Utah Code 31A-22-1201. Assumption agreement
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(1) Subject to Subsection (2), a credit for reinsurance ceded under Section 31A-17-404 or 31A-17-404.1 is not allowed unless, in addition to meeting the requirements of Section 31A-17-404 or 31A-17-404.1, the reinsurance agreement provides in substance that if the ceding insurer is insolvent, the reinsurance is payable by the assuming insurer:
Terms Used In Utah Code 31A-22-1201
- Contract: A legal written agreement that becomes binding when signed.
- insolvent: means that:(95)(a) an insurer is unable to pay the insurer's obligations as the obligations are due;(95)(b) an insurer's total adjusted capital is less than the insurer's mandatory control level RBC under Subsection
31A-17-601 (8)(c); or(95)(c) an insurer's admitted assets are less than the insurer's liabilities. See Utah Code 31A-1-301- Insurance: includes :
(96)(b)(i) a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;(96)(b)(ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and(96)(b)(iii) a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301- Policy: includes a service contract issued by:
(150)(b)(i) a motor club under Chapter 11, Motor Clubs;(150)(b)(ii) a service contract provided under Chapter 6a, Service Contracts; and(150)(b)(iii) a corporation licensed under:(150)(b)(iii)(A) Chapter 7, Nonprofit Health Service Insurance Corporations; or(150)(b)(iii)(B) Chapter 8, Health Maintenance Organizations and Limited Health Plans. See Utah Code 31A-1-301- Reinsurance: means an insurance transaction where an insurer, for consideration, transfers any portion of the risk it has assumed to another insurer. See Utah Code 31A-1-301
(1)(a) on the basis of the liability of the ceding insurer under the contract or contracts reinsured;(1)(b) without diminution because of the insolvency of the ceding insurer; and(1)(c) directly to the ceding insurer or to its domiciliary liquidator or receiver.(2) Subsection (1) applies except if:(2)(a) a contract specifically provides another payee of the insurance in the event of the insolvency of the ceding insurer; or(2)(b) the assuming insurer, with the consent of the one or more direct insureds, assumes the policy obligations of the ceding insurer:(2)(b)(i) as direct obligations of the assuming insurer to the payees under the policies; and(2)(b)(ii) in substitution for the obligations of the ceding insurer to the payees. - Insurance: includes :