(1) Nothing in this article 20 reduces the liability for unpaid assessments of the insureds of an impaired or insolvent insurer operating under a plan with assessment liability. (2) The association must keep records of all meetings of the board to discuss the activities of the association in carrying out its powers and duties pursuant to section 10-20-108. Records of the meetings may be made public only upon the termination of a liquidation, rehabilitation, or conservation proceeding involving the impaired or insolvent insurer, upon the termination of the impairment or insolvency of the member insurer, or upon the order of a court of competent jurisdiction. Nothing in this subsection (2) limits the duty of the association to render a report of its activities under section 10-20-115. (3) For the purpose of carrying out its obligations under this article 20, the association is deemed a creditor of the impaired or insolvent insurer to the extent of assets attributable to covered policies and covered contracts, reduced by any amounts to which the association is entitled as assignee or subrogee pursuant to section 10-20-108 (12). Assets of the impaired or insolvent insurer attributable to covered policies and covered contracts shall be used to continue all covered policies and covered contracts and pay all contractual obligations of the impaired or insolvent insurer as required by this article 20. "Assets of the impaired or insolvent insurer attributable to covered policies and covered contracts", as used in this subsection (3), means that proportion of the assets that the reserves that should have been established for the policies or contracts bear to the reserves that should have been established for all policies or contracts written by the impaired or insolvent insurer. (3.5) As a creditor of an impaired or insolvent insurer as established in this section and consistent with section 10-3-533, the association and other similar associations are entitled to receive a disbursement of assets out of the marshaled assets from time to time as the assets become available to reimburse the association, as a credit against contractual obligations under this article 20. If the liquidator has not made an application to the receivership court for approval of a proposal to disburse assets out of marshaled assets to guaranty associations having obligations because of the insolvency within one hundred twenty days after a final determination of insolvency of a member insurer by the receivership court, the association may apply to the receivership court for approval of its own proposal to disburse these assets. (4) (a) Prior to the termination of any rehabilitation, conservation, or liquidation proceeding, the court may take into consideration the contributions of the respective parties, including the association, shareholders, owners, certificate holders, or enrollees of the impaired or insolvent insurer, and any other party with a bona fide interest, in making an equitable distribution of the ownership rights of the insolvent insurer. In making a determination under this subsection (4)(a), the court shall consider the welfare of the owners, certificate holders, or enrollees of the continuing or successor member insurer. (b) A distribution shall not be made to stockholders, if any, of an impaired or insolvent insurer until the total amount of valid claims of the association for reimbursement, including interest, of funds expended in carrying out its powers and duties pursuant to section 10-20-108 with respect to the impaired or insolvent insurer have been fully recovered by the association. (5) (a) If an order for rehabilitation or liquidation of a member insurer domiciled in this state has been entered, the receiver appointed under the order has a right to recover on behalf of the member insurer, from any affiliate that controlled it, the amount of distributions, other than stock dividends paid by the member insurer on its capital stock, made at any time during the five years preceding the petition for liquidation, subject to the limitations of subsections (5)(b) to (5)(d) of this section. (b) A distribution described in subsection (5)(a) of this section is not recoverable if the member insurer shows that the distribution, when it was paid, was lawful and reasonable and that the member insurer did not know, and could not reasonably have known, that the distribution might adversely affect the ability of the member insurer to fulfill its contractual obligations. (c) Any person who was an affiliate that controlled the member insurer at the time the distributions were paid is liable up to the amount of distributions the person received. Any person who was an affiliate that controlled the member insurer at the time the distributions were declared is liable up to the amount of the distributions the person would have received if the distributions had been paid immediately. If two or more persons are liable with respect to the same distributions, they are jointly and severally liable. (d) The maximum amount recoverable under this subsection (5) is the amount needed, in excess of all other available assets of the impaired or insolvent insurer, to pay the contractual obligations of the impaired or insolvent insurer. (e) If any person liable pursuant to subsection (5)(c) of this section is insolvent, all of its affiliates that controlled it at the time the distribution was paid are jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent affiliate. (6) Nothing in this article 20 imposes any liability or responsibility on the state of Colorado for the obligations of the life and health insurance protection association or the unpaid claims of impaired or insolvent insurers.
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