124 STAT. 1454 PUBLIC LAW 111–203—JULY 21, 2010 (D) the likely disruptive effect of the determination and such action on the reasonable expectations of creditors, counterparties, and shareholders, taking into account the impact any action under this title would have on financial stability in the United States, including whether the rights of such parties will be disrupted. (d) CORPORATION POLICIES AND PROCEDURES.—As soon as is practicable after the date of enactment of this Act, the Corporation shall establish policies and procedures that are acceptable to the Secretary governing the use of funds available to the Corporation to carry out this title, including the terms and conditions for the provision and use of funds under sections 204(d), 210(h)(2)(G)(iv), and 210(h)(9). (e) TREATMENT OF INSURANCE COMPANIES AND INSURANCE COM- PANY SUBSIDIARIES.— (1) IN GENERAL.—Notwithstanding subsection (b), if an insurance company is a covered financial company or a sub- sidiary or affiliate of a covered financial company, the liquida- tion or rehabilitation of such insurance company, and any sub- sidiary or affiliate of such company that is not excepted under paragraph (2), shall be conducted as provided under applicable State law. (2) EXCEPTION FOR SUBSIDIARIES AND AFFILIATES.—The requirement of paragraph (1) shall not apply with respect to any subsidiary or affiliate of an insurance company that is not itself an insurance company. (3) BACKUP AUTHORITY.—Notwithstanding paragraph (1), with respect to a covered financial company described in para- graph (1), if, after the end of the 60-day period beginning on the date on which a determination is made under section 202(a) with respect to such company, the appropriate regulatory agency has not filed the appropriate judicial action in the appropriate State court to place such company into orderly liquidation under the laws and requirements of the State, the Corporation shall have the authority to stand in the place of the appropriate regulatory agency and file the appropriate judicial action in the appropriate State court to place such company into orderly liquidation under the laws and require- ments of the State. SEC. 204. ORDERLY LIQUIDATION OF COVERED FINANCIAL COMPA- NIES. (a) PURPOSE OF ORDERLY LIQUIDATION AUTHORITY.—It is the purpose of this title to provide the necessary authority to liquidate failing financial companies that pose a significant risk to the finan- cial stability of the United States in a manner that mitigates such risk and minimizes moral hazard. The authority provided in this title shall be exercised in the manner that best fulfills such purpose, so that— (1) creditors and shareholders will bear the losses of the financial company; (2) management responsible for the condition of the finan- cial company will not be retained; and (3) the Corporation and other appropriate agencies will take all steps necessary and appropriate to assure that all parties, including management, directors, and third parties, having responsibility for the condition of the financial company 12 USC 5384. Time period.
