§ 38a-932 — (Formerly Sec. 38-450). Set-offs and counterclaims. Accounting statements.

Connecticut § 38a-932

• Jurisdiction: Connecticut
• Title 38a: Insurance
• Ch. 704c: Insurers Rehabilitation and Liquidation Act and Termination of Domestic Life Insurance Companies

Text

(a) Mutual debts or mutual credits, whether arising out of one or more contracts between the insurer and another person in connection with any action or proceeding under sections 38a-903 to 38a-961, inclusive, shall be set off and the balance only shall be allowed or paid, except as provided in subsection (b) of this section and section 38a-935. (b) No set-off or counterclaim shall be allowed in favor of any person where: (1) The obligation of the insurer to the person would not at the date of the filing of a petition for receivership entitle the person to share as a claimant in the assets of the insurer; (2) the obligation of the insurer to the person was purchased by or transferred to the person with a view to its being used as a set-off; (3) the obligation of the insurer is owed to an affiliate of such person or any other entity or association other than the person; (4) the obligation of the person is owed to an affiliate of the insurer or any other entity or association other than the insurer; (5) the obligation of the person is to pay an assessment levied against the members or subscribers of the insurer, or is to pay a balance upon a subscription to the capital stock of the insurer, or is in any other way in the nature of a capital contribution; or (6) the obligations between the person and the insurer arise from business where either the person or the insurer has assumed risks and obligations from the other party and then has ceded back to that party substantially the same risks and obligations. (c) The receiver shall provide persons with accounting statements identifying all debts which are due and payable. Where a person owes to the insurer amounts which are due and payable, against which the person asserts set-off of mutual credits which may become due and payable from the insurer in the future, the person shall promptly pay to the receiver the amounts due and payable provided, notwithstanding section 38a-944 or any other provision of sections 38a-903 to 38a-961 , inclusive, the receiver shall promptly and fully refund, to the extent of the person's prior payments, any mutual credits that become due and payable to the person by the insurer. Prior to the termination of any proceeding under said sections, the amount due the person shall be determined for the purpose of the receiver making a final refund, if any. (d) This section shall apply to all contracts entered into, renewed, extended or amended on or after October 1, 1993, and to debts or credits arising from any business written or transactions occurring after that date pursuant to any such contract. Contracts entered into, renewed, extended or amended before October 1, 1993, shall continue to be subject to the provisions of this section as revised to 1991. For purposes of this section, any change in the terms of, or consideration for, any such contract shall be deemed an amendment.

Legislative History

(P.A. 79-382, S. 30; P.A. 92-93, S. 22, 46; May Sp. Sess. P.A. 92-11, S. 51, 70.) History: Sec. 38-450 transferred to Sec. 38a-932 in 1991; P.A. 92-93 amended Subsec. (a) re applicability of set-offs to two or more contracts, amended Subsec. (b) to change reference to “liquidation” to “receivership” and to add additional provisions re disallowance of set-offs or counterclaims, added new Subsecs. (c) re accounting statements and (d) re applicability to contracts, effective October 1, 1993; May Sp. Sess. P.A. 92-11 amended Subsec. (d) to clarify application of section as amended by P.A. 92-93 to contracts entered into, renewed, extended or amended on or after October 1, 1993.