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
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Last revised: Thursday, May 28, 2009