SCS/SB 1235 - Under the current law, the Director of the Department of Insurance must disallow as an asset or deduction from liability to any ceding insurer any credit for reinsurance unless the reinsurance is payable to the ceding company and to its receiver if the ceding company is impaired or insolvent. This act removes the requirement that the ceding company be impaired (Section 375.246). Under this act, no setoff shall be allowed where the obligations between the person and the insurer arise from reinsurance relationships resulting in business where either the person or insurer has assumed risks and obligations from the other party and then has ceded back to that party substantially the same risks and obligations (Section 375.1198). The act also removes the December 31, 2005, sunset clause on two provisions of Section 375.1220 which allow an estimation of contingent liabilities to be used to fix creditors' claims during the liquidation process. The act provides that expert testimony concerning estimates of incurred but not reported losses may be received into evidence in any tribunal proceeding by the receiver or by the reinsurer, provided that the testimony is otherwise admissible (section 375.1220).
STEPHEN WITTE