The time required to rehabilitate or completely liquidate a company varies depending on many factors, such as the size of the company, the complexity and length of required litigation, and types of assets.
Rehabilitation |
Liquidation
|
| Board of Directors suspended temporarily – Receiver assumes their authority but can delegate back certain authority at Receiver’s option. |
Company dissolved by Court Order of Liquidation – Receiver assumes authority over company affairs. |
Deputy Receiver, appointed by the court, is in charge. |
Deputy Receiver, appointed by the court, is in charge. |
| Financial activity is carried out through the company’s office systems utilizing its procedures. |
Financial activity is carried out through Receiver’s office after company’s offices are closed, using the Receiver’s procedures. |
| Company pays claims. |
Guaranty associations pay covered policy claims. |
Payments based on court order which provides authority as to what the rehabilitator may pay. |
Payments based on statutes which provide authority as to the priority of payments. |
Marshaling of assets by Receiver (Finding and collecting property or debts due, selling them to convert to cash). |
Marshaling of assets by Receiver (Finding and collecting property or debts due, selling them to convert to cash). |
Suits against insureds are not stayed by statute; may be stayed by court order. The company will continue to settle or defend its insureds. There is no activity by a guaranty association during rehabilitation. |
Suits against insureds may be stayed by guaranty association statute; may be stayed by court order. The appropriate guaranty association defends insureds. |
Suits against the company are stayed by statute. |
Suits against the company are stayed by statute. |
Proof-of-claims forms are not issued in a rehabilitation effort since claims normally continue to be paid. |
Proof-of-claim forms are sent out to potential claimants. Upon return of these forms, the Receiver’s claims staff evaluates the claims. |
Not applicable. |
Evaluated claims are reported to the Second Judicial Circuit Court in Leon County, Florida, and approved for payment subject to objection (the procedure whereby the claimant may disagree with the evaluation). |
Not applicable. |
If objections are unresolved, the Receiver’s Legal Section will set the objection for hearing before the Receivership Court. |
Not applicable. |
When all objections and appeals are concluded, the Receiver calculates the distribution that may be made to claimants. The priority of claims is set out by statute. Upon obtaining court approval of the distribution, the Receiver sends payments to the claimants’ last known addresses. |
Not applicable. |
Undistributed funds are turned over to the Bureau of Unclaimed Property of the Florida Department of Financial Services. |
Either returning a company to sound financial condition or converting the receivership to liquidation concludes rehabilitation. |
The Receiver prepares a final accounting, which is filed with the Receivership Court, and obtains a final order of discharge from the Court. |
