Rutgers Law

New Jersey Statutes, Title: 17, CORPORATIONS AND INSTITUTIONS FOR FINANCE AND INSURANCE

    Chapter 30c:

      Section: 17:30c-25: Voidable transfers.

          25. a. Any transfer of, or lien upon, the property of an insurer which is made or created within 4 months prior to the granting of an order to show cause under this act with the intent of giving to any creditor or of enabling him to obtain a greater percentage of his debt than any other creditor of the same class, and which is accepted by such creditor having reasonable cause to believe that such a preference will occur, shall be voidable.

b. Every director, officer, employee, stockholder, policyholder, and any other person acting on behalf of such insurer who shall be concerned in any such act or deed and every person receiving thereby any property of such insurer or the benefit thereof, shall be personally liable therefor and shall be bound to account to the commissioner.

c. The commissioner, as receiver in any proceeding under this act, may avoid any transfer of, or lien upon the property of an insurer which any creditor, stockholder or policyholder of such insurer might have avoided, and may recover the property so transferred, or its value from the person to whom it was transferred, unless such person was a bona fide holder for value prior to the date of the granting of an order to show cause under this act. Such property or its value may be recovered from anyone who has received it, except a bona fide holder for value as above specified.

d. (1) A receiver shall not void a transfer of money or other property arising under or in conjunction with a federal home loan bank security agreement provided that the transfer:

(a) is made before the commencement of a formal proceeding under P.L.1975, c.113 (C.17:30C-1 et seq.) in the ordinary course of business and in compliance with the security agreement; and

(b) the security agreement is valid pursuant to State law and the "Federal Home Loan Bank Act" (12 U.S.C. s.1421 et seq.).

(2) A receiver shall not void a redemption or repurchase of any stock or equity securities made by the federal home loan bank if the redemption or repurchase: (a) is made within four months of a formal commencement of the delinquency proceeding; or (b) has received prior approval of the receiver.

(3) A receiver may void any transfer if the transfer is made with actual intent to hinder, delay, or defraud the insurer-member, a receiver appointed for the insurer-member, or existing or future creditors.

e. Following the appointment of a receiver for an insurer-member and upon request of the receiver, the federal home loan bank shall, within 10 days of the request, provide a process and establish a timeline for:

(1) the release of the collateral that exceeds the lending value required to support secured obligations remaining after a repayment of advances, as determined in accordance with the federal home loan bank security agreement;

(2) the release of any collateral remaining in the federal home loan bank's possession following repayment of all outstanding secured obligations in full;

(3) the payment of fees and the operation of deposits and other accounts with the federal home loan bank; and

(4) the possible redemption or repurchase of federal home loan bank stock or excess stock of any class that an insurer-member is required to own.

f. Upon the request of the receiver for an insurer-member, the federal home loan bank shall provide any available options for the insurer-member to renew or restructure an advance to defer associated prepayment fees, to the extent that market conditions, the terms of the advance outstanding to the insurer-member, the applicable policies of the federal home loan bank, and compliance with the "Federal Home Loan Bank Act" (12 U.S.C. s.1421 et seq.) and corresponding regulations permit.

g. Nothing in this section shall affect the receiver's rights pursuant to 12 C.F.R. s.1266.4 regarding advances to an insurer-member in delinquency proceedings.

L.1975, c. 113, s. 25, eff. June 3, 1975; amended 2023, c.172, s.4.

This section added to the Rutgers Database: 2024-03-04 16:43:23.

Older versions of 17:30c-25 (if available):

Court decisions that cite this statute: CLICK HERE.