40-3619. Same; litigation pending at time of entry of rehabilitation order, stay of action or proceeding; duties of court and rehabilitator; statutes of limitation and defenses of laches; rights of gu
40-3619
40-3619. Same; litigation pending at time of entry of rehabilitationorder, stay of action or proceeding; duties of court and rehabilitator;statutes of limitation and defenses of laches; rights of guarantyassociations.(a) Any court in this state before which any action orproceedingin which the insurer is a party, or is obligated to defend a party, is pendingwhen a rehabilitation order against the insurer is entered shall stay theaction or proceeding for 90 days and such additional time as is necessary forthe rehabilitator to obtain proper representation and prepare for furtherproceedings. The rehabilitator shall take such action respecting the pendinglitigation as necessary in the interests of justice and for the protection ofcreditors, policyholders and the public. The rehabilitator shall immediatelyconsider all litigation pending outside this state and shall petition thecourts having jurisdiction over such litigation for stays whenever necessary toprotect the estate of the insurer.
(b) No statute of limitation or defense of laches shall run with respect toany action by or against an insurer between the filing of a petition forappointment of a rehabilitator for that insurer and the order granting anddenying that petition. Any action against the insurer that might have beencommenced when the petition was filed may be commenced for at least 60 daysafter the order or rehabilitation is entered or the petition is denied. Therehabilitator, upon an order for rehabilitation, within one year or suchother longer time as applicable law may permit, may institute an action orproceeding on behalf of the insurer upon any cause of action against which theperiod of limitation fixed by applicable law has not expired at the time of thefiling of the petition upon which such order is entered.
(c) Any guaranty association or foreign guaranty association covering lifeor health insurance or annuities shall have standing to appear in any courtproceeding concerning the rehabilitation of a life or health insurer if suchassociation is or may become liable to act as a result of the rehabilitation.
History: L. 1991, ch. 125, § 15; July 1.