HOUSE SUBSTITUTE NO. 1
HOUSE BILL NO. 202
AS AMENDED BY HOUSE AMENDMENT NO. 1
AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE RELATING TO REINSURANCE.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE :
Section 1. Amend Section 914 of Title 18 of the Delaware Code by deleting the current text and replacing thereto as follows:
“(a) Notwithstanding any other provision of Section 911 or Section 912 of this title, no credit shall be allowed as an admitted asset or deduction from liability unless the reinsurance agreement provides that, in the event of insolvency of the ceding insurer, reinsurance proceeds shall be paid under a contract(s) reinsured by the assuming insurer on the basis of the amount of the claim allowed in the insolvency proceeding without diminution by reason of the inability of the ceding insurer to pay all or any part of the claim. For all ceding insurers which are subject to liquidation proceedings pursuant to Chapter 59 of this title on or before December 31, 1999, such payments shall be made directly to the domiciliary liquidator. For all other ceding insurers, including ceding insurers under supervision or rehabilitation proceedings under Chapter 59 of this title as of December 31, 1999, subject to the provisions of subchapter II (summary proceedings) of Chapter 59 of this title, such payments shall be made directly to the ceding insurer or to its domiciliary liquidator, except:
(1) where the contract or other written agreement between the ceding insurer
and the assuming insurer specifically provides another payee of such reinsurance
in the event of the insolvency of the ceding insurer. Provided, however, the
exception set forth in this paragraph (1) shall only apply to the extent that the re-
insurance proceeds due such payee are actually paid by the assuming insurer, or
(2) where the assuming insurer, with the consent of the direct insured(s), has assumed such policy obligations of the ceding insurer as direct obligations of the assuming insurer to the payees under such policies and in full and complete substitution for the obligations of the ceding insurer to such payees.
(b) Upon request of the Commissioner an insurer shall promptly inform the Commissioner in writing of the cancellation or any other material change of any of its reinsurance treaties or arrangements.”
Approved July 06, 2000