(1) Except as otherwise provided in subsection (2) of this section, the amount recoverable by the liquidator from reinsurers shall be payable under a contract or contracts reinsured by the reinsurer on the basis of reported claims allowed by the liquidation court without diminution as a result of the insolvency of the ceding insurer. Such payment shall be made directly to the ceding insurer or to its domiciliary liquidator unless the contract or other written agreement specifically provides another payee of such reinsurance in the event of the insolvency of the ceding insurer.
(2) Notwithstanding subsection (1) of this section, if a life and health insurance guaranty association has elected to succeed to the rights and obligations of the insolvent insurer under the contract of reinsurance, whether pursuant to section 10-20-108 (13)(h) or otherwise, then the reinsurer's liability to pay covered reinsured claims shall continue under the contract of reinsurance, subject to the payment to the reinsurer of the reinsurance premiums for such coverage. Payment for such reinsured claims shall only be made by the reinsurer pursuant to the direction of the guaranty association or its designated successor. Any payment made at the direction of the guaranty association or its designated successor by the reinsurer shall discharge the reinsurer of all further liability to any other party for such claim payment.
Source: L. 92: Entire part R&RE, p. 1466, § 14, effective July 1. L. 2001: Entire section amended, p. 230, § 2, effective July 1.