N.J. Stat. tit. 17, ch. 30C

N.J. Stat. tit. 17, ch. 30C
in effect

N.J. Stat. § 17:30C-1 Definitions

1. a. "Impairment or insolvency" means the capital of a stock insurer or the surplus of a mutual insurer, shall be deemed to be impaired and the insurer shall be deemed to be insolvent, when such insurer is not possessed of assets at least equal to all liabilities and required reserves together with its total issued and outstanding capital stock of a stock insurer, or the minimum surplus if a mutual insurer required by this title to be maintained for the kind or kinds of insurance it is then authorized to transact. b. "Insurer" shall include a person subject to the insurance supervisory authority of, or to liquidation, rehabilitation, reorganization or conservation by, the commissioner or the equivalent insurance supervisory official of another state; also all persons purporting to be engaged as insurer in this State, and persons in process of organization to become insurers, pursuant to the provisions of Title 17 of the Revised Statutes. c. "Delinquency proceeding" means any proceeding commenced against an insurer pursuant to this act for the purpose of liquidating, rehabilitating, reorganizing or conserving such insurer. d. "Domiciliary state" means the state in which an insurer has its domicile, or in the case of an alien insurer the State in which such insurer, having become authorized to do business in such state, has at the commencement of delinquency proceedings, the largest amount of its assets held in trust and assets held on deposit for the benefit of its policyholders or policyholders and creditors in the United States, and any such insurer is deemed to be domiciled in such state. e. "Ancillary state" means any state other than a domiciliary state. f. "Reciprocal state" means any state other than this State in which in substance and effect the provisions of the Uniform Insurers Liquidation Act, as defined in section 23 of this act are in force, including the provisions requiring that the commissioner or equivalent insurance supervisory official be the receiver of a delinquent insurer. g. "General assets" means all property, real, personal or otherwise, not specifically mortgaged, pledged, deposited or otherwise encumbered for the security or benefit of specified persons or a limited class or classes of persons, and as to such specifically encumbered property the term includes all such property or its proceeds in excess of the amount necessary to discharge the sum or sums secured thereby. Assets held in trust and assets held on deposit for the security or benefit of all policyholders or all policyholders and creditors in the United States shall be deemed general assets. h. "Preferred claim" means any claim with respect to which the law of the State or of the United States accords priority of payment from the general assets of the insurer. i. "Special deposit claim" means any claim secured by a deposit made pursuant to statute for the security or benefit of a limited class or classes of persons, but not including any general assets. j. "Secured claim" means any claim secured by mortgage, trust, deed, pledge, deposit as security, escrow or otherwise, but not including special deposit claim or claims against general assets. The term also includes claims which more than 4 months prior to the commencement of delinquency proceedings in the state of the insurer's domicile have become liens upon specific assets by reason of judicial process. k. "Receiver" means receiver, liquidator, rehabilitator or conservator as the context may require. l. "Federal home loan bank" means a bank as defined in 12 U.S.C. s.1422(1)(A). m. "Insurer-member" means an insurer that is a member of a Federal Home Loan Bank. n. "Advance" shall have the same meaning as that term is defined at 12 C.F.R. s.1266.1. L.1975, c. 113, s. 1, eff. June 3, 1975; amended 2023, c.172, s.1.

N.J. Stat. § 17:30C-2 Jurisdiction of delinquency proceedings

The Superior Court shall have original jurisdiction of delinquency proceedings under this act. L.1975, c. 113, s. 2, eff. June 3, 1975.

N.J. Stat. § 17:30C-3 Exclusive remedy--appeal

Delinquency proceedings pursuant to this act shall constitute the sole and exclusive method of liquidating, rehabilitating, reorganizing or conserving an insurer, and no court shall entertain a petition for the commencement of such proceedings, or any other similar procedure, unless the same has been instituted by the commissioner. L.1975, c. 113, s. 3, eff. June 3, 1975.

N.J. Stat. § 17:30C-4 Commencement of delinquency proceeding

4. a. The commissioner shall commence any such proceeding by an application to the court or to any judge thereof, for an order directing the insurer to show cause why the commissioner should not have the relief prayed for. b. The application shall be by verified petition, setting forth the ground or grounds for the proceeding and the relief demanded. c. If the court is satisfied from reading the commissioner's petition that the facts therein alleged, if established, would constitute grounds for a delinquency proceeding under this act, it shall issue an order to show cause as referred to in a. above. d. On the return of the order to show cause, the court shall either deny the application or grant the application together with such other relief as the nature of the case and the interests of the policyholders, creditors, stockholders, members, subscribers or the public may require. e. Notwithstanding any provision of law to the contrary, the commencement of a delinquency proceeding with respect to an insurer-member shall not operate as a stay, injunction, or prohibition of exercise by a federal home loan bank of its rights regarding collateral pledged by that insurer-member. L.1975, c. 113, s. 4, eff. June 3, 1975; amended 2023, c.172, s.2.

N.J. Stat. § 17:30C-5 Injunctions

5. a. Upon application by the commissioner for such an order to show cause, or at any time thereafter, the court may, without notice, issue an injunction restraining the insurer, its officers, directors, stockholders, policyholders, agents, and all other persons from the transaction of its business or the waste or disposition of its property until the further order of the court. b. The court may, at any time during a proceeding under this act, issue such other injunctions or orders as may be deemed necessary to prevent interference with the commissioner or the proceeding, or waste of the assets of the insurer, or the commencement or prosecution of any actions, or the obtaining of preferences, judgments, attachments or other liens, or the making of any levy against the insurer or against its assets or any part thereof. c. Notwithstanding any provision of law to the contrary, the commencement of a delinquency proceeding with respect to an insurer-member shall not operate as a stay, injunction, or prohibition of exercise by a federal home loan bank of its rights regarding collateral pledged by that insurer-member. L.1975, c. 113, s. 5, eff. June 3, 1975; amended 2023, c.172, s.3.

N.J. Stat. § 17:30C-6 Grounds for rehabilitation--domestic insurers

The commissioner may apply to the court for an order directing him to rehabilitate a domestic insurer upon one or more of the following grounds: That the insurer a. Is impaired or insolvent; or b. Has refused to submit its books, records, accounts or affairs to the reasonable examination of the commissioner; or c. Has concealed or removed records or assets in violation of regulations which the commissioner may adopt; or d. Has failed to comply with the commissioner's order, made pursuant to law, to make good an impairment of capital (if a stock insurer) or an impairment of surplus (if a mutual insurer) within the time prescribed by law; or e. Has transferred or attempted to transfer substantially its entire property or business, or has entered into any transaction the effect of which is to merge substantially its entire property or business in that of any other insurer without first having obtained the written approval of the commissioner; or f. Is found, after examination, to be in such condition that its further transaction of business will be hazardous to its policyholders, or to its stockholders, or to its creditors, or to the public; or g. Has willfully violated its charter or any law of this State; or h. Has an officer, director, or manager who has unlawfully refused to be examined under oath, concerning its affairs; or i. Has failed or refused to take such steps as may be necessary to remove from office any officer or director whom the commissioner has found, after notice to and hearing of such insurance company and of such officer or director, to be a dishonest or untrustworthy person; or j. Has been the subject of an application for the appointment of a receiver, trustee, custodian or sequestrator of the insurer or of its property, otherwise than pursuant to the provisions of this act but only if such appointment has been made or is imminent; or k. Has consented to such an order through a majority of its directors, stockholders, or policyholders; or l. Has failed to pay a final judgment rendered against it in any state upon any insurance contract issued or assumed by it, within 30 days after the judgment became final or within 30 days after time for taking an appeal has expired, or within 30 days after dismissal of an appeal before final determination, whichever date is the later. L.1975, c. 113, s. 6, eff. June 3, 1975.

N.J. Stat. § 17:30C-7 Nature of rehabilitation order--termination of rehabilitation--domestic insurers

a. An order to rehabilitate a domestic insurer shall direct the commissioner forthwith to take possession of the property of the insurer and to conduct the business thereof, and to take such steps toward removal of the causes and conditions which have made rehabilitation necessary, as the court may direct. b. If at any time the commissioner deems that further efforts to rehabilitate the insurer would be useless, he may apply to the court for an order of liquidation. c. The commissioner, or any interested person upon due notice to the commissioner, at any time may apply for an order terminating the rehabilitation proceeding and permitting the insurer to resume possession of its property and the conduct of its business. L.1975, c. 113, s. 7, eff. June 3, 1975.

N.J. Stat. § 17:30C-8 Grounds for liquidation

The commissioner may apply to the court for an order directing him to liquidate the business of a domestic insurer or of the United States branch of an alien insurer having trusteed assets in this State, regardless of whether or not there has been prior order directing him to rehabilitate such insurer, upon any of the grounds specified in section 6, or upon any one or more of the following grounds: That the insurer a. Has ceased transacting business for a period of 1 year; or b. Is an insolvent insurer and has commenced voluntary liquidation or dissolution, or attempts to commence or prosecute any action or proceeding to liquidate its business or affairs, or to dissolve its corporate charter, or to procure the appointment of a receiver, trustee, custodian, or sequestrator under any laws except this act; or c. Has not organized or completed its organization and obtained a certificate of authority as an insurer. L.1975, c. 113, s. 8, eff. June 3, 1975.

N.J. Stat. § 17:30C-9 Order of liquidation--domestic insurers

a. An order to liquidate the business of a domestic insurer shall direct the commissioner forthwith to take possession of the property of the insurer, to liquidate its business, to deal with the insurer's property and business in his own name as commissioner or in the name of the insurer as the court may direct and to give notice to all creditors who may have claims against the insurer to present such claims. b. The commissioner may apply under this act for an order dissolving the corporate existence of a domestic insurer: (1) Upon his application for an order of liquidation of such insurer, or at any time after such order has been granted; or (2) Upon the grounds specified in section 8 c., regardless of whether an order of liquidation is sought or has been obtained. L.1975, c. 113, s. 9, eff. June 3, 1975.

N.J. Stat. § 17:30C-10 Order of liquidation--alien insurers

An order to liquidate the business of a United States branch of an alien insurer having trusteed assets in this State shall be in the same terms as those prescribed for domestic insurers, save and except only that the assets of the business of such United States branch shall be the only assets included therein. L.1975, c. 113, s. 10, eff. June 3, 1975.

N.J. Stat. § 17:30C-11 Grounds for conservation--foreign insurers

The commissioner may apply for an order directing him to conserve the assets within this State of a foreign insurer upon any one or more of the following grounds: a. Upon any of the grounds specified in section 6, and in section 8 b. b. That its property has been sequestrated in its domiciliary sovereignty or in any other sovereignty. L.1975, c. 113, s. 11, eff. June 3, 1975.

N.J. Stat. § 17:30C-12 Grounds for conservation--alien insurers

The commissioner may apply for an order directing him to conserve the assets within this State of an alien insurer upon any one or more of the following grounds: a. Upon any of the grounds specified in section 6 and in section 8 b. b. Upon the ground that the insurer has failed to comply within the time designated by the commissioner, with an order made by him to make good an impairment of its trusteed funds, or c. Upon the ground that the property of the insurer has been sequestrated in its domiciliary sovereignty or elsewhere. L.1975, c. 113, s. 12, eff. June 3, 1975.

N.J. Stat. § 17:30C-13 Conservation or ancillary receivership--foreign insurers

a. An order to conserve the assets of a foreign insurer shall direct the commissioner forthwith to take possession of the property of the insurer within this State and to conserve it, subject to the further direction of the court. b. Whenever a domiciliary receiver is appointed for any such insurer in its domiciliary state the court shall, on application of the commissioner, appoint the commissioner as the ancillary receiver in this State. c. An order to liquidate the assets in this State of a foreign insurer shall require the commissioner forthwith to take possession of the property of the insurer within this State and to liquidate it subject to the orders of the court and with due regard to the rights and powers of the domiciliary receiver, as provided in this act. L.1975, c. 113, s. 13, eff. June 3, 1975.

N.J. Stat. § 17:30C-14 Conservation or ancillary receivership--alien insurers

An order to conserve the assets of an alien insurer shall direct the commissioner forthwith to take possession of the property of the insurer within this State and to conserve it, subject to the further direction of the court. L.1975, c. 113, s. 14, eff. June 3, 1975.

N.J. Stat. § 17:30C-15 Conduct of delinquency proceedings--domestic insurers

a. Whenever under the laws of this State a receiver is to be appointed in delinquency proceedings for a domestic insurer, the court shall appoint the commissioner as such receiver. The court shall direct the commissioner forthwith to take possession of the assets of the insurer and to administer the same under the orders of the court. b. As domiciliary receiver, the commissioner shall be vested by operation of law, with the title to all property, contracts, and rights of action, and all of the books and records of the insurer wherever located, as of the date of entry of the order directing him to rehabilitate or liquidate a domestic insurer and he shall have the right to recover the same and reduce the same to his possession. c. The filing or recording of the order, directing possession to be taken, or a certified copy thereof, in the office where instruments affecting title to property are required to be filed or recorded, shall impart the same notice as would be imparted by a deed, bill of sale, or other evidence of the title duly filed or recorded. d. The commissioner, as domiciliary receiver, shall be responsible on his official bond for the proper administration of all assets coming into his possession or control. The court may at any time require an additional bond from him or his deputies, if deemed desirable for the protection of the assets. e. Upon taking possession of the assets of an insurer, the domiciliary receiver shall, subject to the direction of the court, immediately proceed to conduct the business of the insurer or to take such steps as are authorized by the laws of this State for the purpose of liquidating, rehabilitating, reorganizing, or conserving the affairs of the insurer. L.1975, c. 113, s. 15, eff. June 3, 1975.

N.J. Stat. § 17:30C-16 Conduct of delinquency proceedings--foreign and alien insurers

a. Whenever under this act an ancillary receiver is to be appointed in delinquency proceedings for an insurer not domiciled in this State, the court shall appoint the commissioner as ancillary receiver. The commissioner shall file a petition requesting the appointment on the grounds set forth in section 13 b. of this act: (1) If he finds that there are sufficient assets of the insurer located in this State to justify the appointment of an ancillary receiver; or (2) If 10 or more persons resident in this State having claims against such insurer file a petition with the commissioner requesting the appointment of such ancillary receiver. b. The domiciliary receiver for the purpose of liquidating an insurer domiciled in a reciprocal state shall be vested by operation of law with the title to all of the property, contracts and rights of action, and all of the books and records of the insurer located in this State, and he shall have the immediate right to recover balances due from local agents and to obtain possession of any books and records of the insurer found in this State. He shall also be entitled to recover the other assets of the insurer located in this State, except that upon the appointment of an ancillary receiver in this State, the ancillary receiver shall during the ancillary receivership proceedings have the sole right to recover such other assets. The ancillary receiver shall, as soon as practicable, liquidate from their respective securities those special deposit claims and secured claims which are proved and allowed in the ancillary proceedings in this State, and shall pay the necessary expenses of the proceedings. All remaining assets he shall promptly transfer to the domiciliary receiver. Subject to the foregoing provisions, the ancillary receiver and his deputies shall have the same powers and be subject to the same duties with respect to the administration of such assets as a receiver of an insurer domiciled in this State. c. The domiciliary receiver of an insurer domiciled in a reciprocal state may sue in this State to recover any assets of such insurer to which he may be entitled under the laws of this State. L.1975, c. 113, s. 16, eff. June 3, 1975.

N.J. Stat. § 17:30C-17 Deputies and assistants

In connection with delinquency proceedings, the commissioner may appoint one or more special deputy commissioners to act for him, and may employ such counsel, clerks, and assistants as he deems necessary. The compensation of the special deputies, counsel, clerks, or assistants, and all expenses of taking possession of the insurer and of conducting the proceedings, shall be fixed by the receiver subject to the approval of the court, and shall be paid out of funds or assets of the insurer. Within the limits of the duties imposed upon them, special deputies shall possess all the powers given to, and, in the exercise of those powers, shall be subject to all of the duties imposed upon the receiver with respect to such proceedings. L.1975, c. 113, s. 17, eff. June 3, 1975.

N.J. Stat. § 17:30C-18 Claims of nonresidents against domestic insurers

a. In a delinquency proceeding begun in this State against a domestic insurer, claimants residing in reciprocal states may file claims either with the ancillary receivers, if any, in their respective states or with the domiciliary receiver. All such claims must be filed on or before the last date fixed for the filing of claims in domiciliary delinquency proceedings. b. Controverted claims belonging to claimants residing in reciprocal states may either: (1) Be proved in this State; or (2) If ancillary proceedings have been commenced in such reciprocal states, may be proved in those proceedings. In the event a claimant elects to prove his claim in ancillary proceedings, if notice of the claim and opportunity to appear and be heard is afforded the domiciliary receiver of this State, as provided in section 19 of this act with respect to ancillary proceedings in this State, the final allowance of such claim by the courts in the ancillary state shall be accepted in this State as conclusive as to its amount and shall also be accepted as conclusive as to its priority, if any, against special deposits or other security located within the ancillary state. L.1975, c. 113, s. 18, eff. June 3, 1975.

N.J. Stat. § 17:30C-19 Claims against foreign insurers

a. In a delinquency proceeding in a reciprocal state against an insurer domiciled in that state, claimants against such insurer who reside within this State may file claims either with the ancillary receiver, if any, appointed in this State, or with the domiciliary receiver. All such claims must be filed on or before the last date fixed for the filing of claims in the domiciliary delinquency proceedings: b. Controverted claims belonging to claimants residing in this State may either: (1) Be proved in the domiciliary state as provided by the law of that state; or (2) If ancillary proceedings have been commenced in this State, be proved in those proceedings. In the event that any such claimant elects to prove his claim in this State, he shall file his claim with the ancillary receiver and shall give notice in writing to the receiver in the domiciliary state, either by registered mail or by personal service at least 40 days prior to the date set for hearing. The notice shall contain a concise statement of the amount of the claim, the facts on which the claim is based, and the priorities asserted, if any. If the domiciliary receiver within 30 days after the giving of such notice shall give notice in writing to the ancillary receiver and to the claimant, either by registered mail or by personal service of his intention to contest such claim, he shall be entitled to appear or to be represented in any proceeding in this State involving adjudication of the claim. The final allowance of the claim by the courts of this State shall be accepted as conclusive as to its amount and shall also be accepted as conclusive as to its priority if any, against special deposits or other security located within this State. L.1975, c. 113, s. 19, eff. June 3, 1975.

N.J. Stat. § 17:30C-20 Form of claim--notice--hearing

a. All claims against an insurer against which delinquency proceedings have been begun shall set forth in reasonable detail the amount of the claim, or the basis upon which such amount can be ascertained, the facts upon which the claim is based, and the priorities asserted, if any. All such claims shall be verified by the affidavit of the claimant, or someone authorized to act on his behalf and having knowledge of the facts, and shall be supported by such documents as may be material thereto. b. All claims filed in this State shall be filed with the receiver, whether domiciliary or ancillary, in this State, on or before the last date for filing as specified in this act. c. Within 10 days of the receipt of any claim, or within such further period as the court may fix, the receiver shall report the claim to the court, specifying in such report his recommendation with respect to the action to be taken thereon. Upon receipt of such report, the court shall fix a time for hearing the claim and shall direct that the claimant or the receiver, as the court shall specify, shall give such notice as the court shall determine to such persons as shall appear to the court to be interested therein. All such notices shall specify the time and place of the hearing and shall concisely state the amount and nature of the claim, the priorities asserted, if any, and the recommendation of the receiver with reference thereto. d. At the hearing all persons interested shall be entitled to appear and the court shall enter an order allowing, allowing in part, or disallowing the claim. Any such order shall be deemed to be an appealable order. L.1975, c. 113, s. 20, eff. June 3, 1975.

N.J. Stat. § 17:30C-21 Priority of certain claims

a. In a delinquency proceeding against an insurer domiciled in this State, claims owing to residents of ancillary states shall be preferred claims if like claims are preferred under the laws of this State. All such claims owing to residents or nonresidents shall be given equal priority of payment from general assets regardless of where such assets are located. b. In a delinquency proceeding against an insurer domiciled in a reciprocal state, claims owing to residents of this State shall be preferred claims if like claims are preferred by the laws of that state. c. The owners of special deposit claims against an insurer for which a receiver is appointed in this or any other state shall be given priority against their several special deposits in accordance with the provisions of the statutes governing the creation and maintenance of such deposits. If there is a deficiency in any such deposit so that the claims secured thereby are not fully discharged therefrom, the claimants may share in the general assets, but such sharing shall be deferred until general creditors, and also claimants against other special deposits who have received smaller percentages from their respective special deposits, have been paid percentages of their claims equal to the percentage paid from a special deposit. d. The owner of a secured claim against an insurer for which a receiver has been appointed in this or any other state may surrender his security and file his claim as a general credit, or the claim may be discharged by resort to the security, in which case the deficiency, if any, shall be treated as a claim against the general assets of the insurer on the same basis as claims of unsecured creditors. If the amount of the deficiency has been adjudicated in ancillary proceedings as provided in this act, or if it has been adjudicated by a court of competent jurisdiction in proceedings in which the domiciliary receiver has had notice and opportunity to be heard, such amounts shall be conclusive; otherwise the amount shall be determined in the delinquency proceeding in the domiciliary state. L.1975, c. 113, s. 21, eff. June 3, 1975.

N.J. Stat. § 17:30C-22 Attachment and garnishment of assets

During the pendency of delinquency proceedings in this or any reciprocal state, no action or proceeding in the nature of an attachment, garnishment or execution shall be commenced or maintained in the courts of this State against the delinquent insurer or its assets. Any lien obtained by any such action or proceeding within 4 months prior to the commencement of any such delinquency proceeding or at any time thereafter shall be void as against any rights arising in such delinquency proceeding. L.1975, c. 113, s. 22, eff. June 3, 1975.

N.J. Stat. § 17:30C-23 Uniform insurers liquidation act

a. Subsections b. through k. of section 1, subsections a. and c. of section 4, together with sections 5 and 15 through 23 constitute and may be referred to as the Uniform Insurers Liquidation Act. b. The Uniform Insurers Liquidation Act shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states that enact it. To the extent that its provisions when applicable conflict with other provisions of this act, the provisions of such act shall control. L.1975, c. 113, s. 23, eff. June 3, 1975.

N.J. Stat. § 17:30C-24 Borrowing on pledge of assets

For the purpose of facilitating the rehabilitation, liquidations, conservation or dissolution of an insurer pursuant to this act, the commissioner may, subject to the approval of the court, borrow money and execute, acknowledge and deliver notes or other evidences of indebtedness therefor, and secure the payment of the same by the mortgage, pledge, assignment, transfer in trust or hypothecation of any or all of the property of such insurer, whether real, personal or mixed, and the commissioner, subject to the approval of the court, shall have power to take any and all other action necessary and proper to consummate any such loans and to provide for the repayment thereof. The commissioner shall be under no obligation personally or in his official capacity as commissioner to repay any loan made pursuant to this act. L.1975, c. 113, s. 24, eff. June 3, 1975.

N.J. Stat. § 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.

N.J. Stat. § 17:30C-26 Priority of claims for compensation

a. Compensation actually owing to employees other than officers of an insurer, for services rendered within 3 months prior to the commencement of a proceeding against the insurer under this act, but not exceeding $1,000.00 for each such employee, shall be paid prior to the payment of any other debt or claim, and in the discretion of the commissioner, may be paid as soon as practicable after the proceeding has been commenced; except, that at all times the commissioner shall reserve such funds as will, in his opinion, be sufficient for the expenses of administration. b. Such priority shall be in lieu of any other similar priority which may be authorized by law as to the wages or compensation of such employees. c. The priorities of distribution in a liquidation proceeding shall be in the following order: (1) Expenses of administration; (2) Compensation of employees as provided in subsection (a) of this section; (3) Claims for taxes and debts due to Federal or any state or local government which are secured by liens perfected prior to the commencement of delinquency proceedings; (4) Claims by policyholders, beneficiaries and insurers arising from and within the coverage of and not in excess of the applicable limits of insurance policies and insurance contracts issued by the company and liability claims against insurers which claims are within the coverage of and not in excess of the applicable limits of insurance policies and insurance contracts issued by the company and claims presented by the New Jersey Property-Liability Insurance Guaranty Association and claims presented by any similar organization in another state. (5) All other claims. L.1975, c. 113, s. 26, eff. June 3, 1975. Amended by L.1979, c. 470, s. 1, eff. Feb. 27, 1980.

N.J. Stat. § 17:30C-27 Offsets

a. In all cases of mutual debts or mutual credits between the insurer and another person in connection with any action or proceeding under this act, such credits and debts shall be set off and the balance only shall be allowed or paid, except as provided in subsection b. below. b. No offset shall be allowed in favor of any such person where (1) The obligation of the insurer to such person would not at the date of the entry of any liquidation order, or at such other date determined by the court for fixing the rights and liabilities with respect to the estate of the insurer, have entitled him to share as a claimant in the assets of the insurer; or (2) The obligation of the insurer to such person was purchased by or transferred to such person with a view of its being used as an offset; or (3) The obligation of such person is to pay a balance upon a subscription to the capital stock of a stock insurer. L.1975, c. 113, s. 27, eff. June 3, 1975.

N.J. Stat. § 17:30C-28 Allowance of certain claims

a. No contingent claim shall share in a distribution of the assets of an insurer which has been adjudicated to be insolvent by an order made pursuant to section 30 a., except that such claims shall be considered, if properly presented, and may be allowed to share where (1) Such claim becomes absolute against the insurer on or before the last day fixed for filing of proofs of claim against the assets of such insurer; or (2) There is a surplus and the liquidation is thereafter conducted upon the basis that such insurer is solvent. b. Where an insurer has been so adjudicated to be insolvent, any person who has a cause of action against an insured of such insurer, shall have the right to file a claim in the liquidation proceeding, regardless of the fact that such claim may be contingent, and such claim may be allowed (1) If it may be reasonably inferred from the proof presented upon such claim that such person would be able to obtain a judgment upon such cause of action against such insured; and (2) If such person shall furnish suitable proof, unless the court, for good cause shown, shall otherwise direct, that no further valid claims against such insurer arising out of his cause of action, other than those already presented, can be made; and (3) If the total liability of such insurer to all claimants arising out of the same act of its insured shall be no greater than its maximum liability would be, were it not in liquidation. c. No judgment against such an insured, taken after the date of the entry of the liquidated order, shall be considered in the liquidation proceedings as evidence of liability, or of the amount of damages, and no judgment against an insured taken by default, inquest or by collusion prior to the entry of the liquidation order, shall be considered as conclusive evidence in the liquidation proceeding, either of the liability of such insured to such person upon such cause of action, or of the amount of damage to which such person is therein entitled. L.1975, c. 113, s. 28, eff. June 3, 1975.

N.J. Stat. § 17:30C-29 Allowance of secured claims

No claim of any secured claimant shall be allowed at a sum greater than the difference between the value of the claim without security and the value of the security itself as of the date of the entry of the order of liquidation, or such other date set by the court for fixation of rights and liabilities, unless the claimant shall surrender his security to the commissioner, in which event the claim shall be allowed in the full amount for which it is valued. L.1975, c. 113, s. 29, June 3, 1975.

N.J. Stat. § 17:30C-30 Time to file the claims

a. If upon the granting of an order of liquidation under this act, or at any time thereafter during the liquidation proceeding, the insurer shall not be clearly solvent, the court shall, after such notice and hearing as it deems proper, make an order declaring the insurer to be insolvent. Thereupon, regardless of any prior notice which may have been given to creditors, the commissioner shall notify all persons who may have claims against such insurer and who have not filed proper proofs thereof, to present the same to him, at a place specified in such notice, within 4 months from the date of the entry of such order, of, if the commissioner shall certify that it is necessary, within such longer time as the court shall prescribe. The last day for the filing of proofs of claims shall be specified in the notice. Such notice shall be given in a manner determined by the court. b. Proofs of claim may be filed subsequent to the date specified, but no such claim shall share in the distribution of the assets until all allowed claims, proofs of which have been filed before said date, have been paid in full, with interest. L.1975, c. 113, s. 30, eff. June 3, 1975.

N.J. Stat. § 17:30C-31 Proposal for disbursement of assets of insolvent companies; application for approval; notice of application

a. Within 120 days of a final determination of insolvency of a company by a court of competent jurisdiction of this State, the commissioner shall make application to the court for approval of a proposal to disburse assets out of such company's marshaled assets, from time to time as such assets become available, to the New Jersey Property-Liability Insurance Guaranty Association and to any similar organization in another state having substantially the same provision of law. b. Such proposals shall at least include provision for: (1) Reserving amounts for the payment of the expenses of administration and the claims falling within priorities established in section 26 of the act to which this act is amendatory. (2) Disbursement of the assets marshaled to date and subsequent disbursements of assets as they become available. (3) Equitable allocation of disbursements to the New Jersey Property-Liability Guaranty Association and similar associations established in other states which are entitled thereto; and (4) The securing by the receiver from each of such associations entitled to disbursements pursuant to this section of an agreement to return to the receiver such assets previously disbursed as may be required to pay claims of secured creditors and claims falling within the priorities established in section 26 of P.L.1975, c. 113 (C. 17:30C-26), in accordance with such priorities. No bonds shall be required of any such association. c. The receiver's proposal shall provide for disbursements to the associations in amounts at least equal to the payments made or to be made thereby for which such association could assert claims against the receiver and shall further provide that if the assets available for disbursement from time to time do not equal or exceed the amounts of such payments made or to be made by the associations then disbursements shall be in the amount of available assets. d. Notice of intention to apply for approval of a disbursement of assets shall be given to the associations in and to the commissioners of insurance of each of the states. Any such notice shall be deemed to have been given when deposited in the United States certified mails, first class postage fee paid, at least 30 days prior to submission of such application to the court. Action on the application may be taken by the court provided the above required notice has been given and provided further that the receiver's proposal complies with subsection (b)(1) and (b)(4) of this section. L.1979, c. 470, s. 2, eff. Feb. 27, 1980.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026

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