ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fourth Legislature

Second Regular Session

House: COM DP 8-0-0-1

HB2645: insurers; insolvency; administration

Sponsor:  Representative Weninger, LD 17

Caucus & COW

Overview

Provides a federal home loan bank an exemption from certain injunctions.

History

Established by the Federal Home Loan Bank Act, the Federal Home Loan Bank System provides its members with a source of funding for: 1) mortgages and asset-liability management; 2) liquidity for a member's short-term needs; and 3) additional funds for housing finance and community development.

During a delinquency proceeding involving the liquidation, rehabilitation or reorganization of an insolvent insurer, a court may issue an injunction against an insurer preventing: 1) interference with the receiver or proceeding; 2) the waste of the assets of the insurer; 3) the commencement or prosecution of any actions; 4) the obtaining of preferences, judgments, attachments or other liens; and 5) the making of any levy against the insurer or against its assets (A.R.S. § 20-614).

Law requires all proceedings in which the insolvent insurer is a party to be stayed for six months from the date of insolvency to permit proper defense by the Property and Casualty Guaranty Fund of all pending causes of action as to any covered claim (A.R.S. § 20-676).

Provisions

1.    ☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteAsserts a federal home loan bank cannot be stayed, enjoined or prohibited from exercising or enforcing any right or cause of action against collateral pledged by an insurer member under any pledge, security, collateral or guarantee agreement to which that federal home loan bank is a party. (Sec. 2, 6, 7)

2.    Prohibits a receiver, rehabilitator, liquidator or conservator from voiding any transfer of money or other property arising in connection with any pledge, security, collateral or guarantee agreement with an insurer member unless the transfer was made with actual intent to hinder, delay or defraud either existing or future creditors. (Sec. 5, 8)

3.    Defines federal home loan bank and insurer member. (Sec. 1)

4.    Makes technical changes. (Sec. 1, 2, 3, 4, 5)

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8.    Initials PRB                       Caucus & COW

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