(iii) Subsection (10) applies to a reinsurance contract described in Subsection (7)(c)(i) or (ii). (8) (a) Subject to Subsection (8)(b), when a life insurance policy, disability income insurance policy, long-term care insurance policy, an annuity, or guaranty association obligation with respect to that policy or annuity is transferred to an assuming insurer, reinsurance on the policy or annuity may also be transferred: (i) by the affected guaranty association, in the case of a contract assumed under Subsection (4); or (ii) by the receiver, in the case of a contract assumed under Subsection (5). (b) A transfer under Subsection (8)(a), is subject to the following: (i) unless the reinsurer and the assuming insurer agree otherwise, the reinsurance contract transferred may not cover a new policy of insurance or new annuity in addition to those transferred; (ii) the obligations described in Subsections (4) and (5) do not apply with respect to matters arising after the effective date of the transfer; and (iii) notice shall be given in writing, return receipt requested, by the transferring party to the affected reinsurer not less than 30 days before the effective date of the transfer. (9) (a) This section shall, to the extent provided in this chapter, supersede a law or an affected reinsurance contract that provides for or requires a payment of reinsurance proceeds on account of a loss or event: (i) that occurs in a period after the coverage date; and (ii) to the receiver of the insolvent insurer or to any other person. (b) The receiver shall remain entitled to any amounts payable by the reinsurer under the reinsurance contract with respect to a loss or event that occurs in a period before the coverage date, subject to this chapter including applicable setoff provisions. (10) If a contract reinsuring a life insurance policy, disability income insurance policy, long-term care insurance policy, or an annuity is terminated pursuant to this chapter, the procedures of this Subsection (10) apply. (a) The reinsurer and the receiver shall, upon written notice to the other party to the reinsurance contract no later than 30 days after the receipt by the reinsurer of notice of termination, commence a mandatory negotiation and arbitration procedure in accordance with this Subsection (10). (b) (i) Each party shall appoint an actuary to determine an estimated sum due as a result of the termination of the reinsurance contract calculated in a way expected to make the parties economically indifferent as to whether the reinsurance contract continues or terminates, giving due regard to the economic effects of the insolvency. (ii) The estimated sum described in this Subsection (10)(b) shall: (A) take into account the present value of future cash flows expected under the reinsurance contract; and (B) be based on a gross premium valuation of net liability using current assumptions: (I) that reflect postinsolvency experience expectations, with no additional margins; (II) that are net of any amounts payable and receivable; and (III) with a market value adjustment to reflect premature sale of assets to fund the settlement. (c) (i) Within 90 days of the day on which the written request pursuant to Subsection (10)(a) is made, each party shall provide the other party with: (A) its estimate of the sum due as a result of the termination of the reinsurance contract; and (B) all relevant documents and other information supporting the estimate. (ii) The parties shall make a good faith effort to reach agreement on the sum due. (d) (i) If the parties are unable to reach agreement within 90 days following the day on which the materials required in Subsection (10)(c) are submitted, either party may initiate arbitration proceedings: (A) as provided in the reinsurance contract; or (B) if the reinsurance contract does not contain an arbitration clause, pursuant to this Subsection (10)(d) by providing the other party with a written demand for arbitration. (ii) Arbitration under Subsection (10)(d)(i)(B) shall be conducted pursuant to the following procedures: (A) Venue for the arbitration shall be within the county of the court's jurisdiction or another location agreed to by the parties. (B) Within 30 days of the responding party's receipt of the arbitration demand, each party shall appoint an arbitrator who is: (I) a disinterested active or retired officer or executive of a life insurance or reinsurance company; or (II) other professional with no less than 10 years experience in or relating to the field of life insurance or life reinsurance. (C) The two arbitrators appointed under Subsection (10)(d)(ii)(B) shall appoint an independent, impartial, disinterested umpire who is an: (I) active or retired officer or executive of a life insurance or reinsurance company; or (II) other professional with no less than 10 years experience in the field of life insurance or life reinsurance. (D) If the arbitrators appointed under Subsection (10)(d)(ii)(B) are unable to agree on an umpire: (I) each arbitrator shall provide the other with the names of three qualified individuals; (II) each arbitrator shall strike two names from the other's list; and (III) the umpire shall be chosen by drawing lots from the remaining individuals. (E) Within 60 days following the day on which the umpire is appointed, each party shall, unless otherwise ordered by the arbitration panel, submit to the arbitration panel: (I) the party's estimates of the sum due as a result of the termination of the reinsurance contract; and (II) all relevant documents and other information supporting the estimate. (F) The time periods set forth in this Subsection (10)(d)(ii) may be extended upon mutual agreement of the parties. (G) The arbitration panel has all powers necessary to conduct the arbitration proceedings in a fair and appropriate manner, including the power to: (I) request additional information from the parties; (II) authorize discovery; (III) hold hearings; and (IV) hear testimony. (H) The arbitration panel may, if the arbitration panel considers it necessary, appoint one or more independent actuarial experts, the expense of which shall be shared equally between the parties. (I) An arbitration panel considering the matters set forth in this Subsection (10)(d) shall: (I) apply the standards set forth in Subsection (10)(b); and (II) issue a written award specifying a net settlement amount due from one party or the other as a result of the termination of the reinsurance contract. (e) The supervising court shall confirm an award issued under Subsection (10)(d)(ii)(I) absent proof of statutory grounds for vacating or modifying arbitration awards under the Federal Arbitration Act, 9 U.S.C. Sec. 1 et seq. (f) (i) If the net settlement amount agreed or awarded pursuant to this Subsection (10) is payable by the reinsurer, the reinsurer shall pay the amount due to the estate subject to any applicable setoff under Section 31A-27a-510. (ii) If the net settlement amount agreed or awarded pursuant to this Subsection (10) is payable by the insurer, the reinsurer is considered to have a timely filed claim against the estate for that amount, which claim shall be paid pursuant to the priority established in Subsection 31A-27a-701(2)(f). (iii) A guaranty association: (A) is not entitled to receive the net settlement amount, except to the extent it is entitled to share in the estate assets as creditors of the estate; and (B) has no responsibility for the net settlement amount. (11) (a) Except as otherwise provided in this section, this section does not alter or modify the terms and conditions of a reinsurance contract. (b) This section does not abrogate or limit any rights of a reinsurer to claim that it is entitled to rescind a reinsurance contract. (c) This section does not give a policyholder or beneficiary an independent cause of action against a reinsurer that is not otherwise set forth in the reinsurance contract. (d) This section does not limit or affect any guaranty association's rights as a creditor of the estate against the assets of the estate. (e) This section does not apply to a reinsurance agreement covering property or casualty risks.
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