Actions by and against the receiver.

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(1) An allegation by the receiver of improper or fraudulent conduct against any person may not be the basis of a defense by a third party to the enforcement of a contractual obligation owed to the insurer. This section does not bar a third party from the right to raise a defense that the conduct was materially and substantially related to the contractual obligation for which enforcement is sought.

(2) A prior wrongful or negligent action of any present or former officer, manager, director, trustee, owner, employee, or agent of the insurer may not be asserted as a defense to a claim by the receiver under a theory of estoppel, comparative fault, intervening cause, proximate cause, reliance, mitigation of damages, or otherwise. However, the affirmative defense of fraud in the inducement may be asserted against the receiver in a claim based on a contract; and a principal under a surety bond or a surety undertaking is entitled to credit for the value of any property pledged to secure the reimbursement obligation against any reimbursement obligation to the receiver, to the extent that the receiver has possession or control of the property, or that the insurer or its agents misappropriated such property, which includes, but is not limited to, the commingling of such property. Evidence of fraud in the inducement is admissible only if it is contained in the records of the insurer.

(3) An action or inaction by an insurance regulatory authority may not be asserted as a defense to a claim by the department.

History.—s. 7, ch. 2017-143.


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