Oklahoma § 36-711 - Allowance for credit or increase in amount at risk –

§ 36-711. Allowance for credit or increase in amount at risk –

Contract requirements.

A. 1. No credit shall be allowed, as an admitted asset or as a

deduction from liability, to any ceding insurer for reinsurance nor

Oklahoma Statutes - Title 36. Insurance

increase the amount it is authorized to have at risk unless the

reinsurance contract provides, in substance, that in the event of

the insolvency of the ceding insurer, the reinsurance shall be

payable under a contract or contracts reinsured by the assuming

insurer on the basis of reported claims allowed by the liquidation

court, without diminution because of the insolvency of the ceding

insurer. Such payments shall be made directly to the ceding insurer

or to its domiciliary liquidator, except:

a.

if the contract or other written agreement

specifically provides another payee of such

reinsurance in the event of the insolvency of the

ceding insurer, or

b.

if the assuming insurer, with the consent of the

direct insureds, 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.

2. The reinsurance agreement may provide that the domiciliary

liquidator of an insolvent ceding insurer shall give written notice

to the assuming insurer of the pendence of a claim against such

ceding insurer on the contract reinsured within a reasonable time

after such claim is filed in the liquidation proceeding. During the

pendence of such claim, any assuming insurer may investigate such

claim and interpose, at its own expense, in the proceeding where

such claim is to be adjudicated, any defenses which it deems

available to the ceding insurer, or its liquidator. Such expense

may be filed as a claim against the insolvent ceding insurer to the

extent of a proportionate share of the benefit which may accrue to

the ceding insurer solely as a result of the defense undertaken by

the assuming insurer. If two or more assuming insurers are involved

in the same claim and a majority in interest elect to interpose one

or more defenses to such claim, the expense shall be apportioned in

accordance with the terms of the reinsurance agreement as though

such expense had been incurred by the ceding insurer.

B. This section shall not apply to insurance of ocean marine

risks or marine protection and indemnity risks.

Added by Laws 1957, p. 242, § 711. Amended by Laws 1984, c. 149, §

4, eff. Nov. 1, 1984; Laws 1993, c. 79, § 3, eff. Sept. 1, 1993;

Laws 2000, c. 169, § 5, eff. Nov. 1, 2000.