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 purpose financial captive insurance company, the receiver shall manage the assets and liabilities of the special purpose financial captive insurance company pursuant to this chapter.
(3) An amount recoverable by the receiver of a special purpose financial captive insurance company under a reinsurance contract may not be reduced or diminished as a result of the entry of an order of conservation, rehabilitation, or liquidation with respect to a ceding insurer, notwithstanding a contract or other documentation governing the special purpose financial captive insurance company insurance securitization.
(4) The following applies notwithstanding Chapter 27a, Insurer Receivership Act, or another law of this state:
(a) An application, petition, a temporary restraining order, or injunction issued pursuant to Chapter 27a, Insurer Receivership Act, with respect to a ceding insurer does not prohibit the transaction of business by a special purpose financial captive insurance company, including:
(i) a payment by a special purpose financial captive insurance company made with respect to a special purpose financial captive insurance company security; or
(ii) an action or proceeding against a special purpose financial captive insurance company or its assets.
(b)
(i) Subject to Subsection (4)(b)(ii), the commencement of a summary proceeding with respect to a special purpose financial captive insurance company and an order issued by the court 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 action required 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 or reinsurance contract; and
(B) consistent with the special purpose financial captive insurance company's plan of operation and any order issued to the special purpose financial captive insurance company pursuant to Section 31A-37a-201.
(c) A receiver of a ceding insurer may not void a nonfraudulent transfer by a ceding insurer to a special purpose financial captive insurance company of money or other property made pursuant to a reinsurance contract.
(d) A receiver of a special purpose financial captive insurance company may not void a nonfraudulent transfer by the special purpose financial captive insurance company of money or other 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 insurance company security with respect to the special purpose financial captive insurance company security; and
(ii) made consistent with the special purpose financial captive insurance company's plan of operation and an order issued to the special purpose financial captive insurance company pursuant to Section 31A-37a-201.
(5)
(a) Except to fulfill an obligation under a reinsurance contract and notwithstanding another provision of this chapter, Chapter 37, Captive Insurance Companies Act, or other laws of this state, the assets of a special purpose financial captive insurance company may not be consolidated with or included in the estate of a ceding insurer in a delinquency proceeding against the ceding insurer pursuant to this chapter for any purpose including a distribution to a creditor 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 insurance company's obligations under a reinsurance contract.
Enacted by Chapter 302, 2008 General Session
