Substitute House Bill No. 5614
          Substitute House Bill No. 5614

              PUBLIC ACT NO. 98-214


AN  ACT CONCERNING THE INSURERS REHABILITATION AND
LIQUIDATION ACT.


    Be it enacted  by  the  Senate  and  House  of
Representatives in General Assembly convened:
    Section  1. Section  38a-903  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    Sections  38a-903 to  38a-961,  inclusive,  AS
AMENDED,   may   be   cited   as   the   "Insurers
Rehabilitation and Liquidation Act". Said sections
shall  not be  interpreted  to  limit  the  powers
granted the commissioner  by  other  provisions of
the law. Sections  38a-903  to 38a-961, inclusive,
AS AMENDED, shall  be  construed  to  effect their
purpose which is  the  protection of the interests
of insureds, claimants,  creditors  and the public
generally,  with  minimum  interference  with  the
normal prerogatives of  the owners and managers of
insurers, through:
    (1)  Early  detection   of   any   potentially
dangerous  condition  in  an  insurer  and  prompt
application of appropriate corrective measures;
    (2)   Improved  methods   for   rehabilitating
insurers, involving the cooperation and management
expertise of the insurance industry;
    (3)  Enhanced  efficiency   and   economy   of
liquidation, through clarification  of the law, to
minimize legal uncertainty and litigation;
    (4) Equitable apportionment of any unavoidable
loss;
    (5)  Reducing  the   problems   of  interstate
rehabilitation  and  liquidation  by  facilitating
cooperation  between states  in  [the  liquidation
process] DELINQUENCY PROCEEDINGS  and by extending
the scope of personal jurisdiction over debtors of
the insurer outside this state;
    (6) Regulation of  the  BUSINESS  OF insurance
[business] by the  impact  of  the law relating to
delinquency  procedures  and  RELATED  substantive
rules; [on the entire insurance business;] and
    (7) Providing for  a  comprehensive scheme for
the rehabilitation and  liquidation  of  insurance
companies and those subject to sections 38a-903 to
38a-961, inclusive, AS  AMENDED,  as  part  of the
regulation  of  the   business   of  insurance  [,
insurance industry and  insurers]  in  the  state.
Proceedings in cases  of  insurer  insolvency  and
delinquency are deemed  an  integral aspect of the
business of insurance  and  are  of  vital  public
interest and concern.
    Sec.  2.  Section   38a-904   of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [The  proceedings  authorized   by   sections]
SECTIONS  38a-903  to   38a-961,   inclusive,   AS
AMENDED, shall apply  to: (1) All insurers who are
doing, or have done, an insurance business in this
state and against  whom  claims  arising from that
business may exist  now  or in the future, AND ALL
PERSONS   SUBJECT   TO    EXAMINATION    BY    THE
COMMISSIONER; (2) all  insurers  who purport to do
an  insurance business  in  this  state;  (3)  all
insurers who have insureds resident in this state;
(4) all other persons organized OR DOING INSURANCE
BUSINESS, or in the process of organizing with the
intent to do  an insurance business in this state;
(5) all nonprofit  service plans and all fraternal
benefit  societies;  (6)   all   title   insurance
companies; and (7) all health care centers.
    Sec.  3.  Section   38a-905   of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    For  the  purposes   of  sections  38a-903  to
38a-961, inclusive, AS AMENDED:
    [(a)] (1) "Ancillary  state"  means  any state
other than a domiciliary state.
    [(b)] (2) "Commissioner"  means  the Insurance
Commissioner.
    (3) "COMMODITY CONTRACT" MEANS: (A) A CONTRACT
FOR THE PURCHASE OR SALE OF A COMMODITY FOR FUTURE
DELIVERY ON, OR  SUBJECT  TO THE RULES OF, A BOARD
OF TRADE DESIGNATED  AS  A  CONTRACT MARKET BY THE
COMMODITY  FUTURES TRADING  COMMISSION  UNDER  THE
COMMODITY EXCHANGE ACT (7 USC 1, ET SEQ.) OR BOARD
OF  TRADE  OUTSIDE   THE  UNITED  STATES;  (B)  AN
AGREEMENT  THAT IS  SUBJECT  TO  REGULATION  UNDER
SECTION 19 OF THE COMMODITY EXCHANGE ACT (7 USC 1,
ET  SEQ.)  AND  THAT  IS  COMMONLY  KNOWN  TO  THE
COMMODITIES  TRADE AS  A  MARGIN  ACCOUNT,  MARGIN
CONTRACT, LEVERAGE ACCOUNT  OR  LEVERAGE CONTRACT;
OR (C) AN AGREEMENT OR TRANSACTION THAT IS SUBJECT
TO REGULATION UNDER SECTION 4c(b) OF THE COMMODITY
EXCHANGE  ACT (7  USC  1  ET  SEQ.)  AND  THAT  IS
COMMONLY  KNOWN TO  THE  COMMODITIES  TRADE  AS  A
COMMODITY OPTION.
    [(c)] (4) "Creditor"  is  a  person having any
claim, whether matured or unmatured, liquidated or
unliquidated,  secured  or   unsecured,  absolute,
fixed or contingent.
    [(d)] (5) "Delinquency  proceeding"  means any
proceeding instituted against  an  insurer for the
purpose     of    liquidating,     rehabilitating,
reorganizing or conserving  such  insurer, and any
summary proceeding under  section 38a-912. "Formal
delinquency proceeding" means  any  liquidation or
rehabilitation proceeding.
    [(e)] (6) "Doing  business",  "DOING INSURANCE
BUSINESS"  AND  THE   "BUSINESS   OF   INSURANCE",
includes  any  of   the  following  acts,  whether
effected  by mail  or  otherwise:  [(1)]  (A)  The
issuance or delivery  of  contracts  of insurance,
EITHER to persons  resident  IN OR COVERING A RISK
LOCATED in this  state; [(2)] (B) the solicitation
of  applications  for   such  contracts  or  other
negotiations preliminary to  the execution of such
contracts; [(3)] (C)  the  collection of premiums,
membership    fees,    assessments     or    other
consideration for such  contracts;  [(4)]  (D) the
transaction of matters  subsequent to execution of
such contracts and  arising  out of them; or [(5)]
(E) operating under  a  license  or certificate of
authority, as an  insurer, issued by the Insurance
Department.
    [(f)] (7) "Domiciliary  state" means the state
in which an  insurer is incorporated or organized,
or, in the  case of an alien insurer, its state of
entry.
    [(g)] (8) "Fair  consideration"  is  given for
property or obligation: [(1)] (A) When in exchange
for  such  property   or  obligation,  as  a  fair
equivalent therefor, and  in  good faith, property
is  conveyed  or   services  are  rendered  or  an
obligation is incurred  or  an  antecedent debt is
satisfied; or [(2)]  (B)  when  such  property  or
obligation is received  in  good faith to secure a
present advance or  antecedent  debt  in an amount
not disproportionately small  as  compared  to the
value of the property or obligation obtained.
    [(h)] (9) "Foreign  country"  has  the meaning
assigned to it in section 38a-1.
    (10)  "FORWARD  CONTRACT"  MEANS  A  CONTRACT,
OTHER THAN A COMMODITY CONTRACT, FOR THE PURCHASE,
SALE OR TRANSFER  OF  A  COMMODITY,  AS DEFINED IN
SECTION 1 OF  THE  COMMODITY EXCHANGE ACT (7 USC 1
ET SEQ.), OR  ANY  SIMILAR GOOD, ARTICLE, SERVICE,
RIGHT OR INTEREST  THAT  IS  PRESENTLY  OR  IN THE
FUTURE  BECOMES THE  SUBJECT  OF  DEALING  IN  THE
FORWARD CONTRACT TRADE,  OR  PRODUCT OR BY-PRODUCT
THEREOF, WITH A  MATURITY  DATE MORE THAN TWO DAYS
AFTER  THE DATE  THE  CONTRACT  IS  ENTERED  INTO,
INCLUDING,  BUT  NOT   LIMITED  TO,  A  REPURCHASE
TRANSACTION,   REVERSE   REPURCHASE   TRANSACTION,
UNALLOCATED  HEDGE  TRANSACTION,   DEPOSIT,  LOAN,
OPTION, ALLOCATED TRANSACTION  OR A COMBINATION OF
THESE OR OPTION ON ANY OF THEM.
    [(i)] (11) "General  assets"  [means] INCLUDES
all property, real,  personal  or  otherwise,  not
specifically  mortgaged,  pledged,   deposited  or
otherwise encumbered for  the  security or benefit
of specified persons  or classes of persons. As to
specifically encumbered property, "general assets"
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 on deposit  for the security or benefit of all
policyholders or all  policyholders and creditors,
in more than  a  single state, shall be treated as
general assets.
    [(j)] (12) "Guaranty  association"  means  the
Connecticut    Insurance   Guaranty    Association
established  pursuant  to   sections   38a-836  to
38a-853,  inclusive,  the   Connecticut  Life  and
Health Insurance Guaranty  Association established
pursuant   to   sections   38a-858   to   38a-875,
inclusive, and any  other  similar  entity [now or
hereafter] created by  the  [legislature  of  this
state] GENERAL ASSEMBLY  for the payment of claims
of   insolvent   insurers.    "Foreign    guaranty
association" means any  similar  entities  [now in
existence  in  or   hereafter]   created   by  the
legislature of any other state.
    [(k)] (13) "Insolvency"  and  "insolvent" have
the meanings assigned to them in section 38a-1, AS
AMENDED BY THIS ACT.
    [(l)] (14) "Insurer"  means any person who has
done, purports to  do,  is doing or is licensed to
do an insurance  business,  and  is  or  has  been
subject to the  authority  of,  or to liquidation,
rehabilitation,  reorganization,  supervision   or
conservation by, any  insurance  commissioner. For
purposes   of   sections   38a-903   to   38a-961,
inclusive, AS AMENDED,  any other persons included
under section 38a-904,  AS  AMENDED  BY  THIS ACT,
shall be deemed to be insurers.
    (15) "NETTING AGREEMENT"  MEANS  A CONTRACT OR
AGREEMENT,   INCLUDING   TERMS    AND   CONDITIONS
INCORPORATED  BY REFERENCE  THEREIN,  INCLUDING  A
MASTER AGREEMENT, WHICH MASTER AGREEMENT, TOGETHER
WITH ALL SCHEDULES, CONFIRMATIONS, DEFINITIONS AND
ADDENDA  THERETO  AND   TRANSACTIONS   UNDER   ANY
THEREOF,  SHALL  BE   TREATED   AS   ONE   NETTING
AGREEMENT,  THAT  (A)   DOCUMENTS   ONE   OR  MORE
TRANSACTIONS BETWEEN THE  PARTIES TO THE AGREEMENT
FOR OR INVOLVING  ONE  OR MORE QUALIFIED FINANCIAL
CONTRACTS AND (B)  PROVIDES  FOR  THE  NETTING  OR
LIQUIDATION OF QUALIFIED  FINANCIAL  CONTRACTS  OR
PRESENT OR FUTURE  PAYMENT  OBLIGATIONS OR PAYMENT
ENTITLEMENTS THEREUNDER, INCLUDING  LIQUIDATION OR
CLOSE-OUT VALUES RELATING  TO  SUCH OBLIGATIONS OR
ENTITLEMENTS, AMONG THE  PARTIES  TO  THE  NETTING
AGREEMENT.
    [(m)] (16) "Preferred  claim"  means any claim
with  respect  to  which  the  terms  of  sections
38a-903 to 38a-961,  inclusive, AS AMENDED, accord
priority of payment from the general assets of the
insurer.
    (17) "QUALIFIED FINANCIAL  CONTRACT"  MEANS  A
COMMODITY CONTRACT, FORWARD  CONTRACT,  REPURCHASE
AGREEMENT, SECURITIES CONTRACT, SWAP AGREEMENT AND
ANY  SIMILAR  AGREEMENT   THAT   THE  COMMISSIONER
DETERMINES TO BE  A  QUALIFIED  FINANCIAL CONTRACT
FOR THE PURPOSES  OF THIS CHAPTER, AND SECTIONS 7,
15 AND 22 OF THIS ACT.
    [(n)]   (18)   "Receiver"    means   receiver,
liquidator, rehabilitator or  conservator  as  the
context requires.
    [(o)] (19) "Reciprocal  state" means any state
other than this  state  in  which in substance and
effect sections 38a-920,  AS  AMENDED BY THIS ACT,
38a-954,   38a-955   and   38a-957   to   38a-959,
inclusive, are in  force  and  in which provisions
are in force,  requiring  that the commissioner or
equivalent  official  be   the   receiver   of   a
delinquent insurer and  in  which  some  provision
exists for the avoidance of fraudulent conveyances
and preferential transfers.
    (20)  "REPURCHASE  AGREEMENT"   AND   "REVERSE
REPURCHASE AGREEMENT" MEAN AN AGREEMENT, INCLUDING
RELATED TERMS, THAT  PROVIDES  FOR THE TRANSFER OF
CERTIFICATES   OF   DEPOSIT,   ELIGIBLE   BANKERS'
ACCEPTANCES,  OR  SECURITIES   THAT   ARE   DIRECT
OBLIGATIONS OF, OR THAT ARE FULLY GUARANTEED AS TO
PRINCIPAL AND INTEREST BY, THE UNITED STATES OR AN
AGENCY OF THE  UNITED  STATES AGAINST THE TRANSFER
OF FUNDS BY  THE TRANSFEREE OF THE CERTIFICATES OF
DEPOSIT,   ELIGIBLE   BANKERS'    ACCEPTANCES   OR
SECURITIES WITH A  SIMULTANEOUS  AGREEMENT  BY THE
TRANSFEREE   TO   TRANSFER   TO   THE   TRANSFEROR
CERTIFICATES   OF   DEPOSIT,   ELIGIBLE   BANKERS'
ACCEPTANCES OR SECURITIES  AS  DESCRIBED  IN  THIS
SUBDIVISION, AT A  DATE CERTAIN NOT LATER THAN ONE
YEAR AFTER THE TRANSFERS OR ON DEMAND, AGAINST THE
TRANSFER  OF  FUNDS.  FOR  THE  PURPOSES  OF  THIS
SUBDIVISION, THE ITEMS  THAT  MAY BE SUBJECT TO AN
AGREEMENT INCLUDE MORTGAGE-RELATED  SECURITIES,  A
MORTGAGE LOAN, AND AN INTEREST IN A MORTGAGE LOAN,
AND  SHALL NOT  INCLUDE  ANY  PARTICIPATION  IN  A
COMMERCIAL MORTGAGE LOAN,  UNLESS THE COMMISSIONER
DETERMINES TO INCLUDE THE PARTICIPATION WITHIN THE
MEANING OF THE TERM.
    [(p)] (21) "Secured  claim"  means  any  claim
secured by [mortgage,  trust deed, pledge, deposit
as  security,  escrow,   or   otherwise,  but  not
including special deposit claims or claims against
general  assets. The  term  also  includes  claims
which have become  liens  upon  specific assets by
reason of judicial process] AN ASSET THAT IS NOT A
GENERAL  ASSET.  "SECURED   CLAIM"  ALSO  INCLUDES
CLAIMS  WHICH  HAVE  BECOME  LIENS  UPON  SPECIFIC
ASSETS BY REASON OF JUDICIAL PROCESS PRIOR TO FOUR
MONTHS  BEFORE  THE  COMMENCEMENT  OF  DELINQUENCY
PROCEEDINGS. "SECURED CLAIM"  DOES  NOT  INCLUDE A
SPECIAL DEPOSIT CLAIM  OR  A  CLAIM ARISING FROM A
CONSTRUCTIVE OR RESULTING TRUST.
    (22) "SECURITIES CONTRACT"  MEANS  A  CONTRACT
FOR THE PURCHASE,  SALE  OR  LOAN  OF  A SECURITY,
INCLUDING AN OPTION  FOR THE REPURCHASE OR SALE OF
A SECURITY, CERTIFICATE  OF  DEPOSIT,  OR GROUP OR
INDEX OF SECURITIES, INCLUDING AN INTEREST THEREIN
OR  BASED ON  THE  VALUE  THEREOF,  OR  AN  OPTION
ENTERED INTO ON  A  NATIONAL  SECURITIES  EXCHANGE
RELATING TO FOREIGN  CURRENCIES,  OR THE GUARANTEE
OF A SETTLEMENT  OF  CASH OR SECURITIES BY OR TO A
SECURITIES CLEARING AGENCY.  FOR  THE  PURPOSES OF
THIS SUBDIVISION, "SECURITY"  INCLUDES  A MORTGAGE
LOAN, MORTGAGE-RELATED SECURITIES, AND AN INTEREST
IN ANY MORTGAGE LOAN OR MORTGAGE-RELATED SECURITY.
    [(q)] (23) "Special  deposit  claim" means any
claim secured by  a  deposit  made  pursuant  to A
STATE statute for  the  security  or  benefit of a
limited class or  classes of persons, but DOES not
[including] INCLUDE any  claim  secured by general
assets.
    [(r)] (24) "State"  means  any state, district
or territory of the United States.
    (25)  "SWAP  AGREEMENT"  MEANS  AN  AGREEMENT,
INCLUDING THE TERMS AND CONDITIONS INCORPORATED BY
REFERENCE IN AN  AGREEMENT,  THAT  IS  A RATE SWAP
AGREEMENT,  BASIS SWAP,  COMMODITY  SWAP,  FORWARD
RATE  AGREEMENT, INTEREST  RATE  FUTURE,  INTEREST
RATE OPTION, FORWARD  FOREIGN  EXCHANGE AGREEMENT,
SPOT  FOREIGN EXCHANGE  AGREEMENT,  CURRENCY  SWAP
AGREEMENT,  CROSS-CURRENCY  RATE  SWAP  AGREEMENT,
CURRENCY FUTURE, OR  CURRENCY  OPTION OR ANY OTHER
SIMILAR AGREEMENT, AND INCLUDES ANY COMBINATION OF
AGREEMENTS  AND  AN   OPTION   TO  ENTER  INTO  AN
AGREEMENT.
    [(s)] (26) "Transfer" [shall include] INCLUDES
the  sale and  every  other  and  different  mode,
direct or indirect,  of disposing of or of parting
with property or with an interest therein, or with
the possession thereof  or  of  fixing a lien upon
property or upon  an  interest therein, absolutely
or  conditionally,  voluntarily,   by  or  without
judicial proceedings. The  retention of a security
title to property  delivered  to a debtor shall be
deemed a transfer suffered by the debtor.
    Sec.  4.  Section   38a-907   of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) [Any receiver  appointed  in  a proceeding
under sections 38a-903  to 38a-961, inclusive, may
at any time  apply  for  and  any court of general
jurisdiction may grant,  such  restraining orders,
preliminary and permanent  injunctions  and  other
orders as may  be  deemed  necessary and proper to
prevent: (1)] THE CONSERVATION, REHABILITATION AND
LIQUIDATION  OF  INSURANCE   COMPANIES  AND  OTHER
PERSONS  SUBJECT TO  THE  PROVISIONS  OF  SECTIONS
38a-903 TO 38a-961,  INCLUSIVE,  AS AMENDED, ARE A
MATTER OF VITAL  PUBLIC  INTEREST  AND  AFFECT THE
RELATIONSHIPS BETWEEN INSUREDS AND THEIR INSURERS.
    (1) AN APPLICATION  OR PETITION UNDER SECTIONS
38a-912, 38a-914, 38a-915,  38a-918,  38a-919  AND
38a-920, AS AMENDED  BY THIS ACT, SHALL OPERATE AS
AN AUTOMATIC STAY APPLICABLE TO ALL PERSONS, OTHER
THAN THE RECEIVER,  WHICH  SHALL  BE PERMANENT AND
SURVIVE THE ENTRY  OF  AN  ORDER  OF CONSERVATION,
REHABILITATION  OR LIQUIDATION,  AND  WHICH  SHALL
PROHIBIT: (A) The transaction of further business;
[(2)] (B) the  transfer  of  property;  [(3)]  (C)
interference  with  the   receiver   or   with   a
proceeding under said sections; [(4)] (D) waste of
the insurer's assets;  [(5)]  (E)  dissipation and
transfer  of  bank   accounts;   [(6)]   (F)   the
institution or further  prosecution of any actions
or proceedings IN  WHICH  THE  INSURER IS A PARTY;
[(7)] (G) the obtaining of preferences, judgments,
attachments, garnishments, or  liens  against  the
insurer, its assets  or  its  policyholders; [(8)]
(H) the levying  of execution against the insurer,
its assets, or  its  policyholders;  [(9)] (I) the
making of any sale or deed for nonpayment of taxes
or assessments that  would lessen the value of the
assets  of  the   insurer;   [or   (10)]  (J)  the
withholding from the  receiver of books, accounts,
documents,  or  other   records  relating  to  the
business of the  insurer;  or [(11)] (K) any other
threatened  or  contemplated   action  that  might
lessen  the  value  of  the  insurer's  assets  or
prejudice the rights  of policyholders, creditors,
or  shareholders, or  the  administration  of  any
proceeding under said sections.
    (2)  NOTWITHSTANDING ANY  OTHER  PROVISION  OF
LAW, NO BOND SHALL BE REQUIRED OF THE COMMISSIONER
AS  A  PREREQUISITE   FOR   THE  ISSUANCE  OF  ANY
INJUNCTION OR RESTRAINING  ORDER  PURSUANT TO THIS
SECTION.
    (3) UPON MOTION  OF  A  PERSON  SUBJECT TO THE
STAY, THE COURT,  AFTER NOTICE TO THE RECEIVER AND
A HEARING, MAY  MODIFY  OR  GRANT  RELIEF FROM THE
STAY, PROVIDED SAID  PERSON  SHALL HAVE THE BURDEN
OF  PROOF  AND   SHALL   ESTABLISH  BY  CLEAR  AND
CONVINCING EVIDENCE THAT  SUCH  RELIEF  SHOULD  BE
GRANTED.
    (4) ALL MATTERS  THAT  MAY BE STAYED, ENJOINED
OR  BARRED UNDER  THIS  SECTION  AND  ALL  MATTERS
INVOLVING ITS INTERPRETATION  OR  OPERATION  SHALL
REMAIN WITHIN THE  EXCLUSIVE  JURISDICTION  OF THE
DOMICILIARY RECEIVERSHIP COURT.
    (b)  The  receiver  may  apply  to  any  court
outside of the  state  for the relief described in
subsection (a) of this section.
    Sec.  5.  Section   38a-934   of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    The amount recoverable  by the liquidator from
reinsurers shall not be reduced as a result of the
delinquency   proceedings,   regardless   of   any
provision in the  reinsurance  contract  or  other
agreement. Payment made  directly to an insured or
other creditor shall  not diminish the reinsurer's
obligation to the insurer's estate except when (1)
the  reinsurance  contract  [provided  for  direct
coverage of a  named  insured  and the payment was
made in discharge of that obligation] PROVIDES FOR
PAYMENT OF THE  REINSURANCE  PROCEEDS  TO  ANOTHER
PAYEE,  (2)  THE   UNDERLYING   INSURANCE  POLICY,
INCLUDING ANY AMENDMENTS OR ENDORSEMENTS, PROVIDES
FOR THE ASSUMPTION  OF  THE  POLICY OBLIGATIONS BY
THE REINSURER, OR (3) THERE HAS BEEN A NOVATION OF
THE   UNDERLYING   POLICY   OBLIGATIONS   AND   AN
ASSUMPTION OF THOSE  OBLIGATIONS  BY THE REINSURER
AND THE PROCEEDS ARE PAYABLE TO ANOTHER PAYEE.
    Sec.  6.  Section   38a-911   of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    No insurer that  is subject to any delinquency
proceedings,     whether     formal,     informal,
administrative or judicial, shall:
    [(1) Be released from such proceedings, unless
such  proceeding  is  converted  into  a  judicial
rehabilitation or liquidation proceeding;]
    [(2)] (1) Be  permitted  to  solicit or accept
new business or  request or accept the restoration
of any suspended or revoked license or certificate
of authority;
    [(3)] (2) Be  returned  to  the control of its
shareholders or private management; or
    [(4)] (3) Have  any  of its assets returned to
the  control  of   its   shareholders  or  private
management until all  payments of or on account of
the  insurer's  contractual   obligations  by  all
guaranty  associations, along  with  all  expenses
thereof and interest  on  all  such  payments  and
expenses, shall have  been  repaid to the guaranty
associations or a plan of repayment by the insurer
shall  have  been   approved   by   the   guaranty
association.
    Sec. 7. (NEW)  (a)  All  records  or certified
copies thereof of  any  delinquent  insurer  which
come into the  possession  of the receiver and are
held  by  the   receiver  in  the  course  of  the
delinquency  proceedings  shall   be  received  in
evidence  in  all   cases  without  proof  of  the
correctness  of such  records  and  without  other
proof, except the certificate of the receiver that
such records were received from the custody of the
delinquent insurer or  found  among  its property.
For the purposes  of  this section, "record" means
books, records, documents and papers.
    (b) The receiver  shall  have the authority to
certify to the  correctness  of  any record of his
office and to  make  certificates  of the receiver
certifying to any  fact contained in such records.
Such records shall  be received in evidence in all
cases in which the original would be evidence.
    (c)  Original  records,  or  certified  copies
thereof, when offered by the receiver and received
in evidence shall  be  prima facie evidence of the
facts disclosed.
    (d)   The   appointment   of   the   Insurance
Commissioner as receiver shall not make records of
a delinquent insurer  subject  to disclosure under
the Freedom of  Information  Act,  as  defined  in
section 1-18a of the general statutes, as amended.
In the event  a third party successfully pursues a
records request in  the  receivership  court,  the
receiver shall be  reimbursed  for  the reasonable
cost of producing such records.
    Sec.  8.  Section   38a-913   of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    In  all  proceedings   and   judicial  reviews
thereof pursuant to  section  38a-912, all records
of the insurer,  other documents and all Insurance
Department files and  court records and papers, so
far as they pertain to or are a part of the record
of   the  proceedings,   shall   be   and   remain
confidential, AND ALL  PAPERS FILED WITH THE CLERK
OF THE SUPERIOR  COURT  SHALL BE HELD BY THE CLERK
IN A CONFIDENTIAL  FILE, except as is necessary to
obtain  compliance  [therewith]   WITH  ANY  ORDER
ENTERED  IN  CONNECTION   WITH  SUCH  PROCEEDINGS,
unless: [and until  the]  (1)  THE Superior Court,
after  hearing arguments  [from  the  parties]  in
chambers, [shall order]  ORDERS  otherwise;  [, or
unless] (2) the  insurer  requests that the matter
be made public;  [.  Until  such  court order, all
papers filed with  the clerk of the Superior Court
shall be held  by  him  in a confidential file] OR
(3) THE COMMISSIONER  APPLIES  FOR  AN ORDER UNDER
SECTION 38a-914 OR SECTION 38a-919.
    Sec.  9.  Section   38a-915   of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) An order to rehabilitate the business of a
domestic insurer, or an alien insurer domiciled in
this state, shall appoint the commissioner and his
successors in office  the  rehabilitator and shall
direct  the  rehabilitator   forthwith   to   take
possession of the  assets  of  the  insurer and to
administer them under  the  general supervision of
the court. THE  COMMISSIONER  SHALL BE ENTITLED TO
REQUEST THE ADMINISTRATIVE  JUDGE  OF THE SUPERIOR
COURT FOR THE  JUDICIAL  DISTRICT  OF HARTFORD-NEW
BRITAIN TO APPOINT A SINGLE JUDGE TO SUPERVISE THE
REHABILITATION AND HEAR ANY CASES OR CONTROVERSIES
ARISING OUT OF  OR  RELATED TO THE REHABILITATION.
REHABILITATION PROCEEDINGS SHALL  BE  EXEMPT  FROM
ANY DORMANCY OR  SIMILAR PROGRAM MAINTAINED BY THE
COURT FOR THE  EARLY CLOSURE OF CIVIL ACTIONS. The
filing or recording of the order with the clerk of
the Superior Court  or  recorder  of  deeds of the
judicial district in  which the principal business
of  the company  is  conducted,  or  the  judicial
district in which its principal office or place of
business is located,  shall impart the same notice
as a deed, bill of sale or other evidence of title
duly filed or recorded with that recorder of deeds
would have imparted. The order to rehabilitate the
insurer shall by  operation  of  law vest title to
all assets of the insurer in the rehabilitator.
    (b) Any order  issued under this section shall
require   accounting   to   the   court   by   the
rehabilitator.  Accountings  shall   be   at  such
intervals as the court specified in its order, but
no  less  frequently   than   semiannually.   Each
accounting shall include  a  report concerning the
rehabilitator's opinion as  to the likelihood that
a plan under subsection (e) of section 38a-916, AS
AMENDED BY THIS  ACT,  will  be  prepared  by  the
rehabilitator and the timetable for doing so.
    (c) Entry of  an order of rehabilitation shall
not  constitute  an  anticipatory  breach  of  any
contracts of the  insurer  nor shall it be grounds
for   retroactive   revocation    or   retroactive
cancellation  of  any  contracts  of  the  insurer
unless such revocation  or cancellation is done by
the rehabilitator pursuant  to section 38a-916, AS
AMENDED BY THIS ACT.
    (d) IN ORDER  TO  FACILITATE  THE  PROMPT  AND
FINAL RESOLUTION FOR  ALL  AFFECTED  BY  A PLAN OF
REHABILITATION,  ANY  APPEAL   FROM  AN  ORDER  OF
REHABILITATION OR AN  ORDER  APPROVING  A  PLAN OF
REHABILITATION  SHALL BE  HEARD  ON  AN  EXPEDITED
BASIS. A STAY  OF AN ORDER OF REHABILITATION OR AN
ORDER APPROVING A PLAN OF REHABILITATION SHALL NOT
BE GRANTED UNLESS  THE APPELLANT DEMONSTRATES THAT
EXTRAORDINARY CIRCUMSTANCES WARRANT  DELAYING  THE
RECOVERY UNDER THE  PLAN  OF REHABILITATION OF ALL
OTHER  PERSONS, INCLUDING  POLICYHOLDERS.  IF  THE
PLAN  PROVIDES  AN   APPROPRIATE   MECHANISM   FOR
ADJUSTMENT IN THE EVENT OF ANY ADVERSE RULING FROM
AN APPEAL, NO STAY SHALL BE GRANTED.
    Sec.  10.  Section   38a-916  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a)  The  commissioner  as  rehabilitator  may
appoint one or  more  special  deputies, who shall
have all the  powers  and  responsibilities of the
rehabilitator  granted  under  this  section,  and
NOTWITHSTANDING  ANY CONTRARY  PROVISION  OF  LAW,
INCLUDING CHAPTERS 55a  AND  67,  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  proceedings  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. The commissioner,  as rehabilitator,
may, with the  approval  of  the court, appoint an
advisory committee of  policyholders, claimants or
other  creditors including  guaranty  associations
should such a  committee  be  deemed necessary, [.
Such]  EXCEPT THAT  THE  DECISION  TO  APPOINT  AN
ADVISORY COMMITTEE SHALL BE AT THE SOLE DISCRETION
OF THE COMMISSIONER, AND THE committee shall serve
at the pleasure  of  the  commissioner  and  shall
serve  without  compensation   [other   than]  AND
WITHOUT reimbursement for  [reasonable  travel and
per diem living]  expenses.  No other committee of
any nature shall  be appointed by the commissioner
or  the  court   in   rehabilitation   proceedings
conducted  under  sections   38a-903  to  38a-961,
inclusive, AS AMENDED.
    (b) In the  event  that  the  property  of the
insurer 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
Insurance Department. Any  amounts so advanced for
expenses of administration  shall be repaid to the
commissioner for the  use  of [said] THE Insurance
Department out of the first available money of the
insurer.
    (c) The rehabilitator  may take such action as
he deems necessary  or  appropriate  to reform and
revitalize the insurer.  He  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  shall
have full power  to direct and manage, to hire and
discharge employees subject to any contract rights
they may have  and  to  deal with the property and
business of the insurer.
    (d) If it  appears  to  the rehabilitator that
there has been  criminal  or  tortious conduct, or
breach of any  contractual or fiduciary obligation
detrimental  to  the   insurer   by  any  officer,
manager, producer, employee  or  other  person, he
may  pursue  all  appropriate  legal  remedies  on
behalf of the insurer.
    (e)  If  the   rehabilitator  determines  that
reorganization,     consolidation,     conversion,
reinsurance, merger or other transformation of the
insurer is appropriate, he shall prepare a plan to
effect  such  changes.  Upon  application  of  the
rehabilitator for approval  of the plan, and after
such  notice  and   hearing   as   the  court  may
prescribe,  the  court   may   either  approve  or
disapprove the plan proposed, or may modify it and
approve it as  modified.  Any  plan approved under
this section shall  be,  in  the  judgment  of the
court,  fair  and   equitable   to   all   parties
concerned.   If  the   plan   is   approved,   the
rehabilitator shall carry  out  the  plan.  In the
case of a  life  insurer,  the  plan  proposed may
include the imposition  of liens upon the policies
of the company,  if all rights of shareholders are
first relinquished. A  plan for a life insurer may
also propose imposition  of a moratorium upon loan
and cash surrender rights under policies, for such
period and to such an extent as may be necessary.
    (f) The rehabilitator  shall  have  the  power
pursuant to sections  38a-928 and 38a-929 to avoid
fraudulent transfers, AND  MAY EXERCISE ANY OF THE
POWERS UNDER SECTION  38a-923,  AS AMENDED BY THIS
ACT, AS NECESSARY  OR  APPROPRIATE, EXCEPT THAT IN
THE CASE OF  A  LIFE INSURER, THE REHABILITATOR OF
SUCH AN INSURER  MAY,  AS PART OF A COURT APPROVED
PLAN OF REHABILITATION,  MODIFY OR RESTRUCTURE THE
POLICIES OR CONTRACTS  OF  INSURANCE. IN THE EVENT
THE   REHABILITATOR   PROPOSES    TO   MODIFY   OR
RESTRUCTURE   THE   POLICIES   OR   CONTRACTS   OF
INSURANCE,  THE  REHABILITATOR   MAY,   WITH   THE
CONCURRENCE  OF  THE  COURT,  APPROVE  PAYMENT  OF
CERTAIN EXPENSES INCURRED BY AN ADVISORY COMMITTEE
APPOINTED  PURSUANT  TO  SUBSECTION  (a)  OF  THIS
SECTION,  THE  EXPENSES   TO  BE  LIMITED  TO  THE
REASONABLE  AND  NECESSARY  EXPENSES  INCURRED  IN
OBTAINING AN EXPERT  EVALUATION OF THE EFFECT UPON
POLICYHOLDERS  OF  ANY  PROPOSED  MODIFICATION  OR
RESTRUCTURING   OF  POLICIES   OR   CONTRACTS   OF
INSURANCE.
    (g) THE ENUMERATION,  IN  THIS SECTION, OF THE
POWERS AND AUTHORITY  OF  THE  REHABILITATOR SHALL
NOT  BE  CONSTRUED   AS   A  LIMITATION  UPON  THE
REHABILITATOR, NOR SHALL  IT EXCLUDE IN ANY MANNER
THE  RIGHT  TO  DO  OTHER  ACTS  NOT  SPECIFICALLY
ENUMERATED OR OTHERWISE  PROVIDED  FOR,  AS MAY BE
NECESSARY OR APPROPRIATE FOR THE ACCOMPLISHMENT OF
OR IN THE AID OF THE PURPOSE OF REHABILITATION.
    Sec.  11.  Section   38a-920  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) An order  to  liquidate  the business of a
domestic insurer shall  appoint  the  commissioner
and his successors  in  office  AS  liquidator and
shall direct the  liquidator  [forthwith]  to take
possession of the  assets  of  the  insurer and to
administer them under  the  general supervision of
the court. THE  COMMISSIONER  SHALL BE ENTITLED TO
REQUEST THE ADMINISTRATIVE  JUDGE  OF THE SUPERIOR
COURT FOR THE  JUDICIAL  DISTRICT  OF HARTFORD-NEW
BRITAIN TO APPOINT A SINGLE JUDGE TO SUPERVISE THE
LIQUIDATION AND HEAR  ANY  CASES  OR CONTROVERSIES
ARISING OUT OF  OR  RELATED  TO  THE  LIQUIDATION.
LIQUIDATION PROCEEDINGS SHALL  BE  EXEMPT FROM ANY
DORMANCY  OR SIMILAR  PROGRAM  MAINTAINED  BY  THE
COURT FOR THE  EARLY CLOSURE OF CIVIL ACTIONS. The
liquidator 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   ordered   liquidated,
wherever located, as  of  the  entry  of the final
order of liquidation.  The  filing or recording of
the order with the clerk of the Superior Court and
with the recorder  of  deeds  of the town in which
its  principal office  or  place  of  business  is
located, or, in  the  case of real estate with the
recorder of deeds  of  the town where the property
is located, shall  impart  the  same  notice  as a
deed, bill of  sale,  or  other  evidence of title
duly filed or recorded with that recorder of deeds
would have imparted.
    (b) Upon issuance of the order, the rights and
liabilities  of  any   such  insurer  and  of  its
creditors,  policyholders,  shareholders,  members
and all other  persons  interested  in  its estate
shall become fixed  as of the date of entry of the
order  of  liquidation,   except  as  provided  in
sections 38a-921, AS  AMENDED  BY  THIS  ACT,  and
38a-939, AS AMENDED  BY THIS ACT, UNLESS OTHERWISE
FIXED BY THE SUPERIOR COURT.
    (c) An order  to  liquidate the business of an
alien insurer domiciled  in this state shall be in
the same terms  and  have the same legal effect as
an order to  liquidate  a domestic insurer, except
that the assets  and  the  business  in the United
States  shall be  the  only  assets  and  business
included therein.
    (d) At the time of petitioning for an order of
liquidation,  or  at   any  time  thereafter,  the
commissioner, after making appropriate findings of
an insurer's insolvency,  may  petition  the court
for a judicial  declaration  of  such  insolvency.
After providing such  notice  and  hearing  as  it
deems proper the court may make the declaration.
    (e) Any order  issued under this section shall
require THE LIQUIDATOR TO SUBMIT financial reports
to  the  court.  [by  the  liquidator.]  Financial
reports  shall  include,  [as]  AT  a  minimum,  A
STATEMENT OF the  assets  and  liabilities  of the
insurer and all funds received or disbursed by the
liquidator during the  current  period.  Financial
reports shall be  filed  within  one  year  of the
liquidation   order   and    at   least   annually
thereafter.
    (f) (1) [Within]  NOT  LATER  THAN  five  days
after the initiation  of  an appeal of an order of
liquidation, which order  has not been stayed, the
commissioner  shall  present   for   the   court's
approval a plan  for  the continued performance of
the defendant company's  policy claim obligations,
including the duty  to  defend  the  insured under
liability insurance policies,  during the pendency
of an appeal.  Such  plan  shall  provide  for the
continued performance and  payment of policy claim
obligations  in  the   normal  course  of  events,
notwithstanding the grounds  alleged in support of
the order of  liquidation  including the ground of
insolvency. In the  event  the defendant company's
financial condition will  not,  in the judgment of
the commissioner, support  the full performance of
all policy claim  obligations  during  the  appeal
pendency period, the plan may prefer the claims of
certain policyholders and claimants over creditors
and   interested  parties   as   well   as   other
policyholders and claimants,  as  the commissioner
finds to be  fair  and  equitable  considering the
relative circumstances of  such  policyholders and
claimants.  The  court   shall  examine  the  plan
submitted by the  commissioner and if it finds the
plan to be  in  the best interests of the parties,
the court shall  approve the plan. No action shall
lie  against  the   commissioner  or  any  of  his
deputies, agents, clerks,  assistants or attorneys
by any party  based  on  preference  in  an appeal
pendency plan approved by the court.
    (2)  The  appeal   pendency   plan  shall  not
supersede  or  affect   the   obligations  of  any
insurance guaranty association.
    (3) Any such plans shall provide for equitable
adjustments to be  made  by  the liquidator to any
distributions of assets  to guaranty associations,
in the event  that the liquidator pays claims from
assets of the estate, which would otherwise be the
obligations of any particular guaranty association
but for the  appeal  of  the order of liquidation,
such  that  all   guaranty   associations  equally
benefit on a pro rata basis from the assets of the
estate. In the  event  [,] an order of liquidation
is set aside  upon  any  appeal, the company shall
not  be  released   from  delinquency  proceedings
unless and until  funds  advanced  by any guaranty
association,  including reasonable  administrative
expenses  in  connection   therewith  relating  to
obligations of the  company,  shall  be  repaid in
full, together with  interest at the judgment rate
of interest or unless an arrangement for repayment
thereof has been  made  with  the  consent  of all
applicable guaranty associations.
    Sec.  12.  Section   38a-921  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) [All policies,  other  than life or health
insurance or annuities,  in  effect at the time of
issuance of an order of liquidation shall continue
in force only  for  the lesser of] NOTWITHSTANDING
ANY  POLICY OR  CONTRACT  LANGUAGE  OR  ANY  OTHER
PROVISION   OF  LAW,   ALL   POLICIES,   INSURANCE
CONTRACTS, OTHER THAN REINSURANCE, SURETY BONDS OR
SURETY UNDERTAKINGS, OTHER  THAN  LIFE  OR  HEALTH
INSURANCE OR ANNUITIES,  IN  EFFECT AT THE TIME OF
ISSUANCE OF AN ORDER OF LIQUIDATION SHALL CONTINUE
IN FORCE ONLY  FOR  THE LESSER OF: (1) A period of
thirty  days  from   the  date  of  entry  of  the
liquidation  orders; (2)  the  expiration  of  the
policy coverage; (3) the date when the insured has
replaced the insurance  coverage  with  equivalent
insurance   in  another   insurer   or   otherwise
terminated  the policy;  (4)  the  liquidator  has
effected  a  transfer  of  the  policy  obligation
pursuant to subdivision  (8)  of subsection (a) of
section 38a-923, AS  AMENDED  BY  THIS ACT; or (5)
the date proposed  by  the liquidator and approved
by the court to cancel coverage.
    (b)  An  order   of  liquidation  pursuant  to
section  38a-920,  AS   AMENDED,  shall  terminate
coverages at the  time specified in subsection (a)
of this section for purposes of any other statute.
    (c) Policies of  life  or  health insurance or
annuities shall continue  in force for such period
and under such  terms  as  is  provided for by any
applicable  guaranty  association.   [or   foreign
guaranty association.]
    (d) Policies of  life  or  health insurance or
annuities  or  any  period  of  coverage  of  such
policies not covered by a guaranty association [or
foreign  guaranty  association]   shall  terminate
under subsections (a) and (b) of this section.
    (e) THE CANCELLATION  OF  ANY  BOND  OR SURETY
UNDERTAKING  SHALL NOT  RELEASE  ANY  COSURETY  OR
GUARANTOR.
    (f) A CANCELLATION  UNDER  THIS  SECTION SHALL
NOT  AFFECT  THE   OBLIGATIONS  OF  THE  INSOLVENT
INSURER'S  REINSURERS  WITH   RESPECT   TO  LOSSES
ARISING OUT OF  ACTS  OR OCCURRENCES PRIOR TO SUCH
CANCELLATION.
    Sec.  13.  Section   38a-923  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) The liquidator  shall  have the power: (1)
To appoint a  special  deputy to act for him under
sections  38a-903  to   38a-961,   inclusive,   AS
AMENDED,   and   to   determine   his   reasonable
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)   to  employ  employees  and
agents,  legal  counsel,  actuaries,  accountants,
appraisers, consultants and  such  other personnel
as  he  may   deem  necessary  to  assist  in  the
liquidation,    NOTWITHSTANDING    ANY    CONTRARY
PROVISION OF LAW,  INCLUDING  CHAPTERS 55a AND 67;
(3)  to  fix   the   reasonable   compensation  of
employees and agents,  legal  counsel,  actuaries,
accountants, appraisers and  consultants  with the
approval  of the  court;  (4)  to  pay  reasonable
compensation to persons  appointed  and  to defray
from  the funds  or  assets  of  the  insurer  all
expenses  of  taking  possession  of,  conserving,
conducting,   liquidating,   disposing    of,   or
otherwise dealing with  the  business and property
of the insurer.  THE  LIQUIDATOR  SHALL  HAVE  THE
POWER  TO  PAY  REASONABLE  COMPENSATION  TO  SUCH
PERSONS ON AN  INTERIM  BASIS.  ALL  SUCH  INTERIM
PAYMENTS SHALL BE  SUBJECT  TO THE APPROVAL OF THE
COURT UPON SUBMISSION  BY  THE  LIQUIDATOR. In the
event that the  property  of  the insurer 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  Insurance Department. Any
amounts so advanced for expenses of administration
shall be repaid to the commissioner for the use of
the  Insurance  Department   out   of   the  first
available  moneys of  the  insurer;  (5)  to  hold
hearings, to subpoena  witnesses,  to compel their
attendance, to administer  oaths,  to  examine any
person under oath  and  to  compel  any  person to
subscribe  to his  testimony  after  it  has  been
correctly reduced to  writing,  and  in connection
therewith to require  the production of any books,
papers, records or  other documents which he deems
relevant to the  inquiry; (6) to collect all debts
and  moneys  due   and  claims  belonging  to  the
insurer, wherever located,  and  for  this purpose
(A)   to  institute   timely   action   in   other
jurisdictions in order  to  forestall  garnishment
and attachment proceedings against such debts; (B)
to  do  such   other  acts  as  are  necessary  or
expedient  to collect,  conserve  or  protect  its
assets or property,  including  the power to sell,
compound, compromise or  assign debts for purposes
of collection upon such terms and conditions as he
deems  best; and  (C)  to  pursue  any  creditor's
remedies available to enforce [his] THE CREDITOR'S
claims; (7) to conduct public and private sales of
the property of  the insurer; (8) to use assets of
the estate of an insurer under a liquidation order
to  transfer  policy   obligations  to  a  solvent
assuming insurer, if  the transfer can be arranged
without prejudice to  applicable  priorities under
section  38a-944,  AS  AMENDED;  (9)  to  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.  [He]  THE  LIQUIDATOR  shall
also  have  power   to  execute,  acknowledge  and
deliver any and  all  deeds, assignments, releases
and  other  instruments  necessary  or  proper  to
effectuate  any  sale   of   property   or   other
transaction in connection  with  the  liquidation;
(10) to borrow money on the security of the assets
in the insurer's estate or without security and to
execute and deliver  all  documents  necessary  to
that transaction for  the  purpose of facilitating
the liquidation. Any  such  funds  borrowed may be
repaid  as  an  administrative  expense  and  have
priority over any  other  claims  in class 1 under
the priority of  distributions; (11) to enter into
such contracts as  are  necessary to carry out the
order to liquidate  and  to  affirm or disavow any
contracts to which the insurer is a party; (12) to
continue to prosecute and to institute in the name
of the insurer  or  in  [his] THE LIQUIDATOR'S own
name  any  and   all   suits   and   other   legal
proceedings, in this  state  or  elsewhere, and to
abandon  the  prosecution   of   claims  he  deems
unprofitable to pursue  further. If the insurer is
dissolved pursuant to  section  38a-922,  [he] THE
LIQUIDATOR shall have  the  power  to apply to any
court in this  state  or  elsewhere  for  leave to
substitute  [himself]  THE   LIQUIDATOR   for  the
insurer as plaintiff; (13) to prosecute any action
which may exist  [in]  ON behalf of the creditors,
members,  policyholders  or  shareholders  of  the
insurer against any  officer of the insurer or any
other person; (14)  to  remove  any or all records
and property of  the insurer to the offices of the
commissioner or to  such  other  place  as  may be
convenient  for  the  purposes  of  efficient  and
orderly  execution of  the  liquidation.  Guaranty
associations [and foreign  guaranty  associations]
shall have such  reasonable  access to the records
of the insurer  as  is necessary for them to carry
out their statutory  obligations;  (15) to deposit
in one or  more  banks  in this state such sums as
are required for  meeting  current  administration
expenses  and  dividend   distributions;  (16)  to
invest all sums  not  currently needed, unless the
court orders otherwise; (17) to file any necessary
documents for record in the office of any recorder
of  deeds  or  record  office  in  this  state  or
elsewhere  where  property   of   the  insurer  is
located; (18) to  assert all defenses available to
the insurer as  against  third  persons, including
statutes of limitation, statutes of frauds and the
defense of usury.  A  waiver of any defense by the
insurer after a  petition  in liquidation has been
filed shall not  bind  the  liquidator. Whenever a
guaranty   association   or    foreign    guaranty
association has an  obligation to defend any suit,
the  liquidator  shall  give  precedence  to  such
obligation and may defend only in the absence of a
defense by such  guaranty  associations;  (19)  to
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 the general
law and that is not included with sections 38a-928
to 38a-930, inclusive;  (20)  to  intervene in any
proceeding wherever instituted  that might lead to
the appointment of  a  receiver  or trustee and to
act  as  the  receiver  or  trustee  whenever  the
appointment  is  offered;   (21)   to  enter  into
agreements with any  receiver  or  commissioner of
any other state  relating  to  the rehabilitation,
liquidation,  conservation or  dissolution  of  an
insurer doing business  in  both  states;  (22) to
exercise  all  powers   [now  held  or  hereafter]
conferred upon receivers by the laws of this state
not inconsistent with  the  provisions of sections
38a-903 to 38a-961, inclusive, AS AMENDED; (23) to
appoint,  with  the  approval  of  the  court,  an
advisory committee of  policyholders, claimants or
other  creditors including  guaranty  associations
should  such  a  committee  be  deemed  necessary.
[Such] THE committee  shall  serve at the pleasure
of the commissioner and THE DECISION TO APPOINT AN
ADVISORY COMMITTEE SHALL BE AT THE SOLE DISCRETION
OF THE COMMISSIONER.  THE  COMMITTEE  shall  serve
without compensation [other than reimbursement for
reasonable travel and  per  diem  living expenses]
AND WITHOUT REIMBURSEMENT  FOR  EXPENSES. No other
committee shall be  appointed  by the commissioner
or the court  in liquidation proceedings conducted
under sections 38a-903  to  38a-961, inclusive, AS
AMENDED; (24) to  audit  the  books and records of
all agents of the insurer insofar as those records
relate to the business activities of the insurer.
    (b) The enumeration,  in  this section, of the
powers and authority  of  the liquidator shall not
be construed as  a  limitation upon him, nor shall
it exclude in  any  manner  his right to do [such]
other acts not  [herein]  specifically enumerated,
or otherwise provided  for, as may be necessary or
appropriate for the accomplishment of or in aid of
the purpose of liquidation.
    (c)  [Notwithstanding  the   powers   of   the
liquidator as stated in subsections (a) and (b) to
the  contrary,  the   liquidator   shall  have  no
obligation to defend  claims  or  to  continue  to
defend  claims  subsequent   to  the  entry  of  a
liquidation order.] THE  LIQUIDATOR  SHALL  NOT BE
OBLIGATED TO DEFEND ANY ACTION AGAINST THE INSURER
OR INSURED AND  MAY ENFORCE INJUNCTIONS, STAYS AND
THE CLAIMS PROCEDURE SET FORTH IN SECTIONS 38a-903
TO 38a-961, INCLUSIVE,  AS AMENDED. THE LIQUIDATOR
MAY  ELECT  TO  DEFEND  ANY  ACTIONS  AGAINST  THE
INSURER OR INSUREDS  IF IT IS IN THE BEST INTEREST
OF THE ESTATE.  ANY  INSUREDS  NOT  DEFENDED  BY A
GUARANTY  ASSOCIATION  SHALL   PROVIDE  THEIR  OWN
DEFENSE, AND INCLUDE  THE  COST  OF THE DEFENSE AS
PART  OF THEIR  CLAIMS,  IF  THE  DEFENSE  WAS  AN
OBLIGATION  OF THE  INSURER.  THE  RIGHTS  OF  THE
LIQUIDATOR TO CONTEST  COVERAGE  ON  A  PARTICULAR
CLAIM  SHALL  BE   DEEMED  PRESERVED  WITHOUT  THE
NECESSITY FOR AN EXPRESS RESERVATION OF RIGHTS.
    Sec.  14.  Section   38a-924  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) Unless the  court  otherwise  directs, the
liquidator shall give  or cause to be given notice
of the liquidation  order as soon as possible: (1)
By first class  mail  and  [either  by telegram or
telephone]   ELECTRONIC   COMMUNICATION   to   the
Insurance  Commissioner of  each  jurisdiction  in
which the insurer  is doing business; (2) by first
class mail to any guaranty association [or foreign
guaranty  association]  which  is  or  may  become
obligated as a  result  of the liquidation; (3) by
first class mail  to  all [insurance agents of the
insurer]   THE  INSURER'S   AGENTS,   BROKERS   OR
PRODUCERS OF RECORD,  WITH CURRENT APPOINTMENTS OR
CURRENT LICENSES TO  REPRESENT THE INSURER, AND TO
ALL OTHER AGENTS,  BROKERS  OR  PRODUCERS  AS  THE
LIQUIDATOR DEEMS APPROPRIATE  AT  THEIR LAST KNOWN
ADDRESS; (4) by  first  class  mail to all persons
known  or  reasonably   expected  to  have  claims
against the insurer,  including  all policyholders
AND REINSURERS, at  their  last known addresses as
indicated by the  records  of the insurer; and (5)
by  publication  in   a   newspaper   of   general
circulation in the  town  in which the insurer has
its principal place  of business and in such other
locations as the liquidator deems appropriate.
    (b)  WHENEVER THE  INSURANCE  COMMISSIONER  OF
THIS STATE IS  APPOINTED  RECEIVER  FOR AN INSURER
DOMICILED IN ANOTHER  STATE,  THE  NOTICE  OF  THE
LIQUIDATION  ORDER  GIVEN   BY   THE   DOMICILIARY
LIQUIDATOR IN COMPLIANCE  WITH  THE  LAWS  OF THAT
STATE  SHALL  BE   SUFFICIENT   NOTICE,   AND  THE
ANCILLARY RECEIVER SHALL  NOT  BE REQUIRED TO GIVE
ANY NOTICE UNLESS THE DOMICILIARY LIQUIDATOR FAILS
TO GIVE NOTICE. THE ANCILLARY RECEIVER MAY REQUEST
THAT THE DOMICILIARY  LIQUIDATOR'S  NOTICE MENTION
THE   EXISTENCE   OF   ANY   APPLICABLE   GUARANTY
ASSOCIATION  LAWS  IN   THIS   STATE,  AND  INFORM
CLAIMANTS  THAT  ANY  CLAIMS  WHICH  THE  GUARANTY
ASSOCIATION OF THIS  STATE  MAY COVER MAY BE FILED
WITH  THE  DOMICILIARY   LIQUIDATOR  AND  WILL  BE
FORWARDED TO THE  APPLICABLE GUARANTY ASSOCIATION.
IF NOTICE BY THE DOMICILIARY LIQUIDATOR IN ANOTHER
STATE DOES NOT MENTION THE POSSIBILITY OF GUARANTY
ASSOCIATION  COVERAGE  IN  THIS  STATE,  THEN  THE
ANCILLARY RECEIVER SHALL ARRANGE TO GIVE NOTICE TO
THOSE  WHO  MAY   HAVE   RIGHTS  UNDER  APPLICABLE
GUARANTY ASSOCIATION LAWS  IN THIS STATE, TOGETHER
WITH  A  CITATION   TO  THE  GUARANTY  ASSOCIATION
STATUTE IN THIS  STATE.  THE  NOTICE MAY INCLUDE A
BRIEF  SUMMARY  OF  CLAIMANT'S  RIGHTS  UNDER  THE
GUARANTY ASSOCIATION LAWS  IN  THIS  STATE AND ANY
OTHER INFORMATION DEEMED APPROPRIATE.
    [(b)   Notice]   (c)   EXCEPT   AS   OTHERWISE
ESTABLISHED BY THE LIQUIDATOR WITH THE APPROVAL OF
THE COURT, NOTICE  to  potential  claimants  under
subsection  (a)  of  this  section  shall  require
claimants to file with the liquidator their claims
together with proper  proofs [thereof pursuant to]
SPECIFIED IN section  38a-938,  AS AMENDED BY THIS
ACT, on or  before  a  date  the  liquidator shall
specify in the  notice.  The  liquidator  need not
require persons claiming  cash surrender values or
other  investment values  in  life  insurance  and
annuities to file  a  claim.  All  claimants shall
have a duty to keep the liquidator informed of any
changes of address.
    [(c)] (d) (1)  Notice  under subsection (a) to
agents of the  insurer  and to potential claimants
who  are  policyholders   shall   include,   where
applicable, notice that coverage by state guaranty
associations may be  available  for all or part of
policy  benefits  in  accordance  with  applicable
state guaranty laws.
    (2) The liquidator  shall  promptly provide to
the   guaranty   associations   such   information
concerning the identities  and  addresses  of such
policyholders and their policy coverages as may be
within the liquidator's possession or control, and
otherwise cooperate with  guaranty associations to
assist them in  providing  to  such  policyholders
timely  notice  of   the   guaranty  associations'
coverage  of  policy   benefits,   including,   as
applicable, coverage of claims and continuation or
termination of coverages.
    [(d)] (e) If  notice  is  given  in accordance
with this section,  the  distribution of assets of
the insurer under  sections  38a-903  to  38a-961,
inclusive, AS AMENDED,  shall  be  conclusive with
respect to all  claimants,  whether  or  not  they
received notice.
    (f)   NOTWITHSTANDING   THE    PROVISIONS   OF
SUBSECTIONS  (a)  TO   (e),   INCLUSIVE,  OF  THIS
SECTION, THE LIQUIDATOR  SHALL  HAVE  NO  DUTY  TO
LOCATE ANY PERSON  IF  NO  ADDRESS IS FOUND IN THE
RECORDS  OF  THE   INSURER,  OR  IF  MAILINGS  ARE
RETURNED TO THE LIQUIDATOR BECAUSE OF AN INABILITY
TO DELIVER AT  THE  ADDRESS SHOWN IN THE COMPANY'S
BOOKS  AND  RECORDS.  IN  SUCH  CIRCUMSTANCES  THE
NOTICE BY PUBLICATION  AS REQUIRED BY THIS CHAPTER
AND SECTIONS 7,  15  AND 22 OF THIS ACT, OR ACTUAL
NOTICE  RECEIVED  SHALL   BE   SUFFICIENT  NOTICE.
WRITTEN CERTIFICATION BY  THE  LIQUIDATOR OR OTHER
KNOWLEDGEABLE PERSON ACTING  FOR  THE  LIQUIDATOR,
THAT THE NOTICES  WERE  DEPOSITED  IN  THE  UNITED
STATES MAIL, POSTAGE PREPAID, SHALL BE PRIMA FACIE
EVIDENCE OF MAILING AND RECEIPT.
    (g) UPON APPLICATION OF THE LIQUIDATOR AND FOR
GOOD CAUSE SHOWN,  THE  COURT MAY FIND THAT NOTICE
BY PUBLICATION AS  REQUIRED  IN  THIS  SECTION  IS
SUFFICIENT  NOTICE TO  THOSE  PERSONS  HOLDING  AN
OCCURRENCE POLICY WHICH  EXPIRED  MORE  THAN  FOUR
YEARS  PRIOR  TO   THE   ENTRY  OF  THE  ORDER  OF
LIQUIDATION, AND UNDER  WHICH THERE ARE NO PENDING
CLAIMS; OR THE  COURT  MAY  ORDER  SUCH  NOTICE TO
THOSE PERSONS AS IT DEEMS APPROPRIATE.
    Sec. 15. (NEW)  (a)  If an order instituting a
delinquency   proceeding   against    an   insurer
authorized to do business in this state is entered
under chapter 704c  of  the  general  statutes  or
sections 7, 15  and  22  of this act, the receiver
appointed under the  order  has a right to recover
on behalf of  the  insurer from any affiliate that
controlled    the   insurer    the    amount    of
distributions, other than  stock dividends paid by
the insurer on its capital stock, made at any time
during the five  years  preceding the petition for
liquidation, rehabilitation or  conservation. This
recovery  is  subject   to   the   limitations  of
subsections  (b)  to   (g),   inclusive,  of  this
section.   For   purposes    of    this   section,
"distribution" includes any dividend, or any loan,
advance, payment or  other  transfer for which the
insurer did not  receive  fair consideration prior
to the commencement of delinquency proceedings.
    (b)  No distribution  is  recoverable  if  the
recipient shows that,  when paid, the distribution
was lawful and  reasonable,  and  that the insurer
did not know  and  could not reasonably have known
that the distribution  might  adversely affect its
solvency.
    (c) The maximum  amount recoverable under this
section is the  amount  needed,  in  excess of all
other available assets,  to  pay  all claims under
the receivership, reduced  for  each  recipient by
any  amount the  recipient  has  already  paid  to
receivers under similar laws of other states.
    (d)  Any person  who  was  an  affiliate  that
controlled   the   insurer   at   the   time   the
distributions were paid is liable up to the amount
of distributions received.  Any  person who was an
affiliate that controlled  the insurer at the time
the distributions were  declared  is  liable up to
the amount of distributions he would have received
if he had  been  paid  immediately. If two or more
persons   are   liable    regarding    the    same
distributions, they shall be jointly and severally
liable.
    (e) If any  person liable under subsection (d)
of this section  is insolvent, all affiliates that
controlled that person  at  the  time the dividend
was  declared  or   paid   shall  be  jointly  and
severally liable for  any  resulting deficiency in
the amount recovered from the insolvent affiliate.
    (f) An action or proceeding under this section
may not be commenced after the earlier of: (1) Two
years after the  appointment  of  a  rehabilitator
under section 38a-915  of the general statutes, as
amended by this act, or a liquidator under section
38a-920 of the  general  statutes,  as  amended by
this act; or  (2)  the  date the rehabilitation is
terminated under subsection (b) of section 38a-918
of this general  statutes  or  the  liquidation is
terminated under section  38a-948  of  the general
statutes.
    Sec.  16.  Section   38a-935  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) (1) A producer, premium finance company or
any  other  person,   other   than   the  insured,
responsible for the payment of a premium shall [be
obligated to] pay  any  unpaid  collected  premium
INCLUDING ANY AMOUNT REPRESENTING COMMISSIONS held
by such person  at the time of the [declaration of
insolvency]  ENTRY  OF   THE   LIQUIDATION  ORDER,
whether   earned  or   unearned   BASED   ON   THE
TERMINATION OF COVERAGE  UNDER SECTION 38a-921, AS
AMENDED  BY  THIS   ACT,  and  any  unpaid  earned
premium,  all as  shown  on  the  records  of  the
insurer. A producer,  premium  finance  company or
any other person  shall  have no obligation to pay
an  uncollected unpaid  unearned  premium  to  the
liquidator. [The insured  shall  have the right to
recover from such  person  any part of an unearned
premium that represents]  (2) THE LIQUIDATOR SHALL
ALSO HAVE THE  RIGHT  TO  RECOVER  FROM ANY PERSON
OTHER  THAN  THE   INSURED,  RESPONSIBLE  FOR  THE
PAYMENT  OF A  PREMIUM,  ANY  UNEARNED  commission
actually paid or  credited to such person BASED ON
THE TERMINATION OF COVERAGE UNDER SECTION 38a-921,
AS AMENDED BY  THIS  ACT.  Credits  or set-offs or
both shall not be allowed to a producer or premium
finance  company,  OR  ANY  OTHER  PERSON  AGAINST
UNPAID PREMIUM DUE  THE  INSURER  for  any amounts
advanced  to  the  insurer  by  [the  producer  or
premium finance company] SUCH PERSON on behalf of,
but in the  absence  of a payment by, the insured,
OR FOR ANY OTHER AMOUNT PAID BY SUCH PERSON TO ANY
OTHER PERSON AFTER  THE  ENTRY  OF  THE  ORDER  OF
LIQUIDATION. (3) An  insured  shall  [be obligated
to] pay, EITHER  DIRECTLY  TO THE LIQUIDATOR OR TO
ANY AGENT WHO  HAS PAID OR IS OBLIGATED TO PAY THE
LIQUIDATOR ON BEHALF  OF  THE  INSURED, any unpaid
earned premium OR  RETROSPECTIVELY  RATED  PREMIUM
due the insurer [at the time of the declaration of
insolvency,  as  shown   on  the  records  of  the
insurer]  BASED ON  THE  TERMINATION  OF  COVERAGE
UNDER SECTION 38a-921,  AS  AMENDED  BY  THIS ACT.
PREMIUM ON SURETY  BUSINESS SHALL BE DEEMED EARNED
AT INCEPTION IF  NO POLICY TERM CAN BE DETERMINED.
ALL OTHER PREMIUM SHALL BE DEEMED EARNED AND SHALL
BE  PRORATED  OVER  THE  DETERMINED  POLICY  TERM,
REGARDLESS OF ANY PROVISION IN THE BOND, GUARANTY,
CONTRACT OR OTHER AGREEMENT. IF A CLAIM FOR LOSSES
INCURRED UNDER A  POLICY  IS APPROVED BY THE COURT
UNDER  SUBSECTION  (b)   OF  SECTION  38a-945,  AS
AMENDED BY THIS ACT, THEN ALL PREMIUM FOR THE FULL
POLICY TERM SHALL BE DEEMED EARNED. (4) ANY PERSON
WHO COLLECTED PREMIUM, OR FINANCED PREMIUM UNDER A
PREMIUM FINANCE CONTRACT,  THAT IS DUE THE INSURER
IN  LIQUIDATION  SHALL  BE  DEEMED  TO  HOLD  THAT
PREMIUM IN TRUST AS A FIDUCIARY FOR THE BENEFIT OF
THE INSURER AND  TO  HAVE  AVAILED  HIMSELF OF THE
LAWS OF THIS STATE, REGARDLESS OF ANY PROVISION IN
ANY AGENCY CONTRACT  OR  OTHER  AGREEMENT. (5) ANY
PREMIUM FINANCE COMPANY  SHALL BE OBLIGATED TO PAY
ANY AMOUNTS DUE  THE  INSURER FROM PREMIUM FINANCE
CONTRACTS,  WHETHER  THE   PREMIUM  IS  EARNED  OR
UNEARNED. THE LIQUIDATOR  HAS THE RIGHT TO COLLECT
ANY  UNPAID FINANCED  PREMIUM  DIRECTLY  FROM  THE
PREMIUM FINANCE COMPANY,  BY  TAKING AN ASSIGNMENT
OF THE UNDERLYING  PREMIUM  FINANCE  CONTRACTS, OR
DIRECTLY FROM THE  INSURED  WHO  IS A PARTY TO THE
PREMIUM FINANCE CONTRACT.
    (b) Upon satisfactory  evidence of a violation
of  this  section,  BY  A  PERSON  OTHER  THAN  AN
INSURED, the commissioner may pursue either one or
both  of the  following  courses  of  action:  (1)
Suspend or revoke  or refuse to renew the licenses
of such offending  party  or parties; (2) impose a
penalty of not  more than one thousand dollars for
each and every act in violation of this section by
said party or parties.
    (c) Before the commissioner [shall take] TAKES
any action as  set forth in subsection (b) of this
section,  he shall  give  written  notice  to  the
person, company, association,  or exchange accused
of violating the  law,  stating  specifically  the
nature of the alleged violation, and fixing a time
and place, at  least  ten  days thereafter, when a
hearing on the  matter  shall  be held. After such
hearing, or upon  failure of the accused to appear
at such hearing,  the  commissioner,  if  he shall
find such violation,  shall  impose  such  of  the
penalties under subsection  (b) of this section as
he deems advisable.
    (d) [When the  commissioner  shall take action
in any or  all  of  the ways set out in subsection
(b)  of this  section,  the  party  aggrieved  may
appeal from said  action  to  the Superior Court.]
ANY  PERSON  AGGRIEVED   BY   THE  ACTION  OF  THE
COMMISSIONER IN REVOKING,  SUSPENDING  OR REFUSING
TO GRANT A  LICENSE  OR  IN  IMPOSING  A  FINE MAY
APPEAL THEREFROM IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 4-183,  EXCEPT  VENUE  FOR  SUCH APPEAL
SHALL BE IN  THE JUDICIAL DISTRICT OF HARTFORD-NEW
BRITAIN.
    Sec.  17.  Section   38a-938  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a)  Proof  of   claim   shall  consist  of  a
statement signed by the claimant that includes all
of the following  that  are  applicable:  (1)  The
particulars   of   the    claim    including   the
consideration given for  it;  (2) the identity and
amount of the  security  on  the  claim;  (3)  the
payments made on  the  debt,  if any; (4) that the
sum claimed is  justly  owing and that there is no
set-off, counterclaim, or  defense  to  the claim;
(5) any right  of  priority  of  payment  or other
specific right asserted  by  the  claimants; (6) a
copy  of  ANY  written  instrument  which  is  the
foundation of the  claim;  [and]  (7) the name and
address  of the  claimant  and  the  attorney  who
represents  him,  if   any;  AND  (8)  THE  SOCIAL
SECURITY OR FEDERAL EMPLOYER IDENTIFICATION NUMBER
OF THE CLAIMANT.
    (b) No claim  need be considered or allowed if
it  does  not   contain  all  the  information  in
subsection  (a)  of  this  section  which  may  be
applicable.  The liquidator  may  require  that  a
prescribed form be used and may require that other
information and documents be included.
    (c) At any time the liquidator may request the
claimant  to  present   information   or  evidence
supplementary to that  required  under  subsection
(a) of this  section  and may take testimony under
oath,   require  production   of   affidavits   or
depositions   or   otherwise   obtain   additional
information or evidence.
    (d) No judgment or order against an insured or
the insurer entered  after the date of filing of a
successful  petition  for   liquidation,   and  no
judgment  or  order  against  an  insured  or  the
insurer entered at  any  time  by  default  or  by
collusion,  need  be  considered  as  evidence  of
liability or of quantum of damages. No judgment or
order against an  insured  or  the insurer entered
within  four  months  before  the  filing  of  the
petition  need  be   considered   as  evidence  of
liability or of the quantum of damages.
    (e) [All claims  of  a guaranty association or
foreign guaranty association shall be in such form
and contain such  substantiation  as may be agreed
to  by the  association  and  the  liquidator.]  A
GUARANTY ASSOCIATION SHALL  BE PERMITTED TO FILE A
SINGLE OMNIBUS PROOF  OF  CLAIM  FOR ALL CLAIMS OF
THE  ASSOCIATION IN  CONNECTION  WITH  PAYMENT  OF
CLAIMS OF THE INSOLVENT INSURER. THE OMNIBUS PROOF
OF CLAIM SHALL  BE  PERIODICALLY  UPDATED  BY  THE
ASSOCIATION, AND THE  LIQUIDATOR  MAY  REQUIRE THE
ASSOCIATION  TO  SUBMIT  A  REASONABLE  AMOUNT  OF
SUPPORTING DOCUMENTATION.
    Sec.  18.  Section   38a-939  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    [(a) The claim  of  a  third  party  which  is
contingent only on  his first obtaining a judgment
against  the  insured   shall  be  considered  and
allowed as if there were no such contingency.
    (b) A claim may be allowed even if contingent,
if it is filed in accordance with section 38a-937.
It may be  allowed  and  may  participate  in  all
distributions declared after  it  is  filed to the
extent that it  does  not  prejudice  the  orderly
administration of the liquidation.
    (c) Claims that are due except for the passage
of time shall  be  treated  as absolute claims are
treated, except that such claims may be discounted
at the legal rate of interest.]
    [(d)]  (a)  Claims   made   under   employment
contracts  by directors,  principal  officers,  or
persons in fact  performing  similar  functions or
having similar powers  are  limited to payment for
services rendered prior  to  the  issuance  of any
order of rehabilitation or liquidation pursuant to
section 38a-915 or 38a-920, AS AMENDED.
    (b) WHEN A  LIQUIDATION ORDER HAS BEEN ENTERED
IN A PROCEEDING  AGAINST  AN INSURER, ANY INSURED,
REINSURED, THIRD PARTY  PERSON  WHO HAS A CAUSE OF
ACTION AGAINST AN  INSURED  OF THE INSURER, OR ANY
OTHER PERSON OR  ENTITY  THAT HAS A CLAIM OR CAUSE
OF ACTION AGAINST  THE  INSURER,  SHALL  HAVE  THE
RIGHT  TO  FILE   A   CLAIM   IN  THE  PROCEEDING,
REGARDLESS OF THE  FACT  THAT  THE  CLAIM  MAY  BE
CONTINGENT, UNLIQUIDATED OR IMMATURE. FOR PURPOSES
OF THIS SECTION:  (1) A CLAIM IS CONTINGENT IF THE
ACCIDENT, CASUALTY, DISASTER  OR  LOSS  INSURED OR
REINSURED AGAINST OCCURRED  ON  OR BEFORE THE DATE
FIXED UNDER SECTION  38a-920,  AS  AMENDED BY THIS
ACT, BUT THE ACT OR EVENT TRIGGERING THE INSURER'S
OBLIGATION TO PAY  HAS  NOT  OCCURRED  AS  OF THAT
DATE; (2) A CLAIM IS UNLIQUIDATED IF THE AMOUNT OF
THE CLAIM HAS NOT BEEN DETERMINED; AND (3) A CLAIM
IS IMMATURE IF  PAYMENT  ON  THE  CLAIM IS NOT YET
DUE.
    (c) EXCEPT AS  PROVIDED  IN  THIS  SECTION,  A
CLAIM MAY NOT  SHARE  IN  A DISTRIBUTION OF ASSETS
PURSUANT TO THIS  CHAPTER OR SECTIONS 7, 15 AND 22
OF  THIS  ACT,   UNLESS  IT  HAS  BEEN  DEFINITELY
DETERMINED,  PROVED  AND  ALLOWED.  A  CONTINGENT,
UNLIQUIDATED OR IMMATURE  CLAIM  MAY  SHARE  IN  A
DISTRIBUTION OF ASSETS  PROVIDED  THAT,  AS OF THE
TIME OF THE ALLOWANCE OR DISALLOWANCE OF THE CLAIM
BY THE COURT:  (1)  IF  THE CLAIM WAS A CONTINGENT
CLAIM  AGAINST  THE   INSURER   AS   OF  THE  DATE
ESTABLISHED UNDER SECTION 38a-920, AS AMENDED, THE
CLAIMANT  HAS PRESENTED  PROOF  OF  THE  INSURER'S
OBLIGATION TO PAY  REASONABLY  SATISFACTORY TO THE
RECEIVER; (2) IF  THE CLAIM WAS A CONTINGENT CLAIM
AS OF THE  DATE ESTABLISHED UNDER SECTION 38a-920,
AS AMENDED BY THIS ACT, AND WAS BASED UPON A CAUSE
OF ACTION AGAINST  AN  INSURED OF THE INSURER, (A)
IT MAY BE REASONABLY INFERRED FROM PROOF PRESENTED
UPON THE CLAIM  THAT THE CLAIMANT WOULD BE ABLE TO
OBTAIN A JUDGMENT,  (B)  THE  PERSON HAS FURNISHED
SUITABLE PROOF, UNLESS  THE  COURT  FOR GOOD CAUSE
SHOWN  SHALL OTHERWISE  DIRECT,  THAT  NO  FURTHER
VALID  CLAIMS CAN  BE  MADE  AGAINST  THE  INSURER
ARISING OUT OF  THE  CAUSE  OF  ACTION  OTHER THAN
THOSE  ALREADY  PRESENTED,   AND   (C)  THE  TOTAL
LIABILITY OF THE  INSURER TO ALL CLAIMANTS ARISING
OUT OF THE  SAME  ACT SHALL BE NO GREATER THAN ITS
TOTAL  LIABILITY  WOULD   BE   WERE   IT   NOT  IN
LIQUIDATION. IN THOSE CASES UNDER SUBPARAGRAPH (C)
OF  THIS  SUBDIVISION,  INSUREDS  MAY  INCLUDE  IN
CONTINGENT CLAIMS REASONABLE  ATTORNEY'S  FEES FOR
SERVICES RENDERED AFTER  THE  DATE OF LIQUIDATION,
IN DEFENSE OF  CLAIMS  OR  SUITS  COVERED  BY  THE
INSURED'S  POLICY, PROVIDED  THE  ATTORNEY'S  FEES
HAVE BEEN PAID  BY  THE  INSURED  AND  EVIDENCE OF
PAYMENT IS PRESENTED  TO  THE RECEIVER; (3) IF THE
CLAIM WAS UNLIQUIDATED  AS OF THE DATE ESTABLISHED
UNDER SECTION 38a-920, AS AMENDED BY THIS ACT, ITS
AMOUNT   HAS  BEEN   DETERMINED,   PROVIDED   SUCH
DETERMINATION  DOES  NOT   PREJUDICE  THE  ORDERLY
ADMINISTRATION OF THE  LIQUIDATION  PROCEEDING; OR
(4) IF THE  CLAIM  WAS  IMMATURE  AS  OF  THE DATE
ESTABLISHED UNDER SECTION  38a-920,  AS AMENDED BY
THIS ACT, IT  SHALL BE DISCOUNTED AT THE HIGHER OF
THE LEGAL RATE  OF  INTEREST ACCRUING ON JUDGMENTS
OR THE RATE OF INTEREST AVAILABLE ON UNITED STATES
TREASURY  SECURITIES  OF  APPROXIMATELY  THE  SAME
MATURITY.
    (d)   NOTWITHSTANDING   THE    PROVISIONS   OF
SUBSECTIONS  (a)  TO   (c),   INCLUSIVE,  OF  THIS
SECTION, ANY INSURED  SHALL HAVE THE RIGHT TO FILE
A CLAIM FOR  THE  PROTECTION  AFFORDED  UNDER  THE
INSURED'S POLICY, IRRESPECTIVE  OF WHETHER A CLAIM
IS THEN KNOWN,  IF  THE  POLICY  IS  AN OCCURRENCE
POLICY. THEREAFTER, AT  SUCH  TIME THAT A SPECIFIC
CLAIM IS MADE  BY  OR  AGAINST  THE  INSURER,  THE
INSURED  SHALL  SUPPLEMENT   HIS   CLAIM  AND  THE
RECEIVER SHALL TREAT  THE  SAME  AS  A CONTINGENT,
UNLIQUIDATED OR IMMATURE CLAIM. ANY SUCH CLAIMS OF
POLICYHOLDERS   FOR  THE   PROTECTION   UNDER   AN
OCCURRENCE POLICY REMAINING AT OR NEAR THE CLOSING
OF THE ESTATE  SHALL  BE DISPOSED OF IN ACCORDANCE
WITH SECTION 38a-945, AS AMENDED BY THIS ACT.
    (e)  THE  ESTIMATION   AND   ALLOWANCE   OF  A
CONTINGENT  CLAIM UNDER  THIS  SECTION  SHALL  NOT
PROVIDE A BASIS TO COMPEL PAYMENT FROM A REINSURER
OF ESTIMATED INCURRED BUT NOT REPORTED LOSSES AND,
EXCEPT  WITH  RESPECT   TO   CLAIMS   MADE   UNDER
SUBSECTION (c) OF  SECTION  38a-939,  AS  AMENDED,
OUTSTANDING  RESERVES,  UNLESS   THE   REINSURANCE
CONTRACT SPECIFICALLY PROVIDES  FOR THE PAYMENT OF
SUCH LOSSES OR RESERVES.
    Sec.  19.  Section   38a-940  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) Whenever any  third  party asserts a cause
of action against  an  insured  of  an  insurer in
liquidation, the third party may file a claim with
the liquidator ON  OR  BEFORE  THE  LAST  DAY  FOR
FILING CLAIMS.
    (b) Whether or  not  the  third  party files a
claim, the insured  may  file a claim on [his] THE
INSURED'S own behalf  in  the  liquidation. TO THE
EXTENT THE INSURED  FILES  A  CLAIM,  IT  SHALL BE
DEEMED SUFFICIENT TO COVER ALL RELATED THIRD PARTY
CLAIMS. If the  insured  fails  to file a claim by
the date for  filing claims specified in the order
of liquidation or  within sixty days after mailing
of the notice  required  by  section  38a-924,  AS
AMENDED BY THIS  ACT,  whichever is later, [he is]
THE INSURER SHALL  BE  DEEMED  an  unexcused  late
filer.
    (c)   The   liquidator    shall   make   [his]
recommendations to the  court  pursuant to section
38a-944, AS AMENDED BY THIS ACT, for the allowance
of an insured's  claim  pursuant to subsection (b)
of  this  section   after   consideration  of  the
probable outcome of any pending action against the
insured on which  the claim is based, the probable
damages recoverable in the action and the probable
costs and expenses  of defense. After allowance by
the  court,  the  liquidator  shall  withhold  any
dividends  payable  on   the  claim,  pending  the
outcome of litigation  and  negotiation  with  the
insured. Whenever it  seems  appropriate, [he] THE
LIQUIDATOR shall reconsider the claim on the basis
of   additional   information    and   amend   his
recommendations to the court. The insured shall be
afforded the same  notice  and  opportunity  to be
heard on all  changes  in the recommendation as in
its initial determination. The court may amend its
allowance as it  [thinks]  FINDS  appropriate.  As
claims against the  insured are settled or barred,
the insured shall be paid from the amount withheld
the same percentage  dividend as was paid on other
claims of like  priority,  based  on the lesser of
(1) the amount actually recovered from the insured
by action or paid by agreement plus the reasonable
costs and expenses  of  defense, or (2) the amount
allowed on the  claims  by  the  court.  After all
claims are settled  or  barred,  any sum remaining
from  the amount  withheld  shall  revert  to  the
undistributed  assets of  the  insurer.  Delay  in
final payment under this subsection shall not be a
reason   for   unreasonable    delay    of   final
distribution and discharge of the liquidator.
    (d) If several  claims founded upon one policy
are filed, whether  by  third parties or as claims
by  the  insured   under  this  section,  and  the
aggregate allowed amount  of  the  claims to which
the same limit  of  liability  in  the  policy  is
applicable  exceeds  that  limit,  each  claim  as
allowed shall be reduced in the same proportion so
that the total  equals the policy limit. Claims by
the insured shall  be  evaluated  as in subsection
(c) of this  section.  If  any  insured's claim is
subsequently reduced under  subsection (c) of this
section,   the  amount   thus   freed   shall   be
apportioned ratably among  the  claims  which have
been reduced under this subsection.
    (e)  No claim  may  be  presented  under  this
section if it is or may be covered by any guaranty
association. [or foreign guaranty association.]
    Sec.  20.  Section   38a-941  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) When a claim is denied in whole or in part
by  the  liquidator,   written   notice   of   the
determination shall be  given  to  the claimant or
[his] THE CLAIMANT'S  attorney by first class mail
at  the address  shown  in  the  proof  of  claim.
[Within sixty] NOT  LATER  THAN THIRTY days [from]
AFTER the mailing  of the notice, the claimant may
file [his] objections  with  the  liquidator.  ANY
FILED OBJECTIONS SHALL CLEARLY SET FORTH ALL FACTS
AND THE LEGAL  BASIS  FOR  THE  OBJECTIONS AND THE
REASONS WHY THE  CLAIM  SHOULD  BE  ALLOWED. If no
such filing is made, [the claimant may not further
object to] the determination SHALL BE FINAL.
    (b) Whenever objections  are  filed  with  the
liquidator and the  liquidator does not alter [his
denial] THE DETERMINATION of the claim as a result
of the objections,  the  liquidator  shall ask the
court for a  hearing  as  soon  as practicable and
give notice of  the hearing by first class mail to
the claimant or  [his] THE CLAIMANT'S attorney and
to any other  persons  directly affected, not less
than ten nor more than thirty days before the date
of the hearing.  The  matter  may  be heard by the
court or by  a court-appointed referee. [who shall
submit   findings   of   fact   along   with   his
recommendation.] THE HEARING SHALL BE CONDUCTED ON
THE RECORD IN  AN  INFORMAL  MANNER AND THE FORMAL
RULES OF EVIDENCE  AND CIVIL PROCEDURE NEED NOT BE
STRICTLY APPLIED. HEARINGS SHALL BE HELD WITHOUT A
JURY. PREHEARING DISCOVERY  SHALL  BE  LIMITED  TO
SUCH PRETRIAL DISCOVERY  AS EXPRESSLY PERMITTED IN
ARBITRATION PROCEEDINGS UNDER CHAPTER 909.
    (c)  WHEN A  DISPUTED  CLAIM  IS  HEARD  BY  A
REFEREE, THE REFEREE SHALL SUBMIT WRITTEN FINDINGS
OF FACT AND  CONCLUSIONS  OF  LAW  ALONG  WITH THE
RECOMMENDATION FOR DISPOSITION  TO  THE COURT. THE
REFEREE'S RECOMMENDATION SHALL  BECOME  THE  FINAL
JUDGMENT OF THE  COURT,  UNLESS  OBJECTIONS TO THE
REFEREE'S  RECOMMENDATIONS  ARE   FILED   BY   THE
LIQUIDATOR OR CLAIMANT  WITH  THE  COURT NOT LATER
THAN  FIFTEEN DAYS  AFTER  THE  RECOMMENDATION  IS
MAILED TO THE LIQUIDATOR AND CLAIMANT.
    (d) THE FINAL  DISPOSITION  BY  THE COURT OF A
DISPUTED CLAIM, WHETHER  AFTER  A  HEARING  BY THE
COURT OR AFTER  A  RECOMMENDATION  BY  A  REFEREE,
SHALL BE DEEMED  A  FINAL JUDGMENT FOR PURPOSES OF
APPEAL.
    (e) THE COURTS  OF THIS STATE MAY MAKE SPECIAL
RULES  OF CIVIL  PROCEDURE  FOR  DISPUTED  CLAIMS,
PROVIDED THAT THE  RULES ARE NOT INCONSISTENT WITH
THIS CHAPTER AND  SECTIONS  7,  15  AND 22 OF THIS
ACT.
    Sec.  21.  Section   38a-942  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    Whenever [a creditor]  AN  OBLIGEE whose claim
against an insurer  is  secured,  in  whole  or in
part, by the  undertaking of another person, fails
to prove and file that claim, the other person may
do so in  the  [creditor's]  OBLIGEE'S  name,  and
shall  be  subrogated   to   the   rights  of  the
[creditor] OBLIGEE, whether  the  claim  has  been
filed by the  [creditor]  OBLIGEE  or by the other
person in the  [creditor's] OBLIGEE'S name, to the
extent  that  [he]   THE  OBLIGEE  discharges  the
undertaking. In the  absence  of an agreement with
the [creditor] OBLIGEE  to the contrary, the other
person shall not  be  entitled to any distribution
[,  however,]  until   the   amount  paid  to  the
[creditor] OBLIGEE on  the  undertaking  plus  the
distributions paid on the claim from the insurer's
estate to the [creditor] OBLIGEE equals the amount
of the entire claim of the [creditor] OBLIGEE. Any
excess received by the [creditor] OBLIGEE shall be
held by him  in  trust  for such other person. The
term "other person",  as  used  in this section is
not intended to  apply  to a guaranty association.
[or foreign guaranty association.]
    Sec.  22.  (NEW)   (a)   Notwithstanding   any
provision   of  sections   38a-903   to   38a-961,
inclusive, of the  general  statutes,  as amended,
including    any    provision    permitting    the
modification  of contracts,  or  other  law  of  a
state, no person  shall  be  stayed  or prohibited
from  exercising:  (1)   A  contractual  right  to
terminate,  liquidate or  close  out  any  netting
agreement or qualified  financial contract with an
insurer because of:  (A) The insolvency, financial
condition or default  of  the insurer at any time,
provided  that  the  right  is  enforceable  under
applicable  law other  than  sections  38a-903  to
38a-961, inclusive, of  the  general  statutes, as
amended,  or (B)  the  commencement  of  a  formal
delinquency proceeding under  sections  38a-903 to
38a-961, inclusive, of  the  general  statutes, as
amended. (2) Any  right  under a pledge, security,
collateral or guarantee  agreement  or  any  other
similar  security arrangement  or  credit  support
document  relating  to   a  netting  agreement  or
qualified financial contract.  (3)  Subject to any
provision of subsection  (b) of section 38a-932 of
the general statutes,  any right to set off or net
out  any termination  value,  payment  amount,  or
other  transfer obligation  arising  under  or  in
connection with a  netting  agreement or qualified
financial contract where  the  counterparty or its
guarantor  is organized  under  the  laws  of  the
United States or  a  state or foreign jurisdiction
approved by the Securities Valuation Office of the
National Association of Insurance Commissioners as
eligible for netting.
    (b) Upon termination  of  a netting agreement,
the net or  settlement  amount,  if any, owed by a
nondefaulting party to an insurer against which an
application  or  petition  has  been  filed  under
sections 38a-903 to  38a-961,  inclusive,  of  the
general statutes, as amended, shall be transferred
to  or on  the  order  of  the  receiver  for  the
insurer, even if  the  insurer  is  the defaulting
party,  notwithstanding  any   provision   in  the
netting  agreement  that   may  provide  that  the
nondefaulting party is not required to pay any net
or settlement amount  due  to the defaulting party
upon  termination.  Any  limited  two-way  payment
provision in a  netting  agreement with an insurer
that has defaulted  shall  be  deemed to be a full
two-way   payment   provision   as   against   the
defaulting insurer. Any  such  property  or amount
shall, except to  the  extent it is subject to one
or more secondary  liens  or  encumbrances,  be  a
general asset of the insurer.
    (c)  In  making  any  transfer  of  a  netting
agreement or qualified  financial  contract  of an
insurer subject to  a  delinquency proceeding, the
receiver shall either:  (1) Transfer to one party,
other than an  insurer  subject  to  a delinquency
proceeding, all netting  agreements  and qualified
financial contracts between  a counterparty or any
affiliate of the counterparty and the insurer that
is the subject  of  the proceeding, including: (A)
All rights and  obligations  of  each  party under
each   such  netting   agreement   and   qualified
financial   contract;  and   (B)   all   property,
including  any  guarantees   or   credit   support
documents, securing any claims of each party under
such  netting agreement  and  qualified  financial
contract; or (2)  transfer  none  of  the  netting
agreements, qualified financial contracts, rights,
obligations or property referred to in subdivision
(1)  of this  subsection,  with  respect  to  such
counterparty   and   any    affiliate    of   such
counterparty.
    (d) If a  receiver  for  an  insurer  makes  a
transfer of one  or  more  netting  agreements  or
qualified financial contracts,  then  the receiver
shall use its  best  efforts  to notify any person
who  is a  party  to  the  netting  agreements  or
qualified financial contracts  of  the transfer by
twelve o'clock noon, the receiver's local time, on
the  business  day  following  the  transfer.  For
purposes of this  subsection, "business day" means
a day other  than a Saturday, Sunday or any day on
which either the  New  York  Stock Exchange or the
Federal Reserve Bank of New York is closed.
    (e)  Notwithstanding any  other  provision  of
sections 38a-903 to  38a-961,  inclusive,  of  the
general statutes, as  amended,  a receiver may not
avoid  a  transfer  of  money  or  other  property
arising under or  in  connection  with  a  netting
agreement or qualified  financial contract, or any
pledge,   security,   collateral    or   guarantee
agreement   or   any    other   similar   security
arrangement or credit support document relating to
a  netting  agreement   or   qualified   financial
contract, that is  made before the commencement of
a  formal delinquency  proceeding  under  sections
38a-903  to 38a-961,  inclusive,  of  the  general
statutes, as amended,  except  that a transfer may
be avoided under subsection (a) of section 38a-928
of  the  general  statutes,  as  amended,  if  the
transfer was made  with  actual  intent to hinder,
delay or defraud the insurer, a receiver appointed
for the insurer or existing or future creditors.
    (f)  Notwithstanding any  other  provision  of
sections 38a-903 to  38a-961,  inclusive,  of  the
general  statutes, as  amended,  any  claim  of  a
counterparty against the  estate  arising from the
receiver's  disaffirmance  or   repudiation  of  a
netting agreement or  qualified financial contract
that  has not  been  previously  affirmed  in  the
liquidation      or     immediately      preceding
rehabilitation case shall  be determined and shall
be allowed or  disallowed  as  if  the  claim  has
arisen  before the  date  of  the  filing  of  the
petition for liquidation  or,  if a rehabilitation
proceeding   is   converted   to   a   liquidation
proceeding, as if  the claim had arisen before the
date  of  the   filing   of   the   petition   for
rehabilitation. The amount  of  the claim shall be
the actual direct  compensatory damages determined
as of the date of the disaffirmance or repudiation
of the netting  agreement  or  qualified financial
contract.  "Actual  direct  compensatory  damages"
does not include  punitive  or  exemplary damages,
damages for lost  profit  or  lost  opportunity or
damages for pain  and  suffering, but does include
normal and reasonable  costs  of  cover  or  other
reasonable measures of  damages  utilized  in  the
derivatives market for  the contract and agreement
claims.
    (g)  As used  in  this  section,  "contractual
right"  includes  any   right,   whether   or  not
evidenced in writing,  arising  under statutory or
common  law,  a   rule  or  bylaw  of  a  national
securities exchange, national  securities clearing
organization or securities clearing agency, a rule
or bylaw, or  a  resolution of the governing body,
of a contract market or its clearing organization,
or under law merchant.
    (h) The provisions  of  this section shall not
apply to persons who are affiliates of the insurer
that is the subject of the proceeding.
    (i)  All  rights   of   counterparties   under
sections 38a-903 to  38a-961,  inclusive,  of  the
general  statutes,  as  amended,  shall  apply  to
netting agreements entered  into  on behalf of the
general account or separate accounts if the assets
of each separate  account  are  available  only to
counterparties to netting  agreements entered into
on behalf of that separate account.
    Sec.  23.  Section   38a-944  of  the  general
statutes, as amended  by  section  1 of public act
97-113,  is  repealed   and   the   following   is
substituted in lieu thereof:
    (a) The priority  of  distribution  of  claims
from the insurer's  estate  shall be in accordance
with the order  in  which  each class of claims is
set forth in  this  section.  Every  claim in each
class shall be  paid  in  full  or  adequate funds
retained for such  payment  before  the members of
the next class  receive  any  payment.  ONCE  SUCH
FUNDS ARE RETAINED  BY THE LIQUIDATOR AND APPROVED
BY THE COURT,  THE  INSURER'S ESTATE SHALL HAVE NO
FURTHER LIABILITY TO  MEMBERS OF THAT CLASS EXCEPT
TO THE EXTENT  OF THE RETAINED FUNDS AND ANY OTHER
UNDISTRIBUTED  FUNDS.  No   subclasses   shall  be
established within any  class,  EXCEPT AS PROVIDED
IN SUBDIVISION (1)  OF  SUBSECTION  (a) OF SECTION
38a-923, AS AMENDED.  No  claim  by a shareholder,
policyholder or other  creditor shall be permitted
to circumvent the priority classes through the use
of equitable remedies.  The  order of distribution
of claims shall be:
    (1)  Class  1.   The  costs  and  expenses  of
administration EXPRESSLY APPROVED BY THE RECEIVER,
including but not  limited  to  the following: (A)
The actual and  necessary  costs  of preserving or
recovering  the  assets   of   the   insurer;  (B)
compensation  for all  services  rendered  in  the
CONSERVATION, REHABILITATION OR  liquidation;  (C)
any  necessary  filing  fees;  (D)  the  fees  and
mileage payable to  witnesses;  AND (E) authorized
reasonable attorney's fees  and other professional
services    rendered    in    the    CONSERVATION,
rehabilitation [and] OR  liquidation.  [;  (F) the
reasonable expenses of  a  guaranty association or
foreign guaranty association in handling claims.]
    (2) CLASS 2.  THE  ADMINISTRATIVE  EXPENSES OF
GUARANTY  ASSOCIATIONS.  FOR   PURPOSES   OF  THIS
SECTION SUCH EXPENSES  SHALL  BE  THOSE REASONABLE
EXPENSES INCURRED BY  GUARANTY  ASSOCIATIONS WHERE
THE EXPENSES ARE  NOT  PAYMENTS  OR EXPENSES WHICH
ARE  REQUIRED TO  BE  INCURRED  AS  DIRECT  POLICY
BENEFITS  IN  FULFILLMENT  OF  THE  TERMS  OF  THE
INSURANCE CONTRACT OR  POLICY, AND THAT ARE OF THE
TYPE AND NATURE  THAT,  BUT  FOR THE ACTIVITIES OF
THE GUARANTY ASSOCIATION OTHERWISE WOULD HAVE BEEN
INCURRED  BY  THE  RECEIVER,  INCLUDING,  BUT  NOT
LIMITED  TO,  EVALUATIONS   OF   POLICY  COVERAGE,
ACTIVITIES   INVOLVED  IN   THE   ADJUSTMENT   AND
SETTLEMENT  OF CLAIMS  UNDER  POLICIES,  INCLUDING
THOSE OF IN-HOUSE  OR  OUTSIDE  ADJUSTERS, AND THE
REASONABLE EXPENSES INCURRED  IN  CONNECTION  WITH
THE  ARRANGEMENTS  FOR  ONGOING  COVERAGE  THROUGH
TRANSFER TO OTHER  INSURERS,  POLICY  EXCHANGES OR
MAINTAINING POLICIES IN FORCE. THE RECEIVER MAY IN
HIS  OR  HER   SOLE   DISCRETION   APPROVE  AS  AN
ADMINISTRATIVE  EXPENSE  UNDER  THIS  SECTION  ANY
OTHER   REASONABLE  EXPENSES   OF   THE   GUARANTY
ASSOCIATION  IF  THE   RECEIVER   FINDS:  (A)  THE
EXPENSES ARE NOT  EXPENSES  REQUIRED TO BE PAID OR
INCURRED AS DIRECT POLICY BENEFITS BY THE TERMS OF
THE POLICY, AND  (B) THE EXPENSES WERE INCURRED IN
FURTHERANCE OF ACTIVITIES THAT PROVIDED A MATERIAL
ECONOMIC  BENEFIT  TO   THE  ESTATE  AS  A  WHOLE,
IRRESPECTIVE OF WHETHER THE ACTIVITIES RESULTED IN
ADDITIONAL  BENEFITS  TO  COVERED  CLAIMANTS.  THE
COURT SHALL APPROVE  SUCH EXPENSES UNLESS IT FINDS
THE  RECEIVER ABUSED  HIS  OR  HER  DISCRETION  IN
APPROVING THE EXPENSES. IF THE RECEIVER DETERMINES
THAT THE ASSETS  OF  THE ESTATE WILL BE SUFFICIENT
TO PAY ALL  CLASS 1 CLAIMS IN FULL, CLASS 2 CLAIMS
SHALL  BE  PAID   CURRENTLY,   PROVIDED  THAT  THE
LIQUIDATOR  SHALL  SECURE   FROM   EACH   OF   THE
ASSOCIATIONS RECEIVING DISBURSEMENTS  PURSUANT  TO
THIS  SECTION  AN   AGREEMENT  TO  RETURN  TO  THE
LIQUIDATOR   SUCH  DISBURSEMENT,   TOGETHER   WITH
INVESTMENT   INCOME  ACTUALLY   EARNED   ON   SUCH
DISBURSEMENTS, AS MAY  BE  REQUIRED TO PAY CLASS 1
CLAIMS. NO BOND  SHALL  BE  REQUIRED  OF  ANY SUCH
ASSOCIATION.
    [(2) Class 2]  (3)  CLASS  3. All claims under
policies including such  claims  of the federal or
any state or local government for losses incurred,
including third party  claims, CLAIMS FOR UNEARNED
PREMIUMS, and all claims of a guaranty association
[or foreign guaranty  association]  FOR PAYMENT OF
COVERED  CLAIMS  OR  COVERED  OBLIGATIONS  OF  THE
INSURER. ALL CLAIMS  OF A GUARANTY ASSOCIATION FOR
REASONABLE EXPENSES other  than  those included in
class [1] 2.  All  claims  under  life  AND HEALTH
insurance policies, annuity  contracts and funding
agreements,  whether for  death  proceeds,  HEALTH
BENEFITS, annuity proceeds,  or  investment values
shall be treated  as  loss claims. That portion of
any loss, indemnification for which is provided by
other  benefits or  advantages  recovered  by  the
claimant, shall not  be  included  in  this class,
other than benefits  or  advantages  recovered  or
recoverable in discharge  of  familial obligations
of support or  by way of succession at death or as
proceeds of life  insurance,  or as gratuities. No
payment by an  employer  to  his employee shall be
treated  as  a   gratuity.   NOTWITHSTANDING   THE
PROVISIONS  OF  THIS  SUBDIVISION,  THE  FOLLOWING
CLAIMS SHALL BE  EXCLUDED  FROM  CLASS 3 PRIORITY:
(A) OBLIGATIONS OF  THE  INSOLVENT INSURER ARISING
OUT  OF  REINSURANCE  CONTRACTS;  (B)  OBLIGATIONS
INCURRED  AFTER  THE   EXPIRATION   DATE   OF  THE
INSURANCE POLICY OR  AFTER  THE  POLICY  HAS  BEEN
REPLACED  BY  THE   INSURED  OR  CANCELED  AT  THE
INSURED'S REQUEST OR  AFTER  THE  POLICY  HAS BEEN
CANCELED AS PROVIDED IN THIS CHAPTER, AND SECTIONS
7, 15 AND  22  OF  THIS  ACT.  NOTWITHSTANDING THE
PROVISIONS  OF THIS  SUBDIVISION,  EARNED  PREMIUM
CLAIMS  ON  POLICIES,   OTHER   THAN   REINSURANCE
AGREEMENTS, SHALL NOT BE EXCLUDED; (C) OBLIGATIONS
TO  INSURERS,  INSURANCE   POOLS  OR  UNDERWRITING
ASSOCIATIONS AND THEIR  CLAIMS  FOR  CONTRIBUTION,
INDEMNITY OR SUBROGATION,  EQUITABLE OR OTHERWISE;
AND (D) ANY  CLAIM  WHICH  IS  IN  EXCESS  OF  ANY
APPLICABLE LIMITS PROVIDED IN THE INSURANCE POLICY
ISSUED BY THE INSOLVENT INSURER.
    [(3) Class 3]  (4)  CLASS  4.  Claims  of  the
federal government except those under class [2] 3.
    [(4) Class 4,  Reasonable]  (5) CLASS 5. DEBTS
DUE EMPLOYEES FOR  SERVICES, BENEFITS, CONTRACTUAL
OR OTHERWISE DUE  ARISING  OUT  OF SUCH REASONABLE
compensation to employees  for  services performed
to the extent  that  they do not exceed two months
of monetary compensation and represent payment for
services performed within  [one  year]  SIX MONTHS
before the filing  of the petition for liquidation
or, if rehabilitation preceded liquidation, within
one year before  the  filing  of  the petition for
rehabilitation. Officers and  directors  shall not
be  entitled to  the  benefit  of  this  priority,
except as otherwise approved by the liquidator and
the court. Such  priority  shall be in lieu of any
other similar priority  which may be authorized by
law as to wages or compensation of employees.
    [(5)  Class 5]  (6)  CLASS  6.  Claims  [under
nonassessable  policies for  unearned  premium  or
other  premium  refunds  and  claims]  of  general
creditors, including claims of ceding and assuming
companies in their  capacity  as  such, and claims
against  the  insurer  for  liability  for  bodily
injury or for injury to or destruction of tangible
property which are not under policies.
    [(6) Class 6] (7) CLASS 7. Claims of any state
or local government,  except those under class [2]
4.  Claims  [,   including   those]  of  any  such
governmental body for  a  penalty  or  forfeiture,
[shall be allowed  in  this class] BUT only to the
extent of the  pecuniary  loss  sustained from the
act, transaction or  proceeding  out  of which the
penalty or forfeiture  arose,  with reasonable and
actual costs occasioned  thereby. The remainder of
such claims shall  be  postponed  to  the class of
claims under subdivision (8) of this subsection.
    [(7) Class 7.  Claims  filed late or any other
claims other than  claims  under  subdivisions (8)
and (9) of this subsection.]
    (8) Class 8. Surplus or contribution notes, or
similar  obligations,  and   premium   refunds  on
assessable policies, INTEREST ON CLAIMS OF CLASSES
1  TO  7,   INCLUSIVE,   AND   ANY   OTHER  CLAIMS
SPECIFICALLY SUBORDINATED TO THIS CLASS. [Payments
to members of  domestic mutual insurance companies
shall be limited in accordance with law.]
    (9) Class 9.  [The  claims  of shareholders or
other owners in  their  capacity as shareholders.]
CLAIMS OF SHAREHOLDERS OR OTHER OWNERS ARISING OUT
OF THEIR CAPACITY  AS  SHAREHOLDERS  OR OWNERS, OR
ARISING IN ANY  OTHER  CAPACITY OR FACTS EXCEPT AS
THEY MAY BE QUALIFIED IN CLASS 3 OR 4.
    (b) UPON THE  DECLARATION  OF  A DIVIDEND, THE
RECEIVER SHALL APPLY  THE  AMOUNT  OF THE DIVIDEND
AGAINST ANY INDEBTEDNESS  OWED  TO  THE INSURER BY
THE PERSON ENTITLED  TO  THE DIVIDEND. THERE SHALL
BE NO CLAIM  ALLOWED FOR ANY DEDUCTIBLE CHARGED BY
A  GUARANTY ASSOCIATION  OR  ENTITY  PERFORMING  A
SIMILAR FUNCTION.
    [(b)] (c) Every claim under a separate account
agreement providing, in effect, that the assets in
the separate account  shall not be chargeable with
liabilities arising out  of  any other business of
the insurer shall  be  satisfied out of the assets
in the separate  account  equal  to  the  reserves
maintained in such account for such agreement and,
to  the  extent,  if  any,  not  fully  discharged
thereby, shall be  treated  as a class [2] 3 claim
against  the estate.  For  the  purposes  of  this
section, the "insurer's  estate"  shall  mean  the
general assets of  such  company  less  any assets
held  in  separate   accounts  that,  pursuant  to
section 38a-433 or  38a-459,  AS  AMENDED, are not
chargeable with liabilities  arising  out  of  any
other business of the insurer.
    Sec.  24.  Section   38a-945  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) The liquidator  shall  review  all  claims
duly filed in  the liquidation and shall make such
further investigation as  [he  shall  deem] DEEMED
necessary.  [He]  THE   LIQUIDATOR  may  compound,
compromise or in  any  other  manner negotiate the
amount for which claims will be recommended to the
court except where  the  liquidator is required by
law to accept  claims  as settled by any person or
organization, including any  guaranty association.
[or  foreign  guaranty   association.]  Unresolved
disputes shall be  determined  pursuant to section
38a-941,  AS AMENDED  BY  THIS  ACT.  As  soon  as
practicable,  he shall  present  to  the  court  a
report of the  claims against the insurer with his
recommendations. The report shall include the name
and address of each claimant and the amount of the
claim finally recommended,  if any. If the insurer
has issued annuities  or  life insurance policies,
the liquidator shall  report  the persons to whom,
according to the  records  of the insurer, amounts
are  owed  as   cash  surrender  values  or  other
investment value and the amounts owed.
    (b)  The court  may  approve,  disapprove,  or
modify, the report  on  claims  by the liquidator.
Such reports as  are  not  modified  by  the court
within a period of sixty days following submission
by  the  liquidator   shall   be  treated  by  the
liquidator as allowed  claims,  subject thereafter
to later modification  or  to  rulings made by the
court pursuant to  section 38a-941, AS AMENDED. No
claim under a policy of insurance shall be allowed
for an amount  in  excess of the applicable policy
limits.
    (c)  AFTER GIVING  DUE  CONSIDERATION  TO  THE
NATURE OF THE  POLICIES  THAT  WERE  SOLD  BY  THE
INSURER, AND THE NUMBER OF CLAIMS BY POLICYHOLDERS
FOR PROTECTION UNDER  THEIR  POLICIES,  AND  AFTER
CONSIDERING ACTUARIAL ESTIMATES  THAT  SUBSTANTIAL
AMOUNTS OF INCURRED BUT NOT REPORTED LOSSES EXIST,
THE LIQUIDATOR MAY,  BUT  NEED  NOT,  FORMULATE  A
PROPOSAL, SUBJECT TO  THE APPROVAL OF THE COURT TO
ALLOW SUCH CLAIMS.  THE  PROPOSAL  MAY ALLOCATE OR
ATTRIBUTE ALL OR A PORTION OF THE INCURRED BUT NOT
REPORTED   LOSSES   TO   INDIVIDUAL   POLICYHOLDER
CLAIMANTS ON A BASIS OF REASONABLE EXPERT OPINION.
THE  COURT SHALL  APPROVE  THE  PROPOSAL  AND  THE
ALLOWANCE OF THE  CLAIMS  UNLESS IT FINDS THAT THE
BASIS OF ALLOCATION IS ARBITRARY OR CAPRICIOUS.
    (d) THE LIQUIDATOR  IS NOT REQUIRED TO PROCESS
CLAIMS FOR ANY  CLASS  UNTIL IT APPEARS REASONABLY
LIKELY  THAT  ASSETS   WILL  BE  AVAILABLE  FOR  A
DISTRIBUTION  TO  THAT   CLASS.   IF   THERE   ARE
INSUFFICIENT  ASSETS  TO  JUSTIFY  PROCESSING  ALL
CLAIMS FOR ANY CLASS LISTED IN SECTION 38a-944, AS
AMENDED, THE LIQUIDATOR  SHALL REPORT THE FACTS TO
THE COURT AND  MAKE SUCH RECOMMENDATIONS AS MAY BE
APPROPRIATE  FOR HANDLING  THE  REMAINDER  OF  THE
CLAIMS.
    Sec.  25.  Section   38a-947  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a)   All   unclaimed    funds    subject   to
distribution remaining in  the  liquidator's hands
when [he] THE  LIQUIDATOR is ready to apply to the
court   for  discharge,   including   the   amount
distributable   to  any   creditor,   shareholder,
member, or other  person  who is unknown or cannot
be  found,  shall  be  deposited  with  the  State
Treasurer,  and shall  be  paid  without  interest
except  in accordance  with  section  38a-944,  AS
AMENDED, to the  person  entitled thereto or [his]
THAT  PERSON'S  legal  representative  upon  proof
satisfactory to the  State  Treasurer of his right
thereto. Any amount  on deposit not claimed within
six years from  the  discharge  of  the liquidator
shall be deemed  to  have been abandoned and shall
be escheated without  formal  escheat  proceedings
and  be  deposited   in   the  General  Fund.  THE
LIQUIDATOR MAY ELECT  TO  APPLY  TO  THE COURT FOR
AUTHORITY TO HOLD  THE  UNCLAIMED FUNDS SUBJECT TO
DISTRIBUTION   FOR  A   PERIOD   OF   TWO   YEARS.
THEREAFTER, ANY UNCLAIMED FUNDS MAY BE DISTRIBUTED
TO APPROVED CLAIMANTS WHO HAVE PREVIOUSLY RECEIVED
A DISTRIBUTION, IF IT IS ECONOMICALLY FEASIBLE FOR
THE LIQUIDATOR TO  MAKE  THE  DISTRIBUTION, OR THE
LIQUIDATOR MAY APPLY  TO  THE COURT FOR PERMISSION
FOR THE FUNDS TO BE HELD BY THE STATE TREASURER IN
AN ACCOUNT ON  BEHALF  OF  THE COMMISSIONER IN HIS
CAPACITY AS RECEIVER  FOR  THE  PURPOSE AND USE OF
DEFRAYING THE COSTS AND EXPENSES OF ADMINISTRATION
OF OTHER INSOLVENT  INSURERS  FOR  WHICH THERE ARE
INSUFFICIENT ASSETS TO FUND THE COSTS AND EXPENSES
OF ADMINISTRATION.
    (b) All funds  withheld  pursuant  to  section
38a-939,  AS  AMENDED   BY   THIS   ACT,  and  not
distributed shall upon discharge of the liquidator
be deposited with  the State Treasurer and paid by
him in accordance with section 38a-944, AS AMENDED
BY THIS ACT.  Any sums remaining which pursuant to
section 38a-944, AS  AMENDED  BY  THIS  ACT, would
revert to the  undistributed assets of the insurer
shall be transferred  to  the  State Treasurer and
become the property  of the state under subsection
(a), unless the  commissioner  in  his  discretion
petitions  the court  to  reopen  the  liquidation
pursuant to section 38a-949.
    Sec.  26.  Section   38a-952  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    (a) If a  domiciliary  liquidator has not been
appointed,  the  commissioner  may  apply  to  the
Superior Court by  verified  petition for an order
directing  [him]  THE   COMMISSIONER   to  act  as
conservator to conserve the property FOUND IN THIS
STATE of an  alien  insurer  not domiciled in this
state or PROPERTY FOUND IN THIS STATE OF a foreign
insurer  on any  one  or  more  of  the  following
grounds:  (1)  Any  of  the  grounds  pursuant  to
section 38a-914; (2)  that any of its property has
been  sequestered  by   official   action  in  its
domiciliary state or  in any other state; (3) that
enough of its  property  has been sequestered in a
foreign country to  give  reasonable cause to fear
that the insurer  is  or may become insolvent; (4)
that its certificate  of  authority to do business
in this state  has  been  revoked or that none was
ever issued; and  (5)  that there are residents of
this state with  outstanding claims or outstanding
policies.
    (b)  When  an  order  is  sought  pursuant  to
subsection (a) of  this  section,  the court shall
cause the insurer to be given such notice and time
to respond [thereto]  as  is  reasonable under the
circumstances.
    (c) The court  may issue the order in whatever
terms it shall  deem  appropriate.  The  filing or
recording of the  order  with  the  clerk  of  the
superior court of  the  judicial  district  or the
recorder  of  deeds  of  the  town  in  which  the
principal business of  the  company  is located or
the country in which its principal office or place
of  business is  located  shall  impart  the  same
notice as a  deed,  bill of sale or other evidence
of title duly filed or recorded with that recorder
of deeds would have imparted.
    (d) The conservator  may  at any time petition
for and the  court  may grant an order pursuant to
section 38a-953 to  liquidate  assets of a foreign
or  alien  insurer   under  conservation,  or,  if
appropriate,  for an  order  pursuant  to  section
38a-955, to be  appointed  ancillary receiver. THE
COMMISSIONER  SHALL BE  ENTITLED  TO  REQUEST  THE
ADMINISTRATIVE JUDGE OF THE SUPERIOR COURT FOR THE
JUDICIAL  DISTRICT  OF   HARTFORD-NEW  BRITAIN  TO
APPOINT A SINGLE  JUDGE TO SUPERVISE THE ANCILLARY
PROCEEDING AND HEAR  ANY  CASES  OR  CONTROVERSIES
ARISING  OUT  OF   OR  RELATED  TO  THE  ANCILLARY
PROCEEDING. ANCILLARY PROCEEDINGS  SHALL BE EXEMPT
FROM ANY DORMANCY OR SIMILAR PROGRAM MAINTAINED BY
THE COURT FOR THE EARLY CLOSURE OF CIVIL ACTIONS.
    (e) The conservator  may  at any time petition
the court for an order terminating conservation of
THE PROPERTY OF  an  insurer.  If  the court finds
that the conservation  is  no longer necessary, it
shall  order  that  the  insurer  be  restored  to
possession of its  property and the control of its
business. The court may also make [such] A finding
and issue [such]  AN order at any time upon motion
of any interested  party, but if [such] THE motion
is denied all costs shall be assessed against such
party.
    Sec.  27.  Section   38a-961  of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    If an ancillary  receiver  in another state or
foreign country, whether  called  by  that name or
not,  fails  to   transfer   to   the  domiciliary
liquidator in this  state  any  assets  within his
control other than  special  deposits,  diminished
only   by   the    expenses   of   the   ancillary
receivership, if any,  the  claims  filed  in  the
ancillary receivership, other than special deposit
claims or secured  claims,  shall be placed in the
class  of  claims  pursuant  to  [subsection  (g)]
SUBDIVISION  (8)  OF  SUBSECTION  (a)  of  section
38a-944, AS AMENDED BY THIS ACT.
    Sec. 28. Subdivision  (9)  of section 38a-1 of
the general statutes is repealed and the following
is substituted in lieu thereof:
    (9) "Insolvency" or "insolvent" means, for any
insurer, that it  is unable to pay its obligations
when they are  due, or when its admitted assets do
not exceed its  liabilities  plus  the greater of:
(A) [Any capital]  CAPITAL and surplus required by
law for its  organization AND CONTINUED OPERATION;
or (B) the  total  par  or  stated  value  of  its
authorized and issued  capital stock. For purposes
of this subdivision  "liabilities"  shall  include
but not be limited to reserves required by statute
or by regulations  adopted  by the commissioner or
specific requirements imposed  by the commissioner
upon a subject company at the time of admission or
subsequent thereto.
    Sec.  29.  Section   38a-69   of  the  general
statutes  is  repealed   and   the   following  is
substituted in lieu thereof:
    Except as otherwise  provided  in  title  38a,
sections  38a-11,  AS   AMENDED,  38a-50,  38a-52,
[38a-65,] 38a-70 to  38a-76,  inclusive, 38a-81 to
38a-83,   inclusive,   and    38a-153,   and   the
regulations  adopted to  implement  said  sections
apply  to  all   insurers,  including  reinsurers,
licensed to do business in this state.
    Sec. 30. Subdivision  (15)  of section 38a-816
of the general  statutes, as amended by public act
97-95, section 3  of public act 97-126 and section
13 of public  act  97-202,  is  repealed  and  the
following is substituted in lieu thereof:
    (15) Failure to pay accident and health claims
within forty-five days of receipt by an insurer of
the  claimant's proof  of  loss  form  unless  the
Insurance   Commissioner   determines    that    a
legitimate   dispute  exists   as   to   coverage,
liability or damages  or  that  the  claimant  has
fraudulently caused or  contributed  to  the loss.
Any insurer who  fails  to pay such a claim within
the forty-five-day period  shall  pay the claimant
the amount of such claim plus interest at the rate
of fifteen per  cent per annum, in addition to any
other penalties which  may  be imposed pursuant to
sections 38a-11, AS  AMENDED,  38a-25, AS AMENDED,
38a-41 to 38a-53,  inclusive,  38a-57  to  38a-60,
inclusive, 38a-62 to  [38a-65]  38a-64, inclusive,
38a-76,  38a-83,  38a-84,   38a-117   to  38a-124,
inclusive, 38a-129 to  38a-140, inclusive, 38a-146
to  38a-155,  inclusive,   38a-283,   38a-288   to
38a-290, inclusive, 38a-319,  38a-320, AS AMENDED,
38a-459, AS AMENDED,  38a-464, 38a-815 to 38a-819,
inclusive,  AS  AMENDED,   38a-824   to   38a-826,
inclusive,  and  38a-828  to  38a-831,  inclusive.
Whenever the interest  due  a claimant pursuant to
this section is  less than one dollar, the insurer
shall   deposit  such   amount   in   a   separate
interest-bearing account in which all such amounts
shall be deposited.  At  the  end of each calendar
year each such  insurer  shall  donate one-half of
such  amount  to  The  University  of  Connecticut
Health  Center and  one-half  of  such  amount  to
Uncas-on-Thames Hospital.
    Sec. 31. Subsection  (f) of section 38a-88a of
the general statutes,  as  amended by section 1 of
public act 97-292,  is  repealed and the following
is substituted in lieu thereof:
    (f) The credit  allowed by this section may be
claimed only with  respect  to  an income year for
which  a certification  of  continued  eligibility
required under subsection  (g) of this section has
been issued. If,  with  respect  to  any  year for
which  a  tax   credit  is  claimed,  any  subject
insurance business ceases at any time to employ at
least twenty-five per cent of its total work force
in  new  jobs,   then,   except   as  provided  in
subsection (g) of this section, the entitlement to
the credit allowed  by  this  section shall not be
allowed  for  the   taxable  year  in  which  such
employment ceases, and  there  shall  not be a pro
rata application of  the  credit  to  such taxable
year; provided, if  the  reason for such cessation
is the dissolution  of  such insurance business in
bankruptcy or delinquency  proceeding,  as defined
in [subsection (d) of] section 38a-905, AS AMENDED
BY THIS ACT, the credit shall be allowed.
    Sec. 32. Sections  38a-65  and  38a-316 of the
general statutes are repealed.

Approved June 8, 1998