Introduced

Reinsurance contracts held by the insurers placed in conservation or rehabilitation proceedings or liquidation shall be continued or terminated as provided in the contract and as specified in the act. Reinsurance contracts terminated pursuant to an order of liquidation shall be subject to mandatory negotiation and arbitration procedures specified in the act. (Section 375.1183.1-2).

A guaranty association may elect to assume the liquidated insurer's rights and obligations under reinsurance contracts within 180 days of the order of liquidation as specified in the act. To facilitate this decision, the receiver and each affected reinsurer shall make available copies of reinsurance contracts and related files and records, as well as notices of any defaults under the contracts or any known event or condition which could become a default. (Section 375.1183.3(1)-(2)).

The act further specifies rights and duties of the guaranty association and reinsurers under the reinsurance contracts assumed by the guaranty association, including with regard to premium payments, payment of claims, resolution of disputes over amounts due, and termination or continuation of the contracts. (Section 375.1183.3(3)).

If a receiver continues policies of life or health insurance or annuities issued by an insolvent insurer, and the policies are not covered in whole or in part by a guaranty association, the receiver may elect to assume the liquidated insurer's rights and obligations under reinsurance contracts relating to the policies or annuities within 180 days of the order of liquidation as specified in the act, provided the contracts have not been terminated. In this event, premiums for the applicable reinsurance shall be chargeable against the estate of the insolvent insurer. (Section 375.1183.4).

Between the order of liquidation and the time a guaranty association elects to assume the insolvent insurer's rights and obligations under a reinsurance contract as specified in the act, a guaranty association, receiver, or reinsurer shall not have any right or obligation under any reinsurance contract eligible for assumption under the act. (Section 375.1183.5).

If the guaranty association or receiver does not timely elect to assume a reinsurance contract as provided in the act, the reinsurance contract shall be terminated retroactively, effective as of the date of the order of liquidation, and shall be subject to mandatory negotiation and arbitration procedures specified in the act. (Section 375.1183.6).

When policies or annuities, or the obligations of the guaranty association under the policies or annuities, are transferred to an assuming insurer, associated reinsurance may be transferred to the assuming insurer as well, subject to certain limitations specified in the act. (Section 375.1183.7).

This act shall supercede provisions of law or any affected reinsurance contract with regard to payment of reinsurance proceeds for losses or events occurring after an order of liquidation. (Section 375.1183.8).

When a reinsurance contract is terminated pursuant to the Insurers Supervision, Rehabilitation and Liquidation Act, the reinsurer and the receiver shall commence mandatory negotiation and arbitration procedures laid out in the act. (Section 375.1183.9).

This act shall be construed consistent with the existing power of the Missouri Life and Health Insurance Guaranty Association to assume the rights of insolvent insurers under reinsurance contracts. (Section 375.1183.11).

ERIC VANDER WEERD