- Introduced -

SB 1235 - Under the current law, the Director of the Department of Insurance must disallow as an asset or deduction from liability to any ceding insurer any credit for reinsurance unless the reinsurance is payable to the ceding company and to its receiver if the ceding company is impaired or insolvent. This act removes the requirement that the ceding company be impaired (Section 375.246).

This act provides that nothing shall deprive a party in interest of any contractual right to pursue arbitration of a dispute during a liquidation proceeding except during the stay period and claims against the estate (Section 375.1176). Under this act, no setoff shall be allowed where the obligations between the person and the insurer arise from reinsurance relationships resulting in business where either the person or insurer has assumed risks and obligations from the other party and then has ceded back to that party substantially the same risks and obligations (Section 375.1198). The act also removes the December 31, 2005 sunset date on two provisions of Section 375.1220 which allow an estimation of contingent liabilities to be used to fix creditors' claims during the liquidation process (Section 375.1220).

STEPHEN WITTE