KRS 304.33-240: Powers of liquidator.

The liquidator shall report to the court monthly, or at other intervals specified by the

court, on the progress of the liquidation in whatever detail the court orders. Subject to

KRS 304.33-055, the liquidator may:

(1) Appoint a special deputy to act for him or her under this subtitle, and, subject to the

court's approval, determine his or her compensation. The special deputy shall have

all powers of the liquidator granted by this section. The special deputy shall serve at

the pleasure of the liquidator;

(2) Appoint or engage employees and agents, legal counsel, actuaries, accountants,

appraisers, consultants, and other personnel he or she deems necessary to assist in

the liquidation;

(3) Fix the compensation of persons under subsection (2) of this section, subject to the

control of the court;

(4) Defray all expenses of taking possession of, conserving, conducting, liquidating,

disposing of, or otherwise dealing with the business and property of the insurer. If

the property of the insurer does not contain suf ficient cash or liquid assets to defray

the costs incurred, the liquidator may advance the costs so incurred out of any

available appropriation. Any amounts so paid shall be deemed expense of

administration and shall be repaid for the credit of the Departm ent of Insurance out

of the first available moneys of the insurer;

(5) Hold hearings, subpoena witnesses and compel their attendance, administer oaths,

examine any person under oath, and compel any person to subscribe to his or her

testimony after it has been correctly reduced to writing, and in connection therewith

require the production of any books, papers, record, or other documents which he or

she deems relevant to the inquiry;

(6) Collect all debts and moneys due and claims belonging to the insurer, w herever

located, and for this purpose institute timely action in other jurisdictions to marshal

the assets of the insurer; forestall garnishment and attachment proceedings against

such debts; do such other acts as are necessary or expedient to collect, con serve or

protect its assets or property, including sell, compound, compromise, or assign for

purposes of collection, subject to court approval and upon such terms and

conditions as the liquidator deems best, any disputed claims; and pursue any

creditor's remedies available to enforce his or her claims. In lieu of collecting funds

representing unearned premium of a policyholder which are in the possession of the

insurer's agent with respect to the kinds of direct insurance protected under KRS

304.36-030, the liquidator may authorize the use of such funds to replace the

insurance coverage terminated pursuant to KRS 304.33 -210, upon receipt from the

agent of appropriate notice of such replacement of the insurance coverage with an

insurer within sixty (60) days after the date of the liquidation order;

(7) Audit the books and records of all agents of the insurer insofar as these records

relate to the business activities of the insurer;

(8) Conduct public and private sales of the property of the insurer in a manner

prescribed by the court;

(9) Use assets of the estate to transfer policy obligations to a solvent assuming insurer,

if the transfer can be arranged without prejudice to applicable priorities under KRS

304.33-430;

(10) Acquire, hypothecate, encumber, lease, improve, sell, transfer, abandon, or

otherwise dispose of or deal with any property of the insurer at its market value or

upon such terms and conditions as are fair and reasonable, except that no

transaction involving property the market value of which exceeds ten thousand

dollars ($10,000) shall be concluded without express permission of the court. The

liquidator also may execute, acknowledge, and deliver any deeds, assignments,

releases, and other instruments necessa ry or proper to effectuate any sale of

property or other transaction in connection with the liquidation. In cases where real

property sold by the liquidator is located other than in the county where the

liquidation is pending, the liquidator shall cause to be filed with the county clerk for

the county in which the property is located a certified copy of the order appointing

him or her;

(11) Borrow money, subject to court approval, on the security of the insurer's assets or

without security and execute and deliver all documents necessary to that transaction

for the purpose of facilitating the liquidation;

(12) Enter into such contracts as are necessary to carry out the order to liquidate, and

affirm or disavow any contracts to which the insurer is a party, except the liquidator

shall not disavow, reject, or repudiate a federal home loan bank security agreement

or any pledge agreement, security agreement, collateral agreement, guarantee

agreement, or other similar arrangement or credit enhancement relating to a security

agreement to which a federal home loan bank is a party;

(13) Continue to prosecute and institute in the name of the insurer or in his or her own

name any suits and other legal proceedings, in this state or elsewhere, and abandon

the prosecution o f claims he or she deems unprofitable to pursue further. If the

insurer is dissolved under KRS 304.33-220, he or she may apply to any court in this

state or elsewhere for leave to substitute himself or herself for the insurer as

plaintiff;

(14) Prosecute a ny action which may exist on behalf of the creditors, members,

policyholders, or shareholders of the insurer against any officer of the insurer, or

any other person;

(15) Remove any records and property of the insurer to the offices of the commissioner

or to such other place as is convenient for the purposes of efficient and orderly

execution of the liquidation;

(16) Deposit in one (1) or more banks in this state such sums as are required for meeting

current administration expenses and dividend distributions;

(17) File any necessary documents for record in the office of any county clerk or record

office in this state or elsewhere where property of the insurer is located;

(18) Assert all defenses available to the insurer as against third persons, including

statutes of limitations, statutes of frauds, and the defense of usury. A waiver of any

defense by the insurer after a petition for liquidation has been filed shall not bind

the liquidator;

(19) Exercise and enforce all the rights, remedies and powers of any creditor,

shareholder, policyholder, or member, including any power to avoid any transfer or

lien that may be given by law and that is not included within KRS 304.33 -290 to

304.33-310, inclusive;

(20) Intervene in any proceeding wherever instituted that mi ght lead to the appointment

of a receiver or trustee, and act as the receiver or trustee whenever the appointment

is offered;

(21) Enter into agreements with any receiver or commissioner of any other state relating

to the rehabilitation, liquidation, conse rvation, or dissolution of an insurer doing

business in both states;

(22) Exercise all powers now held or hereafter conferred upon receivers by the laws of

this state not inconsistent with this subtitle; and

(23) The enumeration in this section of the powers and authority of the liquidator is not a

limitation upon him or her, nor does it exclude his or her right to do such other acts

not herein specifically enumerated or otherwise provided for as are necessary or

expedient for the accomplishment of or in aid of the purpose of liquidation.