(a) A transfer of or lien on the property of an insurer is voidable if the transfer or lien is:
(1) made or created within 4 months before the issuance of a show-cause order under this subtitle;
(2) made or created with the intent to give a creditor a preference or to enable the creditor to obtain a greater percentage of the debt than another creditor of the same class; and
(3) accepted by the creditor having reasonable cause to believe that the preference will occur.
Personal liability of directors, officers, employees, or other persons acting on behalf of insurers
(b) Each director, officer, employee, stockholder, member, subscriber, and any other person acting on behalf of an insurer that is concerned in a voidable transfer under subsection (a) of this section and each person that, as a result of the voidable transfer, receives any property of the insurer or benefits from the voidable transfer:
(1) is personally liable; and
(2) shall account to the Commissioner.
Powers of Commissioner as receiver in delinquency proceeding
(c) The Commissioner as receiver in a delinquency proceeding may:
(1) avoid a transfer of or lien on the property of an insurer that a creditor, stockholder, subscriber, or member of the insurer might have avoided; and
(2) recover the transferred property or its value from the person that received it unless that person was a bona fide holder for value before the date of issuance of a show-cause order under this subtitle.
Nonvoidable transfers
(d)(1) Except as provided in paragraph (2) of this subsection, the receiver for an insurer-member may not void any transfer of, or any obligation to transfer, money or any other property arising under or in connection with:
(i) a federal home loan bank security agreement;
(ii) a pledge, a security, collateral, or a guarantee agreement; or
(iii) any other similar arrangement or credit enhancement relating to a federal home loan bank security agreement made in the ordinary course of business and in compliance with the applicable federal home loan bank agreement.
(2) The receiver may void a transfer under this section if the transfer was made with intent to hinder, delay, or defraud:
(i) the insurer-member;
(ii) the receiver for the insurer-member; or
(iii) existing or future creditors.
Delinquency proceedings under 12 C.F.R. § 1266
(e) This section may not affect a receiver's rights regarding advances to an insurer-member in delinquency proceedings under 12 C.F.R. § 1266.
Credits
Added by Acts 1996, c. 11, § 1, eff. Oct. 1, 1997. Amended by Acts 2021, c. 765, § 1, eff. June 1, 2021; Acts 2021, c. 766, § 1, eff. June 1, 2021.
Formerly Art. 48A, § 157.
MD Code, Insurance, § 9-221, MD INSURANCE § 9-221
Current through legislation effective through April 9, 2023, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
