Bill Text - HB1403 (2016)

Relative to reinsurance.


Revision: May 31, 2016, midnight

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CHAPTER 144

HB 1403 - FINAL VERSION

 

2016 SESSION

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\t01/09

 

HOUSE BILL\t1403

 

AN ACT\trelative to reinsurance.

 

SPONSORS:\tRep. Hunt, Ches. 11; Rep. Butler, Carr. 7; Rep. Flanders, Belk. 3; Sen. Bradley, Dist 3

 

COMMITTEE:\tCommerce and Consumer Affairs

 

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ANALYSIS

 

\tThis bill provides that a credit shall not be allowed to any ceding insurer for reinsurance unless the contract specifies how the reinsurance will be paid in the event of the insolvency of the ceding insurer.

 

\tThis bill is a request of the insurance department.

 

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Explanation:\tMatter added to current law appears in bold italics.

\t\tMatter removed from current law appears [in brackets and struckthrough.]

\t\tMatter which is either (a) all new or (b) repealed and reenacted appears in regular type.

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\t01/09

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Sixteen

 

AN ACT\trelative to reinsurance.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

\t144:1  New Paragraph; Insurance; Credit Allowed a Domestic Ceding Insurer.  Amend RSA 405:47 by inserting after paragraph VI the following new paragraph:

\t\tVII.(a)  No credit under this section shall be allowed, as an admitted asset or deduction from liability, to any ceding insurer for reinsurance, unless the reinsurance contract provides, in substance, that in the event of the insolvency of the ceding insurer, the reinsurance shall be payable by the assuming insurer on the basis of the claims allowed against the ceding insurer in the insolvency proceedings, under contract or contracts reinsured, without diminution because of the insolvency of the ceding insurer directly to the ceding insurer or to its domiciliary liquidator or receiver except:

\t\t\t\t(1)  Where the contract specifically provides another payee of such reinsurance in the event of the insolvency of the ceding insurer; or

\t\t\t\t(2)  Where the assuming insurer with the consent of the direct insured or insured has assumed such policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in substitution for the obligations of the ceding insurer to such payees.

\t\t\t(b)  A reinsurance contract may provide that the domiciliary liquidator or receiver of any insolvent ceding insurer shall, within a specified or reasonable time after the claim is filed in court or in the receivership, give written notice to the assuming insurer of all or part of any claims against the ceding insurer on the policy or bond reinsured.  During the pendency of the claim, any assuming insurer may investigate the claim and, unless forbidden to do so by the reinsurance agreement, may intervene in the proceeding in which the claim is pending and interpose any defenses it considers available which have not been raised by the ceding insurer, its liquidator, or receiver.  The expenses incurred by the assuming insurer in this type of action are payable up to the amount of the expenses or the amount of the benefit produced, whichever is less, as expenses of the receivership.  If 2 or more assuming insurers have potential liability because of the same claim, the expenses shall be apportioned among them in proportion to the benefit received.

\t144:2  Effective Date.  This act shall take effect 60 days after its passage.

Approved: May 27, 2016

Effective Date: July 26, 2016

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