2006 Utah Code - 31A-27-323 — Setoffs.

     31A-27-323.   Setoffs.
     (1) Mutual debts or mutual credits between the insurer and another person in connection with any action or proceeding under this chapter shall be set off and only the balance shall be allowed or paid, except as provided in Subsection (2).
     (2) A setoff may not be allowed in favor of any person under any of the following conditions if:
     (a) the obligation of the insurer to the person:
     (i) is illusory; or
     (ii) would not at the date of the filing of a petition for liquidation entitle the person to share as a claimant in the assets of the insurer;
     (b) the obligation of the insurer was purchased by or transferred to the person asserting it within 120 days prior to the petition for liquidation or with a view to its being used as a set off; or
     (c) the obligation of the person is:
     (i) to pay an assessment levied against the members or subscribers of the insurer;
     (ii) to pay a balance upon a subscription to the capital stock of the insurer; or
     (iii) in any other way in the nature of a capital contribution.
     (3) Subsection (2) may not be construed to deny a reinsurer its right to set off amounts due from the direct insurer against reinsurance proceeds to be paid to the direct insurer or its rehabilitator or liquidator.

Amended by Chapter 131, 1999 General Session