HRS § 432-1-409 - Rehabilitation, liquidation, or conservation of mutual benefit societies

(a) Any rehabilitation, liquidation, or conservation of a mutual benefit society shall be deemed to be the rehabilitation, liquidation, or conservation of an insurance company and shall be conducted under the supervision of the commissioner pursuant to the law governing the rehabilitation, liquidation, or conservation of insurance companies. The commissioner may apply for an order directing the commissioner to rehabilitate, liquidate, or conserve a mutual benefit society upon any one or more grounds set out in article 15 of chapter 431, or, when in the commissioner's opinion, the continued operation of the society would be hazardous either to the members or to the general public. Members shall have the same priority in the event of liquidation or rehabilitation as the law provides to policyholders of an insurer. (b) For purposes of determining the priority of distribution of general assets, claims of members and members' beneficiaries shall have the same priority as established by article 15 of chapter 431 for policyholders and beneficiaries of insureds of insurance companies. If a member is liable to any provider for services provided pursuant to and covered by the health care plan, that liability shall have the status of a member claim for distribution of general assets. Any provider who is obligated by statute or agreement to hold members harmless from liability for services provided pursuant to and covered by a health care plan shall have a priority of distribution of the general assets immediately following that of members and members' beneficiaries as described in this subsection, and immediately preceding the priority of distribution described in article 15 of chapter 431. [L 1997, c 367, pt of §1]