KRS 304.33-160: Powers and duties of the rehabilitator.

(1) Special deputy. The commissioner as rehabilitator shall appoint one (1) or more

special deputies, who are active or retired senior executives from a successful

insurer, and who shall have all the powers and responsibilities of the rehabilitator

granted under this section, and the commissioner may employ such counsel, clerks,

and assistants as deemed necessary. The compensation of the special deputy,

counsel, clerks, and assistants and all expenses of taking possession of the insurer

and of conducting the pr oceedings shall be fixed by the commissioner, with the

approval of the court and shall be paid out of the funds or assets of the insurer. The

persons appointed under this section shall serve at the pleasure of the commissioner.

If the property of the insur er does not contain sufficient cash or liquid assets to

defray the costs incurred, the commissioner may advance the costs so incurred out

of any appropriation for the maintenance of the Department of Insurance. Any

amounts so advanced for expenses of admin istration shall be repaid to the

commissioner for the use of the Department of Insurance out of the first available

money of the insurer.

(2) General power. The rehabilitator may take action as he or she deems necessary or

appropriate to reform and revital ize the insurer. He or she shall have all the powers

of the directors, officers, and managers, whose authority shall be suspended, except

as they are redelegated by the rehabilitator. He or she shall have full power to direct

and manage, to hire and discha rge employees subject to any contract rights they

may have, and to deal with the property and business of the insurer.

(3) Advice from experts. The rehabilitator may consult with and obtain formal or

informal advice and aid of insurance experts.

(4) Pursuit of insurer's claims against insiders. If the rehabilitator finds that there has

been criminal or tortious conduct or breach of any contractual or fiduciary

obligation detrimental to the insurer by any officer, manager, agent, employee, or

other person, h e or she may pursue all appropriate legal remedies on behalf of the

insurer.

(5) Reorganization plan. The rehabilitator may prepare a plan for the reorganization,

consolidation, conversion, reinsurance, merger, or other transformation of the

insurer. Upon application of the rehabilitator for approval of the plan, and after the

notice and hearing as the court prescribes, the court may either approve or

disapprove the plan proposed, or may modify it and approve it as modified. If it is

approved, the rehabilit ator shall carry out the plan. In the case of a life insurer, the

plan proposed may include the imposition of liens upon the equities of

policyholders of the insurer, if all rights of shareholders are first extinguished. A

plan for a life insurer may also propose imposition of a moratorium upon loan and

cash surrender rights upon policies, for such period and to such an extent as are

necessary.

(6) Fraudulent transfers. The rehabilitator shall have the power to avoid fraudulent

transfers under KRS 304.33-290 and 304.33-300.