A. The reinsurance agreement for which credit is allowed under this articleshall contain the following provisions:
1. A provision making the reinsurance payable by the assuming insurer on thebasis of the liability of the ceding insurer under the contract or contractsreinsured without diminution because of the insolvency of the ceding insurer;
2. A provision making the reinsurance payable directly to the ceding insureror to its domiciliary liquidator or receiver except (i) where the contractspecifically provides another payee of the reinsurance in the event of theinsolvency of the ceding insurer or (ii) where the assuming insurer with theconsent of the direct insured has assumed the policy obligations of theceding insurer as direct obligations of the assuming insurer to the payeesunder the policies and in substitution for the obligations of the cedinginsurer to the payees;
3. A provision that the receiver, liquidator or statutory successor of aninsolvent ceding insurer shall give written notice to the assuming insurer ofany impending claim on the policy or bond reinsured; and
4. If the ceding insurer is a domestic insurer and the assuming insurer isnot licensed or accredited in this Commonwealth, provisions in which theassuming insurer:
a. Agrees that in the event of the failure of the assuming insurer to performits obligations under the terms of the reinsurance agreement, the assuminginsurer, at the request of the ceding insurer, shall submit to thejurisdiction of any court of competent jurisdiction in any state of theUnited States, will comply with all requirements necessary to give such courtjurisdiction, and will abide by the final decision of such court or of anyappellate court in the event of an appeal; and
b. Designate the Commission or a designated attorney as its true and lawfulattorney upon whom may be served any lawful process in any action, suit orproceeding instituted by or on behalf of the ceding company.
B. The notice required by subdivision 3 of subsection A shall be given withina reasonable time after the claim is filed in the insolvency proceeding.While waiting for the settlement of the claim, any assuming insurer at itsown expense may investigate the claim and interpose in the proceeding inwhich the claim is to be adjudicated, any defense it considers available tothe ceding insurer or its receiver, liquidator or statutory successor. Theexpense incurred by the assuming insurer shall be chargeable, subject to theapproval of the court, against the insolvent ceding insurer as part of theexpense of liquidation. The expense shall be chargeable to the extent of theproportionate share of any benefit that accrues to the ceding insurer solelyas a result of the defense undertaken by the assuming insurer. Where two ormore assuming insurers are involved in the same claim and a majority ofinterest elect to interpose a defense to the claim, the expense shall beapportioned according to the terms of the reinsurance agreement as though theexpense had been incurred by the ceding insurer.
C. The requirements of this section shall not apply when credit is allowedpursuant to the provisions of subdivision 1 of § 38.2-1316.4.
A. The reinsurance agreement for which credit is allowed under this articleshall contain the following provisions:
1. A provision making the reinsurance payable by the assuming insurer on thebasis of the liability of the ceding insurer under the contract or contractsreinsured without diminution because of the insolvency of the ceding insurer;
2. A provision making the reinsurance payable directly to the ceding insureror to its domiciliary liquidator or receiver except (i) where the contractspecifically provides another payee of the reinsurance in the event of theinsolvency of the ceding insurer or (ii) where the assuming insurer with theconsent of the direct insured has assumed the policy obligations of theceding insurer as direct obligations of the assuming insurer to the payeesunder the policies and in substitution for the obligations of the cedinginsurer to the payees;
3. A provision that the receiver, liquidator or statutory successor of aninsolvent ceding insurer shall give written notice to the assuming insurer ofany impending claim on the policy or bond reinsured; and
4. If the ceding insurer is a domestic insurer and the assuming insurer isnot licensed or accredited in this Commonwealth, provisions in which theassuming insurer:
a. Agrees that in the event of the failure of the assuming insurer to performits obligations under the terms of the reinsurance agreement, the assuminginsurer, at the request of the ceding insurer, shall submit to thejurisdiction of any court of competent jurisdiction in any state of theUnited States, will comply with all requirements necessary to give such courtjurisdiction, and will abide by the final decision of such court or of anyappellate court in the event of an appeal; and
b. Designate the Commission or a designated attorney as its true and lawfulattorney upon whom may be served any lawful process in any action, suit orproceeding instituted by or on behalf of the ceding company.
B. The notice required by subdivision 3 of subsection A shall be given withina reasonable time after the claim is filed in the insolvency proceeding.While waiting for the settlement of the claim, any assuming insurer at itsown expense may investigate the claim and interpose in the proceeding inwhich the claim is to be adjudicated, any defense it considers available tothe ceding insurer or its receiver, liquidator or statutory successor. Theexpense incurred by the assuming insurer shall be chargeable, subject to theapproval of the court, against the insolvent ceding insurer as part of theexpense of liquidation. The expense shall be chargeable to the extent of theproportionate share of any benefit that accrues to the ceding insurer solelyas a result of the defense undertaken by the assuming insurer. Where two ormore assuming insurers are involved in the same claim and a majority ofinterest elect to interpose a defense to the claim, the expense shall beapportioned according to the terms of the reinsurance agreement as though theexpense had been incurred by the ceding insurer.
C. The requirements of this section shall not apply when credit is allowedpursuant to the provisions of subdivision 1 of § 38.2-1316.4.
A. The reinsurance agreement for which credit is allowed under this articleshall contain the following provisions:
1. A provision making the reinsurance payable by the assuming insurer on thebasis of the liability of the ceding insurer under the contract or contractsreinsured without diminution because of the insolvency of the ceding insurer;
2. A provision making the reinsurance payable directly to the ceding insureror to its domiciliary liquidator or receiver except (i) where the contractspecifically provides another payee of the reinsurance in the event of theinsolvency of the ceding insurer or (ii) where the assuming insurer with theconsent of the direct insured has assumed the policy obligations of theceding insurer as direct obligations of the assuming insurer to the payeesunder the policies and in substitution for the obligations of the cedinginsurer to the payees;
3. A provision that the receiver, liquidator or statutory successor of aninsolvent ceding insurer shall give written notice to the assuming insurer ofany impending claim on the policy or bond reinsured; and
4. If the ceding insurer is a domestic insurer and the assuming insurer isnot licensed or accredited in this Commonwealth, provisions in which theassuming insurer:
a. Agrees that in the event of the failure of the assuming insurer to performits obligations under the terms of the reinsurance agreement, the assuminginsurer, at the request of the ceding insurer, shall submit to thejurisdiction of any court of competent jurisdiction in any state of theUnited States, will comply with all requirements necessary to give such courtjurisdiction, and will abide by the final decision of such court or of anyappellate court in the event of an appeal; and
b. Designate the Commission or a designated attorney as its true and lawfulattorney upon whom may be served any lawful process in any action, suit orproceeding instituted by or on behalf of the ceding company.
B. The notice required by subdivision 3 of subsection A shall be given withina reasonable time after the claim is filed in the insolvency proceeding.While waiting for the settlement of the claim, any assuming insurer at itsown expense may investigate the claim and interpose in the proceeding inwhich the claim is to be adjudicated, any defense it considers available tothe ceding insurer or its receiver, liquidator or statutory successor. Theexpense incurred by the assuming insurer shall be chargeable, subject to theapproval of the court, against the insolvent ceding insurer as part of theexpense of liquidation. The expense shall be chargeable to the extent of theproportionate share of any benefit that accrues to the ceding insurer solelyas a result of the defense undertaken by the assuming insurer. Where two ormore assuming insurers are involved in the same claim and a majority ofinterest elect to interpose a defense to the claim, the expense shall beapportioned according to the terms of the reinsurance agreement as though theexpense had been incurred by the ceding insurer.
C. The requirements of this section shall not apply when credit is allowedpursuant to the provisions of subdivision 1 of § 38.2-1316.4.
