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Clifford v. Concord Insurance Co.
Decided: March 15, 1971.
ROBERT L. CLIFFORD, COMMISSIONER OF INSURANCE OF THE STATE OF NEW JERSEY, PLAINTIFF,
CONCORD INSURANCE COMPANY, A NEW JERSEY CORPORATION, DEFENDANT
Plaintiff brought this action under N.J.S.A. 17:30-1 "for an order granting him possession of the property and business of" defendant. The statute goes on to provide that the Commissioner "retain possession until the company resumes business or its affairs are finally liquidated as hereinafter provided." An order granting possession was signed June 12, 1970.
Chapter 30 of Title 17 says little in a direct way about the principles to be applied and procedures to be followed
in liquidating or rehabilitating an insurance company placed in the Commissioner's charge. However, there is a provision (N.J.S.A. 17:30-2) that:
Upon taking possession of an insurance company, the same procedure shall be followed, so far as may be, as in the case of banks and trust companies of which the commissioner takes possession for similar causes * * *.
The same section from which this language is taken also provides:
The company may, with the consent of the commissioner, resume business at any time after the taking of possession upon conditions approved by him.
The powers of the commissioner to take possession of and administer the affairs of banks are to be found in N.J.S.A. 17:9A-266 et seq.
Defendant Concord Insurance Company has moved for an order (a) restraining the plaintiff from putting into effect a decision to liquidate the defendant, and (b) authorizing the plaintiff to proceed with a plan for liquidation of defendant in conjunction with the creation of a new insurance company which would assume certain liabilities of defendant and take over certain of its assets. The argument on the motion centered about an opinion given by the Attorney General to the Commissioner to the effect that the Commissioner has no legal power to approve of the proposed plan because that plan would involve the use of moneys from the "Motor Vehicle Liability Security Fund" created pursuant to N.J.S.A. 39:6-92 et seq.
I can only refer in a general way to the advice given by the Attorney General to the Commissioner. I have not seen the Attorney General's opinion. He takes the position that until an opinion has been approved for publication it is confidential material. Whether that position is sound in this context or not, it was made clear at the oral argument that
the Attorney General has advised the Commissioner against approval of the plan by reason of the fact that it would, if carried out, leave claims against defendant Concord unpaid which claims would then be payable out of the ...
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