commissioner and ney include specific direction by court, a court approved operating plan or the general direction of the Individual appointed under the supervision of the court. This phase either terminates with the court ordered return of the Insurer to normal operation or by court ordered liquidation of the insuror. Meso $43 · Through forwal judicial delinquency proceedings, generally pursuant to specific grounds for the action, the commissioner takes control with the Intent of liquidating the Insuror and ultimately requesting its dissolution. Liquidation follows the statutorially defined procedures for liquidation. This is « court ordered action which may take place with or without a prior formal delinquency proceeding.
Dissolution of the insurer after the completion of liquidation.
You also may wish to consider combining Parts I and II into one survey in this restructuring. In addition, you should consider giving the states more time to msver the survey. In some departments it may take considerable effort to pull this laftruation together. We would be happy to discuss these comments with you further and reviev revized draft. You may contact Jean Olson at 816/842-3600 or Jin Schacht at 217/785-5516 for a more specific explanation of our concerns. Beyond that, we are willing to do whatever we reasonably can to help you structure a survey which will yield meaningful information in terms of the objectives of your study.
Bob Klein :
Sandra Gilfillan, Executive Vice President
Honorable John Dingell
James W. Schacht
On behalf of GAO, I must decline the request made in your
The Honorable John D. Dingell
for the hearing record, we are submitting a copy of Article
We understand that, in its letter of May 31, 1991, the Acting Director of the Illinois Department has asserted that the accreditation team was shown everything they requested to examine and that nothing was withheld for confidentiality reasons.
Based our observations of NAIC's accreditation review of the
confidentiality reasons. However, the fact remains that the team did not have access to confidential corrective orders and holding company registration reports which would be necessary to fully assess illinois' compliance with NAIC's accreditation standards.
You may include this letter in the Subcommittee's hearing record to further support our previous testimony. If you have any questions, please call me on (202) 275-8678 or Lawrence D. Cluff on (202) 275-5194.
James Long, NAIC President