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Posts Tagged ‘Insurance Company’

What does Receivership mean?

Friday, October 25th, 2013

When insurance companies encounter legal or financial troubles which deems them insolvent (unable to pay policyholder claims), state insurance regulators obtain court orders placing them into receivership, a judicial proceeding similar to bankruptcy protection to protect policyholders and creditors. While a company is in Receivership, all of that company’s assets are placed under the control of the department’s Receiver, whose official actions are supervised by the court. Receivership proceedings can be used to rehabilitate troubled companies, or to liquidate them. The Receiver’s primary responsibility is the protection of the policyholders and creditors. The Receivership Division is established in accordance with Section 27-2-50; Code of Alabama, 1975, as amended.