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An Act
ENROLLED SENATE
BILL NO. 1916 By: Reinhardt of the Senate
and
Tedford of the House
An Act relating to the Insurance Department; amending
36 O.S. 2021, Sections 301, 1802, 1804, and 1805,
which relate to supervisors and conservators of
insurers; creating certain division within the
Insurance Department; defining terms; modifying
definitions; establishing certain powers for certain
supervisor; updating statutory language; establishing
certain powers for certain conservator; updating
statutory references; allowing the Insurance
Commissioner to employ or contract with certain
persons; establishing certain expenses as fixed by
the Commissioner; allowing the Commissioner to audit
certain persons or books; establishing certain
expenses as cost of administration; prohibiting
records to be considered certain records; prohibiting
disclosure of certain records in certain situations;
construing provisions; establishing immunity of
certain persons; amending 36 O.S. 2021, Sections
1901, as last amended by Section 1, Chapter 371,
O.S.L. 2023, and 1914 (36 O.S. Supp. 2025, Section
1901), which relate to rehabilitation and
liquidation; defining terms; modifying definitions;
prohibiting records to be considered certain records;
prohibiting disclosure of certain records in certain
situations; construing provisions; allowing the
Commissioner to employ or contract with certain
persons; establishing certain expenses as fixed by
the Commissioner; allowing the Commissioner to audit
certain persons or books; establishing certain
expenses as cost of administration; construing
provisions; authorizing the Oklahoma Receivership
Office to deposit certain funds; allowing combining
ENR. S. B. NO. 1916 Page 2
of certain funds; establishing use of certain funds;
establishing certain immunity and indemnification;
amending 36 O.S. 2021, Sections 1927.1 and 1937,
which relate to rehabilitation and liquidation;
updating statutory language; updating statutory
references; establishing purpose of certain funds for
certain immunity and indemnification obligations;
establishing certain protections for certain
contracted persons; making language gender neutral
providing for codification; and providing an
effective date.
SUBJECT: Insurance Department
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2021, Section 301, is
amended to read as follows:
Section 301. A. The Insurance Department of the State of
Oklahoma is hereby created, and shall consist of such divisions,
sections, bureaus, offices, and positions as may be established by
the Insurance Commissioner, or by law. The Insurance Commissioner
shall be the chief executive officer of the Insurance Department.
The powers and duties of the Insurance Commissioner shall be those
created by the Oklahoma Insurance Code. The Insurance Department
shall be situated in one area in the State Capitol or some other
location conveniently accessible to the general public subject to
the provisions of Sections 63 and 94 of Title 74 of the Oklahoma
Statutes and Section 580:20-13-5 of the Oklahoma Administrative
Code.
B. There is hereby established a division within the Department
to handle the administration and operation of supervisions,
conservatorships, and receiverships in accordance with the
provisions of Sections 1801 through 1938 of this title. The
division shall be under the direction of the Commissioner and any
appointed supervisor or conservator. The Commissioner shall take
all appropriate actions necessary to ensure a smooth conversion of
ENR. S. B. NO. 1916 Page 3
all existing supervisions, conservatorships, and receiverships to
the division by no later than January 1, 2028.
SECTION 2. AMENDATORY 36 O.S. 2021, Section 1802, is
amended to read as follows:
Section 1802. As used in Article 18 of the Insurance Code, the
following words and terms set forth below shall have the meanings
ascribed to them unless the context otherwise indicates this act:
1. “Commissioner” means the Insurance Commissioner of this
state;
2. “Consent” means any agreement by the insurer to either
supervision or conservatorship;
3. “Conservator” means the Commissioner or his or her designee;
4. “Exceeded its powers” includes, but is not limited to, the
following circumstances:
a. an insurer’s refusal to permit examination of its
books, papers, accounts, records, or affairs by the
Commissioner, his or her designee, or duly
commissioned examiners; or if such insurer being
organized in the State of Oklahoma removes from the
state such books, papers, accounts, or records
necessary for an examination of such insurer,
b. an insurer’s failure to promptly answer inquiries
authorized by paragraph 7 of Section 1905 of this
title,
c. an insurer’s neglect or refusal to observe an order of
the Commissioner to make good, within the time
prescribed by law, any prohibited deficiency in its
capital or surplus,
d. an insurer, without first obtaining written approval
of the Commissioner, by contract or otherwise:
ENR. S. B. NO. 1916 Page 4
(1) totally reinsuring its entire outstanding
business, or
(2) merging or consolidating substantially its entire
property or business with another approved
insurer, or
e. an insurer continuing to write business after its
license has been revoked or suspended;
5. “Insolvent” or “insolvency” means any actual or threatened
insurer delinquency including, but not limited to, any one or more
of the following circumstances:
a. an insurer’s required surplus or capital is impaired
to an extent prohibited by law,
b. an insurer continues to write new business when it is
not possessed of the surplus or capital required of it
by law,
c. the business of any such insurer is being conducted
fraudulently,
d. any such insurer attempts to dissolve or liquidate
without first having made provisions, satisfactory to
the Commissioner, for liabilities arising from
policies of insurance issued by such insurer, or
e. the insurer has made investments in violation of the
Oklahoma Insurance Code or has knowingly over-valued
insurer’s assets;
6. “Insurer” is a person, organization, association or company,
authorized or unauthorized, admitted or nonadmitted, acting as an
insurer, or as principal or agent of an insurer, including any
domestic, foreign or alien insurer, as defined in Article 6 of the
Insurance Code, and including stock companies, reciprocals or
insurance exchanges, Lloyds Associations, fraternal benefit
societies, stipulated premium companies, and mutual companies of all
kinds, including statewide mutual assessment corporations, local
mutual aids, burial associations, county mutual insurance companies
ENR. S. B. NO. 1916 Page 5
and farm mutual insurance companies, and health maintenance
organizations;
3. “Insolvent” or “insolvency” means any actual or threatened
insurer delinquency including, but not limited to, any one or more
of the following circumstances:
a. an insurer’s required surplus or capital is impaired
to an extent prohibited by law,
b. an insurer continues to write new business when it is
not possessed of the surplus or capital required of it
by law,
c. the business of any such insurer is being conducted
fraudulently,
d. any such insurer attempts to dissolve or liquidate
without first having made provisions, satisfactory to
the Commissioner, for liabilities arising from
policies of insurance issued by such insurer; or
e. the insurer has made investments in violation of the
Insurance Code or has knowingly over-valued insurer’s
assets;
4. “Exceeded its powers” includes, but is not limited to, the
following circumstances:
a. an insurer’s refusal to permit examination of its
books, papers, accounts, records or affairs by the
Commissioner, his or her deputy or duly-commissioned
examiners; or if such insurer being organized in the
State of Oklahoma removes from the state such books,
papers, accounts or records necessary for an
examination of such insurer,
b. an insurer’s failure to promptly answer inquiries
authorized by Section 1905(6) of this title,
c. an insurer’s neglect or refusal to observe an order of
the Commissioner to make good, within the time
ENR. S. B. NO. 1916 Page 6
prescribed by law, any prohibited deficiency in its
capital or surplus,
d. an insurer, without first obtaining written approval
of the Commissioner, by contract or otherwise:
(1) totally reinsuring its entire outstanding
business, or
(2) merging or consolidating substantially its entire
property or business with another approved
insurer, or
e. an insurer continuing to write business after its
license has been revoked or suspended; and
5. “Consent” means any agreement by the insurer to either
supervision or conservatorship
7. “Oklahoma Receivership Office” means a division within the
Insurance Department that handles the administration and operation
of supervisions, conservatorships, and receiverships in accordance
with the provisions of Sections 1801 through 1938 of this title; and
8. “Supervisor” means the Commissioner or his or her designee.
SECTION 3. AMENDATORY 36 O.S. 2021, Section 1804, is
amended to read as follows:
Section 1804. A. During any period of supervision, the
Commissioner may appoint a supervisor for such insurer and provide
that the insurer may not do any of the following things without the
prior approval of the Commissioner or his the supervisor:
1. Dispose, convey or encumber any of its assets or its
business in force;
2. Withdraw funds from bank accounts;
3. Lend funds;
4. Invest funds;
ENR. S. B. NO. 1916 Page 7
5. Transfer property;
6. Incur any debt, obligation or liability;
7. Merge or consolidate with another company; or
8. Enter into any new reinsurance contract or treaty.
B. In addition, the Commissioner or the supervisor may require
of the insurer, the following:
1. Periodic actuarial reviews; and
2. That the insurer limit or cease writing certain lines of
insurance.
C. Within the limits of duties imposed upon them, appointed
supervisors shall possess all the powers given to a supervisor and,
in the exercise of those powers, shall be subject to all duties,
powers, and limitations imposed upon the supervisor.
SECTION 4. AMENDATORY 36 O.S. 2021, Section 1805, is
amended to read as follows:
Section 1805. A. If, after notice and hearing, at the
conclusion of the 90-day ninety-day period the Insurance
Commissioner determines that the insurer has failed to comply with
his the Commissioner’s lawful requirements, or upon consent of the
insurer, he the Commissioner may appoint a conservator, who. Within
the limits of the duties imposed upon the conservator, the
conservator shall possess all the powers given to a conservator and,
in the exercise of those powers, shall be subject to all of the
duties, powers, and limitations imposed upon the conservator. The
conservator shall immediately:
1. Take charge of such insurer and all of the property, books,
records and effects;
2. Conduct its business; and
ENR. S. B. NO. 1916 Page 8
3. Take such other steps toward the removal of the causes and
conditions which have necessitated such order, as the Commissioner
may direct.
B. During the pendency of conservatorship, the conservator
shall make such reports as may be required by the Commissioner, and
may:
1. Take all necessary measures to preserve, protect and recover
any assets or property of such insurer including claims or causes of
action belonging to orwhich or which may be asserted by such insurer
in his or her own name as conservator; and
2. File, prosecute and defend any legal actions which have been
filed, or which may thereafter be filed, by or against such insurer,
as he the conservator deems necessary to protect all of the
interested parties or any property affected thereby. The
conservator shall file all quarterly and annual reports required by
the Oklahoma Insurance Code and in the same manner as the insurer.
C. If upon appointment of a conservator or at any time during
the pendency of such conservatorship it appears that the insurer can
best be protected by reinsuring the same, the conservator may, with
the approval of the Commissioner, after appraisal of all assets of
the insurer:
1. Reinsure all or part of such insurer’s policies or
certificates of insurance with any solvent insurers authorized to
transact business in this state; and
2. To the extent that such insurer is possessed of reserves
attributable to such policies or certificates of insurance, transfer
to the reinsuring company such reserves or any portion thereof as
may be required to consummate the reinsurance of such policies,
which transfer of reserves shall not be deemed a preference of
creditors.
D. If the Commissioner is satisfied that the insurer is not in
condition to continue business in the interest of its policy or
certificate holders, under the conservator, the Commissioner shall
apply to the appropriate court for an order appointing him or her as
receiver for the insurer, under the provisions of Article 18
ENR. S. B. NO. 1916 Page 9
Sections 1801 through 1938 of this title. It shall be in the
discretion of the Commissioner to determine whether or not he or she
will operate the insurance company through a conservator, as
provided above, or apply for an order appointing him the
Commissioner receiver.
E. The cost incident to the supervisor’s and conservator’s
service The Commissioner may employ or contract with an appointed
supervisor or conservator, legal counsel, actuaries, accountants,
appraisers, consultants, clerks, assistants, or other personnel as
may be deemed necessary. Any appointed supervisor or conservator
with whom the Commissioner contracts pursuant to this subsection
shall be considered to be an agent of the Commissioner only in the
Commissioner’s capacity as supervisor or conservator and shall not
be considered an agent of the state.
F. All expenses of the supervision or conservatorship shall be
fixed by the Commissioner and paid from the assets and funds of the
insurer as the Commissioner may determine. The cost of the
supervisor’s or conservator’s service must shall be reasonable under
the circumstances and shall continue no longer than necessary to
preserve the assets of the insurer, certificate holders and the
policyholders. All legal work required under this act shall be
performed by the Commissioner, his the appointed supervisor or
conservator, the Commissioner’s employees, or special attorneys
employed by the Commissioner. The cost of such attorneys’ services
must shall be reasonable under the circumstances and shall be paid
from the assets and funds of the insurer to the Commissioner.
G. The Commissioner, in his or her discretion, may require
audits to be made of the books of any appointed supervisor or
conservator relating to any supervision or conservatorship
established under this act, and a report of each audit shall be
filed with the Commissioner. The books, records, and other
documents of the supervision or conservatorship shall be made
available to the auditor at any time without notice. The expenses
of each audit shall be considered a cost of administration of the
supervision or conservatorship.
H. The records of an insurer held by the Commissioner,
supervisor, conservator, and his or her employees shall not be:
ENR. S. B. NO. 1916 Page 10
1. Considered records of the Insurance Department;
2. Public records;
3. Subject to subpoena; and
4. Disclosed, except in connection with administrative or
receivership proceedings by the Commissioner.
I. The provisions of any law governing the procurement of goods
and services by the state or an official of the executive branch
shall not apply to any contract entered into by the Commissioner or
the Commissioner’s authorized signatory as conservator or
supervisor.
F. J. The supervision or conservation may continue until the
Commissioner (1) feels certain that the insurer has corrected any
deficiencies that caused the supervision or conservation, or (2) a
receivership has been granted by the Court.
SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1813 of Title 36, unless there
is created a duplication in numbering, reads as follows:
The Insurance Commissioner, his or her employees, current or
former appointed supervisor or conservator, or the supervisor’s or
conservator’s contractors shall:
1. Have no liability and no cause of action of any nature shall
arise against such person for any action taken in performance of his
or her powers and duties pursuant to this act; and
2. Be indemnified to the same extent as a receiver and the
receiver’s employees and contractors are indemnified pursuant to
Section 1937 of Title 36 of the Oklahoma Statutes.
SECTION 6. AMENDATORY 36 O.S. 2021, Section 1901, as
last amended by Section 1, Chapter 371, O.S.L. 2023 (36 O.S. Supp.
2025, Section 1901), is amended to read as follows:
Section 1901. For the purpose of Article 19 of the Oklahoma
Insurance Code As used in this act:
ENR. S. B. NO. 1916 Page 11
1. “Ancillary state” means any state other than a domiciliary
state;
2. “Delinquency proceeding” means any proceeding commenced
against an insurer pursuant to this act for the purpose of
liquidating, rehabilitating, reorganizing, or conserving such
insurer;
3. “Domiciliary state” means the state in which an insurer is
incorporated or organized, or in the case of an insurer incorporated
or organized in a foreign country, the state in which such insurer,
having become authorized to do business in such state, has at the
commencement of delinquency proceedings the largest amount of its
assets held in trust and assets held on deposit for the benefit of
its policyholders or policyholders and creditors in the United
States, and any such insurer deemed to be domiciled in such state;
4. “Foreign country” means territory not in any state;
5. “General assets” means all property, real, personal, or
otherwise, not specifically mortgaged, pledged, deposited, or
otherwise encumbered for the security or benefit of specified
persons or a limited class or classes of persons, and as to such
specifically encumbered property, the term includes all such
property or its proceeds in excess of the amount necessary to
discharge the sum or sums secured. Assets held in trust and assets
held on deposit for the security or benefit of all policyholders or
all policyholders and creditors in the United States shall be deemed
general assets;
6. “Insurer” means any person, firm, corporation, health
maintenance organization, association, or aggregation of persons
doing an insurance business and subject to the insurance supervisory
authority of, or to liquidation, rehabilitation, reorganization, or
conservation by the Insurance Commissioner or the equivalent
insurance supervisory official of another state;
7. “Impairment” or “insolvency” means the capital of a stock
insurer, or limited stock life, accident and health insurer, the net
assets of a Lloyds association, or the surplus of a mutual or
reciprocal insurer, shall be deemed to be impaired and the insurer
ENR. S. B. NO. 1916 Page 12
shall be deemed to be insolvent, when such insurer shall not be
possessed of assets at least equal to all liabilities and required
reserves together with its total issued and outstanding capital
stock if a stock insurer, the net assets if a Lloyds association, or
the minimum surplus if a mutual or reciprocal insurer required by
this Code to be maintained for the kind or kinds of insurance it is
then authorized to transact;
2. “Insurer” means any person, firm, corporation, health
maintenance organizations, association or aggregation of persons
doing an insurance business and subject to the insurance supervisory
authority of, or to liquidation, rehabilitation, reorganization or
conservation by the Insurance Commissioner or the equivalent
insurance supervisory official of another state;
3. “Delinquency proceeding” means any proceeding commenced
against an insurer pursuant to this article for the purpose of
liquidating, rehabilitating, reorganizing or conserving such
insurer;
4. “State” means any state of the United States and also the
District of Columbia and Puerto Rico;
5. “Foreign country” means territory not in any state;
6. “Domiciliary state” means the state in which an insurer is
incorporated or organized, or in the case of an insurer incorporated
or organized in a foreign country, the state in which such insurer,
having become authorized to do business in such state, has at the
commencement of delinquency proceedings, the largest amount of its
assets held in trust and assets held on deposit for the benefit of
its policyholders or policyholders and creditors in the United
States, and any such insurer is deemed to be domiciled in such
state;
7. “Ancillary state” means any state other than a domiciliary
state;
8. “Reciprocal state” means any state other than this state
that has enacted a law that sets forth a scheme for the
administration of an insurer in receivership by the state’s
insurance commissioner or comparable insurance regulatory official;
ENR. S. B. NO. 1916 Page 13
9. “General assets” means all property, real, personal or
otherwise, not specifically mortgaged, pledged, deposited or
otherwise encumbered for the security or benefit of specified
persons or a limited class or classes of persons, and as to such
specifically encumbered property the term 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 assets held
on deposit for the security or benefit of all policyholders or all
policyholders and creditors in the United States shall be deemed
general assets;
10. “Preferred claim” means any claim with respect to which the
law of the state or of the United States accords priority of
payments from the general assets of the insurer;
8. “Oklahoma Receivership Office” means a division within the
Insurance Department that handles the administration and operation
of supervisions, conservatorships, and receiverships in accordance
with the provisions of Sections 1801 through 1938 of this title;
9. “Preferred claim” means any claim with respect to which the
laws of the state or of the United States accords priority of
payments from the general assets of the insurer;
10. “Receiver” means a receiver, liquidator, rehabilitator, or
conservator as the context may require;
11. “Reciprocal state” means any state other than this state
that has enacted a law that sets forth a scheme for the
administration of an insurer in receivership by the state’s
insurance commissioner or comparable insurance regulatory official;
12. “Secured claim” means any claim secured by mortgage, trust
deed, pledge, deposit as security, escrow, or otherwise, but not
including special deposit claim or claims against general assets.
The term also includes claims that more than four (4) months prior
to the commencement of delinquency proceedings in the state of the
insurer’s domicile have become liens upon specific assets by reason
of judicial process;
ENR. S. B. NO. 1916 Page 14
11. 13. “Special deposit claim” means any claim secured by a
deposit made pursuant to statute for the security or benefit of a
limited class or classes of persons, but not including any general
assets;
12. “Secured claim” means any claim secured by mortgage, trust
deed, pledge, deposit as security, escrow, or otherwise, but not
including special deposit claim or claims against general assets.
The term also includes claims which more than four (4) months prior
to the commencement of delinquency proceedings in the state of the
insurer’s domicile have become liens upon specific assets by reason
of judicial process;
13. “Receiver” means receiver, liquidator, rehabilitator, or
conservator as the context may require; and
14. “State” means any state, territory, or district of the
United States including, but not limited to, the District of
Columbia and Puerto Rico; and
15. “Qualified financial contract” means a commodity contract,
forward contract, repurchase agreement, securities contract, swap
agreement, and any similar agreement the Commissioner determines by
rule, regulation, resolution, or order to be a qualified financial
contract.
SECTION 7. AMENDATORY 36 O.S. 2021, Section 1914, is
amended to read as follows:
Section 1914. A. Whenever under this article Section 1901
through 1938 of this title a receiver is to be appointed in
delinquency proceedings for a domestic or alien insurer, the court
shall appoint the Insurance Commissioner as the receiver. The court
shall order the Insurance Commissioner forthwith to take possession
of the assets of the insurer and to administer the same under the
orders of the court.
B. 1. As domiciliary receiver, the Insurance Commissioner
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, wherever located, as of the date of entry of
the order directing the Commissioner to rehabilitate or liquidate a
ENR. S. B. NO. 1916 Page 15
domestic insurer or to liquidate the United States branch of an
alien insurer domiciled in this state, and the Commissioner shall
have the right to recover the same and reduce the same to
possession; except that ancillary receivers in reciprocal states
shall have, as to assets located in their respective states, the
rights and powers which are herein prescribed for ancillary
receivers appointed in this state as to assets located in this
state.
2. The records of an insurer held by the Commissioner as
receiver, the assistant receiver, and his or her employees, shall
not be:
a. considered records of the Insurance Department,
b. public records,
c. subject to subpoena, and
d. disclosed except in connection with administrative or
receivership proceedings by the Commissioner.
C. The recording of a certified copy of the order directing
possession to be taken in the office of the county clerk of the
county where the proceedings are pending shall impart the same
notice as would be imparted by a deed, bill of sale, or other
evidence of title duly recorded or filed.
D. The Insurance Commissioner as domiciliary receiver shall be
responsible for the proper administration of all assets coming into
the Commissioner’s possession or control. The court may at any time
require a bond from the Commissioner or any assistants or deputies
if deemed desirable for the protection of the assets.
E. Upon taking possession of the assets of an insurer, the
domiciliary receiver shall, subject to the direction of the court,
immediately proceed to conduct the business of the insurer or to
take such steps as are authorized by this article for the purpose of
rehabilitating, liquidating, or conserving the affairs or assets of
the insurer.
ENR. S. B. NO. 1916 Page 16
F. 1. In connection with delinquency proceedings, the
Insurance Commissioner may appoint one or more assistant
commissioners receivers to act for the Commissioner and may employ
such counsel, clerks, and assistants as are deemed necessary. The
Commissioner may employ or contract with an assistant receiver,
legal counsel, actuaries, accountants, appraisers, consultants,
clerks, assistants, or other contractors as may be deemed necessary.
Any appointed assistant receiver with whom the Commissioner
contracts pursuant to this subsection shall be considered to be an
agent of the Commissioner only in the Commissioner’s capacity as
receiver and shall not be considered an agent of the state.
2. The compensation of the assistant commissioners receivers,
counsel, actuaries, accountants, consultants, clerks, assistants, or
deputies other contractors and all expenses of taking possession of
the insurer and of conducting the proceedings shall be fixed by the
receiver, subject to the approval of the court, and shall be paid
out of the funds or assets of the insurer. Within the limits of
duties imposed upon them, assistant commissioners receivers shall
possess all the powers given to the receiver and, in the exercise of
those powers, shall be subject to all of the duties, powers, and
limitations imposed upon the receiver with respect to such
proceedings.
2. 3. The Commissioner, as receiver, is shall be prohibited
from appointing any person who is related to the Commissioner within
the third degree of consanguinity or affinity. Any appointment in
violation of this paragraph is shall be void.
3. 4. The Commissioner, as receiver, is shall be prohibited
from entering into any contract with any person who is related to
the Commissioner within the third degree of consanguinity or
affinity. Any contract in violation of this paragraph is shall be
void.
G. The court, as it seems desirable, may require audits to be
made of the books of the receiver relating to any receivership
established pursuant to this act, and a report of each audit shall
be filed with the receiver and the court. The books, records, and
other documents of the receivership shall be made available to the
auditor at any time without notice. The expenses of each audit
shall be considered a cost of administration of the receivership.
ENR. S. B. NO. 1916 Page 17
H. The provisions of any law governing the procurement of goods
and services by the state or an official of the executive branch
shall not apply to any contract entered into by the Commissioner or
the Commissioner’s authorized signatory as receiver.
SECTION 8. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1914.1 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. The Oklahoma Receivership Office shall be authorized to
deposit funds and assets held prior to the effective date of this
act pursuant to Sections 1901 through 1938 of Title 36 of the
Oklahoma Statutes into one or more accounts or investment accounts,
in one or more state or national banks, saving banks, savings and
loan associations, trust companies, investment firms, or other
appropriate financial institutions. Funds deposited pursuant to
this section may be:
1. Combined to yield the highest rate of return on deposits, or
in any other way to facilitate the efficient operation of the
Oklahoma Receivership Office and the respective receiverships under
its jurisdiction; and
2. Used for the purpose of operating the division, for the
expenses of the respective jurisdiction in accordance with the
provisions of Sections 1901 through 1938 of Title 36 of the Oklahoma
Statutes.
B. Funds deposited pursuant to subsection A of this section
shall be continuing funds, are not funds of this state, the
Insurance Department, or any other agency of this state, and shall
be in no way commingled or combined with funds of this state.
SECTION 9. AMENDATORY 36 O.S. 2021, Section 1927.1, is
amended to read as follows:
Section 1927.1. 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. Before the
members of the next class receive any payment, every claim in each
class shall be:
ENR. S. B. NO. 1916 Page 18
1. Paid in full; or
2. Protected by adequate funds retained for such payment.
Once such funds are approved by the court and paid or retained by
the liquidator, 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. Payment of retained funds
pursuant to court order under this section extinguishes the
potential liability of the receiver to the United States or any
other governmental entity. No subclasses shall be established
within any class except as otherwise provided by law. 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 as provided
in subsection B of this section.
B. 1. Class 1. The reasonable 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 authorized services rendered in
the conservation, rehabilitation or liquidation,
c. any necessary filing or recordation fees,
d. the fees and mileage payable to witnesses, including
experts, and other litigation costs and expenses,
e. authorized reasonable attorney fees and other
professional services rendered in the conservation,
rehabilitation or liquidation, and
f. any reasonable expenses that were incurred in
furtherance of activities that provided a material
economic benefit to the estate.
ENR. S. B. NO. 1916 Page 19
2. Class 2. The administrative expenses of guaranty
associations. For purposes of this section these expenses shall be
the 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 any administrative expenses of a guaranty
association were not reasonable expenses, but were nevertheless paid
out of a statutory deposit or the proceeds of any bond or other
asset located in another state or foreign country, then the court
shall adjudge the Class 3 claims of that association to have been
paid to the extent of the amount of unreasonable expenses thus paid
from those assets.
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, provided that the liquidator shall secure from each of the
associations receiving disbursements pursuant to this section an
ENR. S. B. NO. 1916 Page 20
agreement to return to the liquidator such disbursements, 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.
3. Class 3. All claims under policies including claims of the
federal or any state or local government for losses incurred (“loss
claims”) including third-party claims, claims for unearned premiums,
all claims of a guaranty association for payment of covered claims
or covered obligations of the insurer and all claims of a guaranty
association for reasonable expenses other than those included in
Class 2. All claims under life and health insurance and annuity
policies, 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 obligation 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 foregoing, 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
act. Notwithstanding the provisions of this
paragraph, 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,
ENR. S. B. NO. 1916 Page 21
d. any claim which is in excess of any applicable limits
provided in the insurance policy issued by the
insolvent insurer,
e. any amount accrued as punitive or exemplary damages
unless expressly covered under the terms of the
policy, and
f. tort claims of any kind against the insurer, and
claims against the insurer for bad faith or wrongful
settlement practices.
4. Class 4. Claims of the federal government other than those
claims included in Class 3.
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 (2) months of monetary compensation and
represent payment for services performed within six (6) months
before the filing of the petition for liquidation or, if
rehabilitation preceded liquidation, within one (1) year before the
filing of the petition for rehabilitation. Principal officers and
directors shall not be entitled to the benefit of this priority
except as otherwise approved by the liquidator and the court. This
priority shall be in lieu of any other similar priority which may be
authorized by law as to wages or compensation of employees.
6. Class 6. Claims of any person, including claims of state or
local governments, except those specifically classified elsewhere in
this section.
7. Class 7. Claims for commissions and service fees, and
claims of attorneys for fees and expenses owed them by a person for
services rendered in opposing a formal delinquency proceeding. In
order to prove the claim, the claimant must shall show that the
insurer which is the subject of the delinquency proceeding incurred
such fees and expenses based on its best knowledge, information and
belief, formed after reasonable inquiry indicating opposition was in
the best interests of the person, was well grounded in fact and was
warranted by existing law or a good-faith argument for the
extension, modification or reversal of existing law, and that
ENR. S. B. NO. 1916 Page 22
opposition was not pursued for any improper purpose, such as to
harass or to cause unnecessary delay or needless increase in the
cost of the litigation.
8. Class 8. Claims of any state or local government for a
penalty or forfeiture, 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 paragraph 9 of this subsection.
9. Class 9. Surplus or contribution notes or similar
obligations, premium refunds on assessable policies, interest on
claims of Classes 1 through 8 and any other claims specifically
subordinated to this class.
10. Class 10. a. Claims of shareholders or other owners
arising out of their capacity as shareholders or other owners, or
arising in any other capacity or facts except as they may be
qualified in Class 3 or 4 above; provided, however, that no
shareholder, member or other owner shall be entitled to, or receive,
any distribution from the insolvent insurer’s estate under this
paragraph, if:
(1) a. the intentional wrongdoing, fraud, gross negligence,
negligence or other act, failure to act, transaction
or proceeding of such shareholder, member or owner,
alone or in concert with others, or of a director or
officer of the insolvent insurer, is found by a court
of competent jurisdiction or by the receiver in his or
her reasonable discretion, to have caused, or to have
been a contributing factor to, the insolvency of the
insolvent insurer,
(2) b. funds were collected from the shareholder, member or
other owner, either directly or through an insurance
carrier, fidelity bond issuer or other entity, as a
consequence of, or related to, a claim made or brought
by the receiver of said insurer, or
(3) c. any of the funds available for distribution consist
of punitive damages recovered by the receiver of said
ENR. S. B. NO. 1916 Page 23
estate from any source based upon any claim made or
brought by the receiver.
C. 1. In the event there is no eligible shareholder, member or
other owner entitled to distribution in accordance with this
paragraph section, the remaining funds and other property of the
insolvent insurer’s estate, if any, shall be distributed to a fund
established and held in the name of, and for the use and benefit of,
the receiver, through the Oklahoma Receivership Office or any
similar entity established by the receiver, which shall be used in
the administration of other insurers in rehabilitation or
liquidation.
b. 2. All funds distributed to the receiver under this
paragraph shall be advanced to and utilized by the receiver’s staff
engaged in the rehabilitation or liquidation of insolvent insurance
business companies for the following purposes:
(1) a. the administration of liquidations of estates which
temporarily or permanently do not have the financial
capability to administer the liquidation, including
the prosecution of claims of the receiver, or
(2) b. the prosecution of petitions to place insurers in
rehabilitation or liquidation, or
c. the immunity and indemnification obligations of the
insurer pursuant to Section 1937 of this title.
In the event such 3. Such funds are distributed to or for an
insolvent insurer, the receiver shall obtain from the insurer a
promissory note or other evidence of indebtedness, secured by
collateral if possible, for the amount distributed, which shall be
treated as a Class 1 expense under paragraph 1 of this subsection.
The receiver shall make good-faith efforts to collect reimbursement
of any such loans. No funds distributed to the receiver under this
paragraph shall be used to pay claims other than Class 1 claims
under paragraph 1 of this subsection. The funds are not funds of
the State of Oklahoma this state and are not funds of the Oklahoma
Insurance Department or any other agency of the State of Oklahoma
this state.
ENR. S. B. NO. 1916 Page 24
This paragraph shall apply to the administration of all receivership
estates open and ongoing as of November 1, 2014, and to all
receivership proceedings commenced after November 1, 2014.
C. D. If any claimant of this state, another state or foreign
country shall be entitled to or shall receive a dividend upon his or
her claim out of a statutory deposit or the proceeds of any bond or
other asset located in another state or foreign country, unless such
deposit or proceeds shall have been delivered to the domiciliary
liquidator, then the claimants shall not be entitled to any further
dividend from the receiver until and unless all other claimants of
the same class, irrespective of residence or place of the acts or
contracts upon which their claims are based, shall have received an
equal dividend upon their claims, and after such equalization, such
claimants shall be entitled to share in the distribution of further
dividends by the receiver, along with and like all other creditors
of the same class, wheresoever residing.
D. E. 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.
E. F. This section shall apply to pending and future claims in
existing delinquency proceedings as well as to claims in delinquency
proceedings arising after the effective date of this section.
F. G. If any provision of this section or the application
thereof to any person or circumstances is held invalid, such
invalidity shall not affect other provisions or application of this
section to the extent such other provisions or application can be
given effect without the invalid provision or application.
SECTION 10. AMENDATORY 36 O.S. 2021, Section 1937, is
amended to read as follows:
Section 1937. A. For the purposes of this section the persons
entitled to protection under this section are:
1. The receiver, assistant receiver, and retained counsel
responsible for the conduct of a delinquency proceeding under
ENR. S. B. NO. 1916 Page 25
Article 19 of the Insurance Code, including present and former
receivers; and
2. Their employees meaning all present and former assistant
receivers and attorneys for the receiver appointed by the Insurance
Commissioner and all persons whom the Commissioner, assistant
receiver or retained counsel have employed, or contracted with, to
assist in a delinquency proceeding under Article 19 of the Insurance
Code pursuant to Sections 1901 through 1938 of this title.
Attorneys, accountants, auditors and other professional persons or
firms, who are retained by the receiver as independent contractors
and their employees shall not be considered employees of the
receiver for purposes of this section.
B. If any legal action is commenced against the receiver or any
employee, whether against him such person personally or in his or
her official capacity, alleging property damage, property loss,
personal injury or other civil liability caused by or resulting from
any alleged act, error or omission of the receiver or any employee
arising out of or by reason of their his or her duties or
employment, the receiver and any employee shall be indemnified from
the assets of the insurer for all expenses, attorneys’ fees,
judgments, settlements, decrees or amounts due and owing or paid in
satisfaction of or incurred in the defense of such legal action
unless it is determined upon a final adjudication on the merits that
the alleged act, error or omission of the receiver or employee
giving rise to the claim did not arise out of or by reason of his
duties or employment, or was caused by intentional or willful and
wanton misconduct.
1. Attorneys’ fees and any and all related expenses incurred in
defending a legal action for which immunity or indemnity is
available under this section shall be paid from the assets of the
insurer, as they are incurred, in advance of the final disposition
of such action upon receipt of an undertaking by or on behalf of the
receiver or employee to repay the attorneys’ fees and expenses if it
shall ultimately be determined upon a final adjudication on the
merits that the receiver or employee is not entitled to immunity or
indemnity under this section.
2. Any indemnification for expense payments, judgments,
settlements, decrees, attorneys’ fees, surety bond premiums or other
ENR. S. B. NO. 1916 Page 26
amounts paid or to be paid from the insurer’s assets pursuant to
this section shall be an administrative expense of the insurer.
3. In the event of any actual or threatened litigation against
a receiver or any employee for which immunity or indemnity may be
available under this section, a reasonable amount of funds which in
the judgment of the Insurance Commissioner may be needed to provide
immunity or indemnity shall be segregated and reserved from the
assets of the insurer as security for the payment of indemnity until
such time as all applicable statutes of limitation shall have run
and all actual or threatened actions against the receiver or any
employee have been completely and finally resolved, and all
obligations of the insurer and the Commissioner under this section
shall have been satisfied.
4. In lieu of segregation and reserving of funds, the Insurance
Commissioner shall have the discretion to obtain a surety bond or
make other arrangements which shall enable the Commissioner to fully
secure the payment of all obligations under pursuant to this
section.
C. If any legal action against an employee for which indemnity
may be available under pursuant to this section is settled prior to
final adjudication on the merits, the insurer must shall pay the
settlement amount on behalf of the employee, or indemnify the
employee for the settlement amount, unless the Insurance
Commissioner determines:
1. That the claim did not arise out of or by reason of the
employee’s duties or employment; or
2. That the claim was caused by the intentional or willful and
wanton misconduct of the employee.
D. In any legal action in which the receiver is a defendant,
that portion of any settlement relating to the alleged act, error or
omission of the receiver shall be subject to the approval of the
court before which the delinquency proceeding is pending. The court
shall not approve that portion of the settlement if it determines:
1. That the claim did not arise out of or by reason of the
receiver’s duties or employment; or
ENR. S. B. NO. 1916 Page 27
2. That the claim was caused by the intentional or willful and
wanton misconduct of the receiver.
E. Nothing contained or implied in this section shall operate,
or be construed or applied to deprive the receiver or any employee
of any immunity, indemnity, benefits of law, rights or any defense
otherwise available.
F. 1. No legal action shall lie against the receiver or any
employee based in whole or in part on any alleged act, error or
omission which took place prior to September 1, 1992, unless suit is
filed and valid service of process is obtained prior to September 1,
1993.
2. Subsections B, C, and D of this section shall apply to any
suit which is pending on or filed after September 1, 1992, without
regard to when the alleged act, error or omission took place.
SECTION 11. This act shall become effective November 1, 2026.
ENR. S. B. NO. 1916 Page 28
Passed the Senate the 26th day of March, 2026.
Presiding Officer of the Senate
Passed the House of Representatives the 6th day of May, 2026.
Presiding Officer of the House
of Representatives
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _________
day of ___________________, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of __________________, 20 _______, at _______ o'clock _______ M.
By: _________________________________