(a) Except as provided in this section, when a division becomes effective, a resulting insurer is responsible: (1) Individually for the policies and other liabilities the resulting insurer issues, undertakes or incurs in its own name after the division; (2) individually for the policies and other liabilities of the dividing insurer that are allocated to or remain the liability of that resulting insurer to the extent specified in the plan of division; and (3) jointly and severally with the other resulting insurers for the policies and other liabilities of the dividing insurer that are not allocated by the plan of division.
(b) If a division breaches an obligation of the dividing insurer, all of the resulting insurers are liable, jointly and severally, for the breach, but the validity and effectiveness of the division shall not be affected by the breach.
(c) A direct or indirect allocation of capital, surplus, property, or policies or other liabilities in a division is not a distribution for purposes of the organic law of the dividing insurer or any of the resulting insurers.
(d) Liens, security interests and other charges on the capital, surplus or other property of the dividing insurer are not impaired by the division, notwithstanding any otherwise enforceable allocation of policies or other liabilities of the dividing insurer.
(e) If the dividing insurer is bound by a security agreement governed by Article 9 of title 42a, or Article 9 of the Uniform Commercial Code as enacted in any other jurisdiction, and the security agreement provides that the security interest attaches to after-acquired collateral, each resulting insurer is bound by the security agreement.
(f) Except as provided in the plan of division and specifically approved by the commissioner, an allocation of a policy or other liability does not: (1) Affect the rights under other law of a policyholder or creditor owed payment on the policy, or payment of any other type of liability or performance of the obligation that creates the liability, except that those rights are available only against a resulting insurer responsible for the policy, liability or obligation under this section; or (2) release or reduce the obligation of a reinsurer, surety or guarantor of the policy, liability or obligation.
(P.A. 17-2, S. 7.)