Formal Proceedings

Section 402-C:36

    402-C:36 Liability of Insurer. –
The amount recoverable by the liquidator from a reinsurer shall not be reduced as a result of delinquency proceedings regardless of whether the reinsurance contract provides, in substance, that in the event of the insolvency of the ceding insurer, the reinsurance shall be payable by the assuming insurer on the basis of the claims allowed against the ceding insurer in the insolvency proceedings, under contract or contracts reinsured without diminution because of the insolvency of the ceding insurer. Such payments shall be made directly to the ceding insurer or to its domiciliary liquidator or receiver except:
I. Where the contract specifically provides another payee of such reinsurance in the event of the insolvency of the ceding insurer; or
II. Where the assuming insurer with the consent of the direct insured or insured has assumed such policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees.

Source. 1969, 272:1. 2003, 218:3. 2005, 248:4, eff. Sept. 12, 2005.