31A-22-1201 - Assumption agreement. - Utah Statutes

31A-22-1201. Assumption agreement.
(1) Subject to Subsection (2), a credit for reinsurance ceded under Section 31A-17-404,31A-17-404.1, or 31A-17-404.2, is not allowed unless, in addition to meeting the requirementsof Section 31A-17-404, 31A-17-404.1, or 31A-17-404.2, the reinsurance agreement provides insubstance that if the ceding insurer is insolvent, the reinsurance is payable by the assuminginsurer:
(a) on the basis of the liability of the ceding insurer under the contract or contractsreinsured;
(b) without diminution because of the insolvency of the ceding insurer; and
(c) directly to the ceding insurer or to its domiciliary liquidator or receiver.
(2) Subsection (1) applies except if:
(a) a contract specifically provides another payee of the insurance in the event of theinsolvency of the ceding insurer; or
(b) the assuming insurer, with the consent of the one or more direct insureds, assumes thepolicy obligations of the ceding insurer:
(i) as direct obligations of the assuming insurer to the payees under the policies; and
(ii) in substitution for the obligations of the ceding insurer to the payees.

Amended by Chapter 257, 2008 General Session