375.1184. Contracts and leases of insurer, liquidator may disaffirm--procedures--liability of liquidator, how calculated. - Missouri Statutes

Contracts and leases of insurer, liquidator maydisaffirm--procedures--liability of liquidator, how calculated.

375.1184. 1. The liquidator may disaffirm or repudiate any contract orlease:

(1) To which the insurer is a party;

(2) The performance of which the liquidator, in his sole discretion,determines to be burdensome; and

(3) The disaffirmance or repudiation of which the liquidator determines,in his sole discretion, will promote the orderly administration of the affairsof the insurer.

2. The liquidator shall determine whether or not to exercise the rightof repudiation under this section within a reasonable period following theentry of the order of liquidation. In the sole discretion of the liquidator,the contract shall be repudiated as of either:

(1) The date of the entry of the order of liquidation; or

(2) Some other date subsequent to the entry of the order of liquidationselected by the liquidator for the disaffirmance or repudiation of suchcontract or agreement.

3. The liability of the liquidator for the disaffirmance or repudiationof any contract pursuant to subsection 1 of this section shall be calculatedas of the date of repudiation, and shall be limited to actual directcompensatory damages. Any such damages shall be submitted as a claim to theliquidator pursuant to sections 375.1206 to 375.1222. For purposes of thissubsection, the term "actual direct compensatory damages" does not include:

(1) Punitive or exemplary damages;

(2) Damages for lost profits or opportunity; or

(3) Damages for pain and suffering.

4. An agreement which tends to diminish or defeat the interest of theliquidator in any asset acquired by him under section 375.1176, whetheracquired before or subsequent to the entry of the order of liquidation, shallnot be valid against the liquidator unless such agreement:

(1) Is in writing;

(2) Was executed by the insurer and any person claiming an adverseinterest thereunder, including the obligor, contemporaneously with theacquisition of the asset by the insurer;

(3) Was approved by the board of directors of the insurer, whichapproval shall be reflected in the minutes of said board; and

(4) Has been, continuously, from the time of its execution, an officialrecord of the insurer maintained and readily available to the director orexaminers of the department of insurance, financial institutions andprofessional registration.

(L. 1991 H.B. 385, et al. § 70)