31A-22-1201. Assumption agreement.
(1) Subject to Subsection, a credit for reinsurance ceded under Sectionoris not allowed unless, in addition to meeting the requirements of Sectionor, the reinsurance agreement provides in substance that if the ceding insurer is insolvent, the reinsurance is payable by the assuming insurer: (2) 31A-17-404 31A-17-404.1 31A-17-404 31A-17-404.1 on the basis of the liability of the ceding insurer under the contract or contracts reinsured; without diminution because of the insolvency of the ceding insurer; and directly to the ceding insurer or to its domiciliary liquidator or receiver.
(2) Subsectionapplies except if: (1) a contract specifically provides another payee of the insurance in the event of the insolvency of the ceding insurer; or the assuming insurer, with the consent of the one or more direct insureds, assumes the policy obligations of the ceding insurer: as direct obligations of the assuming insurer to the payees under the policies; and in substitution for the obligations of the ceding insurer to the payees.