§ 27-1.1-7 - Payment by assuming company. - Rhode Island Statutes

SECTION 27-1.1-7

   § 27-1.1-7  Payment by assuming company.– (a) No credit shall be allowed for reinsurance unless the reinsurance agreementprovides that payments by the assuming company shall be made directly to theceding company or to its liquidator, receiver, or statutory successor, exceptwhere the contract specifically provides another payee of the reinsurance inthe event of the insolvency of the ceding company, or where the assumingcompany, with the consent of the direct insured or insureds, has assumed thepolicy obligations of the ceding company to the payees under the policies andin substitution for the obligations of the ceding company to the payees.

   (b) Except as provided in this section, no assuming companymay pay or settle, or agree to pay or settle, any policy claim, or any portionof a claim, directly to or with a policyholder of any ceding company if anorder of rehabilitation or liquidation has been entered against the cedingcompany.