SB 0184

CHAPTER 218

SB 184 - FINAL VERSION

AN ACT relative to reinsurance and relative to the unclaimed property of a demutualized insurance company.

SPONSORS: Sen. Johnson, Dist 2

I. Deletes the provision in current law which disallows setoffs of premiums payable to an insolvent insurer and clarifies the liability of the insurer.

II. Provides that unclaimed funds held by a demutualized insurance company shall be considered abandoned after 2 years, and establishes reporting requirements for unclaimed demutualization proceeds.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

AN ACT relative to reinsurance and relative to the unclaimed property of a demutualized insurance company.

Be it Enacted by the Senate and House of Representatives in General Court convened:

218:1 Counterclaims Deleted. Amend the section heading of RSA 402-C:34 to read as follows:

218:2 Counterclaims Deleted. Amend the introductory paragraph of RSA 402-C:34, II to read as follows:

II. EXCEPTIONS. No setoff [~~or counterclaim~~] shall be allowed in favor of any person where:

218:3 Liability of Insurer. RSA 402-C:36 is repealed and reenacted to read as follows:

402-C:36 Liability of Insurer. The amount recoverable by the liquidator from a reinsurer shall not be reduced as a result of delinquency proceedings unless the reinsurance contract provides, in substance, that in the event of the insolvency of the ceding insurer, the reinsurance shall be payable by the assuming insurer on the basis of the claims allowed against the ceding insurer in the insolvency proceedings, under contract or contracts reinsured without diminution because of the insolvency of the ceding insurer directly to the ceding insurer or to its domiciliary liquidator or receiver except:

I. Where the contract specifically provides another payee of such reinsurance in the event of the insolvency of the ceding insurer; or

II. Where the assuming insurer with the consent of the direct insured or insured 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.

218:4 Repeal. RSA 402-C:34, II(d), relative to disallowing certain setoffs and claims, is repealed.

218:5 New Section; Custody and Escheat of Unclaimed and Abandoned Property; Unclaimed Demutualization Proceeds. Amend RSA 471-C by inserting after section 7 the following new section:

471-C:7-a Unclaimed Demutualization Proceeds. Unclaimed property payable or distributable in the course of a demutualization, rehabilitation, or related reorganization of a mutual insurance company is presumed abandoned 2 years after the date of demutualization, unless the owner, during the 2 years following the date of demutualization, has communicated with the insurance company either in writing or through other communication which is evidenced by a contemporaneous record on file with the insurance company, concerning the demutualization proceeds.

218:6 Report of Abandoned Property; Unclaimed Demutualization Proceeds Included in Reporting Requirement and Exempt from Notice Requirement. Amend RSA 471-C:19, IV and V to read as follows:

IV. The report shall be filed before November 1 of each year for property presumed to be abandoned as of June 30 of that year, but the report of any insurance company, including the report of unclaimed demutualization proceeds under RSA 471-C:7-a, shall be filed before May 1 of each year for funds owing under insurance policies presumed to be abandoned as of December 31 of the preceding year. On written request by any person required to file a report, the administrator may postpone the reporting date.

V. Not more than 120 days before filing the report required by this section, the holder in possession of property abandoned and subject to custody as unclaimed property under this chapter, except for demutualization proceeds under RSA 471-C:7-a, shall send written notice to the apparent owner at such owner's last known address informing the owner that the holder is in possession of property subject to this chapter if:

(a) The holder has in its records an address for the apparent owner which the holder's records do not disclose to be inaccurate;

(b) The claim of the apparent owner is not barred by the statute of limitations; and

218:7 Unclaimed Demutualization Proceeds; Supplemental Report of Abandoned Property. On or before May 1, 2004, each demutualized insurance company shall file with the state treasurer a supplemental report of abandoned property under RSA 471-C:19, as amended by section 6 of this act, relative to unclaimed demutualization proceeds issued on or before January 1, 2002.

(Approved: Enacted in accordance with Article 44, Part II, N.H. Constitution, without signature of the Governor, July 1, 2003)