Good faith: means honesty in fact and intention, and in regard to 5, also requires the absence of:
(a)
information that would lead a reasonable person in the same position to know that the insurer is financially impaired or insolvent; and
(b)
knowledge regarding the imminence or pendency of a delinquency proceeding against the insurer. See Utah Code 31A-27a-102
insurer: means a person who:
(a)
is doing, has done, purports to do, or is licensed to do the business of insurance;
(b)
is or has been subject to the authority of, or to rehabilitation, liquidation, reorganization, supervision, or conservation by an insurance commissioner; or
Lien: A claim against real or personal property in satisfaction of a debt.
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Person: includes :
(a)
an individual;
(b)
a partnership;
(c)
a corporation;
(d)
an incorporated or unincorporated association;
(e)
a joint stock company;
(f)
a trust;
(g)
a limited liability company;
(h)
a reciprocal;
(i)
a syndicate; or
(j)
another similar entity or combination of entities acting in concert. See Utah Code 31A-1-301
Proceeding: includes an action or special statutory proceeding. See Utah Code 31A-1-301
receiver: means the commissioner or the commissioner's designee, including a rehabilitator, liquidator, or ancillary receiver. See Utah Code 31A-27a-102
Reinsurance: means a transaction or contract under which an assuming insurer agrees to indemnify a ceding insurer against all, or a part, of a loss that the ceding insurer may sustain under the one or more policies that the ceding insurer issues or will issue. See Utah Code 31A-27a-102
Reinsurer: means a person licensed in this state as an insurer with the authority to assume reinsurance. See Utah Code 31A-1-301
Transfer: includes the sale and every other and different mode of disposing of or parting with property or with an interest in property, whether:
is made when the transfer is so perfected that a bona fide purchaser from the insurer against whom applicable law permits the transfer to be perfected cannot acquire an interest in the property transferred that is superior to the interest in the property of the transferee; or
(ii)
if the transfer is not perfected as provided in Subsection (1)(a)(i) before the commencement of the delinquency proceeding, is considered made immediately before the day on which the initial filing of the petition commencing delinquency proceedings is filed.
(b)
“Value” means property or satisfaction or securing of a present or antecedent debt of the insurer.
(2)
(a)
If the conditions of Subsection (2)(b) are met, the receiver may avoid the following:
(i)
a transfer of an interest of the insurer in property;
the transfer or obligation is made or incurred on or within two years before the day on which the initial filing of a petition commencing delinquency proceedings is filed under this chapter; and
(ii)
the insurer voluntarily or involuntarily:
(A)
makes the transfer or incurs the obligation with actual intent to hinder, delay, or defraud a person to which the insurer is or becomes indebted on or after the day on which the transfer is made or the obligation is incurred; or
(B)
receives less than a reasonably equivalent value in exchange for the transfer or obligation.
(3)
Except to the extent that a transfer or obligation voidable under this section is voidable under other provisions of this chapter, a transferee or obligee of a transfer or obligation voidable under this section that takes for value and in good faith:
(a)
as the case may be:
(i)
has a lien on or may retain any interest transferred; or
(ii)
may enforce any obligation incurred; and
(b)
to the extent that the transferee or obligee gave value to the insurer in exchange for the transfer or obligation.
(4)
If a reinsurance transaction is avoided under this section:
(a)
the receiver shall tender to the reinsurer the value of any consideration transferred to the insurer in connection with the transaction less the amount of matured and liquidated liabilities owing by the reinsurer to the estate; and
(b)
the parties shall be returned to their relative positions before the implementation of the transaction avoided.
