N.J.S. § 17B:32-59 Mutual Debts, Credits

• Library: New Jersey Permanent Statutes
• Edition: 2023
• Currency: Current through L. 2023, c. 194.
• Year: 2023
• Citation: N.J.S. § 17B:32-59

a. Mutual debts or mutual credits, whether arising out of one or more contracts between the insurer and another person in connection with any action or proceeding under this act, shall be set off and the balance only shall be allowed or paid, except as provided in subsections b., c. and d. of this section and section 32 of this act.

b. No setoff shall be allowed in favor of any person if:

(1) The obligation of the insurer to the person 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; or

(2) The obligation of the insurer to the person was purchased by or transferred to the person with a view to its being used as a setoff; or

(3) The obligation of the insurer is owed to an affiliate of such person, or any other entity or association other than the person; or

(4) The obligation of the person is owed to an affiliate of the insurer, or any other entity or association other than the insurer; or

(5) The obligation of the person is to pay an assessment levied against the members or subscribers of the insurer, or is to pay a balance upon a subscription to the capital stock of the insurer, or is in any other way in the nature of a capital contribution; or

(6) The obligations between the person and the insurer arise from business which is both ceded to and assumed from the insurer except that the rehabilitator may, with regard to such business, allow certain setoffs in rehabilitation if he finds the allowance of said setoffs appropriate.

c. The liquidator shall provide persons that assumed business from the insurer with accounting statements identifying debts which are currently due and payable. Such persons may set off against such debts only mutual credits which are currently due and payable by the insurer to such persons for the period covered by the accounting statement.