31A-37a-502 - Delinquency.
31A-37a-502. Delinquency.
(1) Except as otherwise provided in this section, Chapter 27a, Insurer Receivership Act,applies to a special purpose financial captive insurance company.
(2) Upon an order of supervision, rehabilitation, or liquidation of a special purposefinancial captive insurance company, the receiver shall manage the assets and liabilities of thespecial purpose financial captive insurance company pursuant to this chapter.
(3) An amount recoverable by the receiver of a special purpose financial captiveinsurance company under a reinsurance contract may not be reduced or diminished as a result ofthe entry of an order of conservation, rehabilitation, or liquidation with respect to a cedinginsurer, notwithstanding a contract or other documentation governing the special purposefinancial captive insurance company insurance securitization.
(4) The following applies notwithstanding Chapter 27a, Insurer Receivership Act, oranother law of this state:
(a) An application, petition, a temporary restraining order, or injunction issued pursuantto Chapter 27a, Insurer Receivership Act, with respect to a ceding insurer does not prohibit thetransaction of business by a special purpose financial captive insurance company, including:
(i) a payment by a special purpose financial captive insurance company made withrespect to a special purpose financial captive insurance company security; or
(ii) an action or proceeding against a special purpose financial captive insurancecompany or its assets.
(b) (i) Subject to Subsection (4)(b)(ii), the commencement of a summary proceedingwith respect to a special purpose financial captive insurance company and an order issued by thecourt in the summary proceeding may not prohibit:
(A) a payment by a special purpose financial captive insurance company; or
(B) the special purpose financial captive insurance company from taking an actionrequired to make a payment described in this Subsection (4)(b)(i).
(ii) Subsection (4)(b)(i) applies only if the payment is made:
(A) pursuant to a special purpose financial captive insurance company security orreinsurance contract; and
(B) consistent with the special purpose financial captive insurance company's plan ofoperation and any order issued to the special purpose financial captive insurance companypursuant to Section 31A-37a-201.
(c) A receiver of a ceding insurer may not void a nonfraudulent transfer by a cedinginsurer to a special purpose financial captive insurance company of money or other propertymade pursuant to a reinsurance contract.
(d) A receiver of a special purpose financial captive insurance company may not void anonfraudulent transfer by the special purpose financial captive insurance company of money orother property:
(i) (A) made to a ceding insurer pursuant to a reinsurance contract; or
(B) made to or for the benefit of a holder of a special purpose financial captive insurancecompany security with respect to the special purpose financial captive insurance companysecurity; and
(ii) made consistent with the special purpose financial captive insurance company's planof operation and an order issued to the special purpose financial captive insurance companypursuant to Section 31A-37a-201.
(5) (a) Except to fulfill an obligation under a reinsurance contract and notwithstandinganother provision of this chapter, Chapter 37, Captive Insurance Companies Act, or other laws ofthis state, the assets of a special purpose financial captive insurance company may not beconsolidated with or included in the estate of a ceding insurer in a delinquency proceedingagainst the ceding insurer pursuant to this chapter for any purpose including a distribution to acreditor of the ceding insurer.
(b) This Subsection (5) applies to assets that include an asset held in trust:
(i) on a funds-withheld basis; or
(ii) under another arrangement to secure the special purpose financial captive insurancecompany's obligations under a reinsurance contract.
Enacted by Chapter 302, 2008 General Session