MI SB0937

Persons cannot be prevented from exercising contractual rights to terminate, liquidate, or close out netting agreements or qualified financial contracts with an insurer during formal delinquency proceedings, provided the right is enforceable under applicable law.

Receivers must transfer net settlement amounts owed to insurers to the receiver's account, treating limited 2-way payment provisions as full 2-way provisions, with such amounts becoming general assets of the insurer.

Receivers transferring netting agreements or qualified financial contracts must either transfer all agreements with a counterparty and affiliates or transfer none, and must notify parties of transfers by noon on the business day following the transfer.

Receivers cannot avoid transfers of money or property related to netting agreements, security agreements with federal home loan banks, or qualified financial contracts made before formal delinquency proceedings, except for transfers made with actual intent to defraud.

Provides detailed definitions of financial instruments including commodity contracts, forward contracts, repurchase agreements, securities contracts, swap agreements, and qualified financial contracts for purposes of the section.