375.1198. Mutual credits or debts, setoffs allowed--exceptions. - Missouri Statutes

Mutual credits or debts, setoffs allowed--exceptions.

375.1198. 1. Mutual debts or mutual credits, whether arising out ofone or more contracts, between the insurer and another person in connectionwith any action or proceeding under sections 375.1150 to 375.1246, sections374.216 and 374.217, RSMo, and section 382.302, RSMo, shall be set off andthe balance only shall be allowed or paid, except as provided insubsections 2 and 3* of this section and section 375.1204.

2. No setoff shall be allowed in favor of any person where:

(1) The obligation of the insurer to the person would not as of thedate of the filing of a petition for liquidation entitle the person toshare as a claimant in the assets of the insurer; or

(2) The obligation of the insurer to the person was purchased by ortransferred to the person with a view to its being used as a setoff; or

(3) The obligation of the person is to pay an assessment leviedagainst the members or subscribers of the insurer, or is to pay a balanceupon a subscription to the capital stock of the insurer, or is in any otherway in the nature of a capital contribution; or

(4) The obligation of the insurer is owed to an affiliate of suchperson or to any entity or association, rather than the person; or

(5) The obligation of the person is owed to an affiliate of theinsurer or to any other entity or association, rather than the insurer; or

(6) The obligations between the person and the insurer arise fromreinsurance relationships resulting in business where either the person orthe insurer has assumed risks and obligations from the other party and thenhas ceded back to that party substantially the same risks and obligations.

3. The provisions of this section shall apply to all obligationsincurred under contracts entered into, renewed, or extended on or afterJuly 1, 1992, and to any existing contract with a termination date longerthan one year from January 1, 1993.

(L. 1991 H.B. 385, et al. § 79, A.L. 2004 H.B. 1253 merged with S.B. 1235)

*Subsections 3, 4, and 5 were deleted and subsection 6 was renumbered by H.B. 1253 and S.B. 1235, 2004.