CHAP. 64.—An ACT in relation to proceedings against and the liquidation
of delinquent insurance corporations.

Approved February 29, 1912.

1. Be it enacted by the general assembly of Virginia, That
whenever any domestic corporation, association, society or order
which, by the act ‘“‘concerning the bureau of insurance,” approved
March ninth, nineteen hundred and six, is placed under. the
bureau of insurance and subject to the supervision of the com-
missioner of insurance (a) is insolvent; or (b) has refused to
submit its books, papers, accounts or affairs to the reasonable
inspection of the commissioner of insurance, or his deputy or
examiner; or (c) has neglected or refused to observe an order
of the commissioner to make good within ninety days any de-
ficiency, whenever its capital, if it be a stock corporation, or its
reserve, if it be a mutual corporation, shall have become im-
paired; or (d) has, by contract of reinsurance or otherwise,
transferred or attempted to transfer substantially its entire
property or business, or entered into any transaction the effect
of which is to merge substantially its entire property or business
in the property or business of any other corporation, association,
society or order, without first having first obtained the written
approval of the commissioner; or (e) is found, after an ex-
amination, to be in such condition that its further transaction of
business will be hazardous to its policyholders, or to its creditors,
or to the public; or (f) has wilfully violated its charter or any
law of the State; or (g) whenever any officer thereof has refused
to be examined under oath touching its affairs, the commissioner
of insurance may, with the approval of the State corporation
commission, the attorney general representing him, apply to the
judge of the circuit court of the city of Richmond for an order
directing such corporation to show cause why the commissioner
should not take possession of its property and conduct its busi-
ness, and for such other relief as the nature of the case and the
interests of its policyholders, creditors, stockholders or the public
may require.

2. On such application, or at any time thereafter, such court
may, in its discretion, issue an injunction restraining such cor-
poration from the transaction of its business or disposition of
its property until the further order of the court. On the return
of such order to show cause, and after a full hearing, the court
shall either deny the application or direct the commissioner
forthwith to take possession of the property and conduct the
business of such corporation, and retain such possession and con-
duct such business until, on the application either of the com-
missioner, the attorney general representing him, or of such
corporation, it shall, after a like hearing, appear to the court that
the ground for such order directing the commissioner to take
possession has been removed and that the corporation can prop-
erly resume possession of its property and the conduct of its
business.

3. If, on a like application and order to show cause, and
after a full hearing, the court shall order the liquidation of the
business of such corporation, such liquidation shall be made by
and under the direction of the commissioner, who may deal with
the property and business of such corporation in his own name
as commissioner or in the name of the corporation, as the court
may direct, and shall be vested by operation of law with the
title to all of the property, contracts and rights of action of such
corporation as of the date of the order so directing him to liqui-
date. The filing or recording of such order in any record office
of the State shall impart the same notice that a deed, bill of sale
or other evidence of title duly filed or recorded by such corpor-
ation would have imparted.

4. For the purpose of this section, the commissioner shall
have power to appoint, under his hand and official seal, one or
more special deputy commissioners of insurance, as his agent or
agents, and to employ such counsel, clerks and assistants as may
by him be deemed necessary, and give each of such person such
powers to assist him as he may consider wise. The compensation
of such special deputy commissioners, counsel, clerks and assist-
ants, and all expenses of taking possession of and conducting the
business of liquidating any such corporation shall be fixed by the
commissioner, subject to the approval of the court, and shall, on
certificate of the commissioner be paid out of the funds or
assets of such corporation.

5. For the purpose of this section, the commissioner shall
have power, subject to the approval of the court, to make and
prescribe such rules and regulations as to him shall seem proper.

6. The commissioner shall transmit to the State corporation
commission, in his annual report, the names of the corporations
so taken possession of, whether the same have resumed business
or have been liquidated, and such other facts as shall acquaint
the policyholders, creditors, stockholders and the public with his
proceedings under this section; and, to that end, the special
deputy commissioner in charge of any such corporation shall
file annually with the commissioner a report of the affairs of
such corporation similar to that required by law to be filed by
such corporation.

7. Whenever any foreign corporation, association, society or
order which, by the act “concerning the bureau of insurance,”
approved March ninth, nineteen hundred and six, is placed under
the bureau of insurance and subject to the supervision of the
commissioner of insurance, and which has complied with section
twelve hundred and seventy-one of the Code of Virginia by
making a deposit with the State treasurer, shall have become
insolvent or shall be in such financial condition as not to be able
to pay its creditors in this State, then the commissioner of
insurance may, with the approval of the State corporation com-
mission, the attorney general representing him, apply to the
judge of the circuit court of the city of Richmond for an order
directing the said commissioner to take possession of its property
in this State, and distribute its assets among those found to be
entitled thereto, which distribution shall be under the direction
of the court.