Effective 28 Aug 1991

375.1184. Contracts and leases of insurer, liquidator may disaffirm — procedures — liability of liquidator, how calculated. — 1. The liquidator may disaffirm or repudiate any contract or lease:

(1) To which the insurer is a party;

(2) The performance of which the liquidator, in his sole discretion, determines to be burdensome; and

(3) The disaffirmance or repudiation of which the liquidator determines, in his sole discretion, will promote the orderly administration of the affairs of the insurer.

2. The liquidator shall determine whether or not to exercise the right of repudiation under this section within a reasonable period following the entry of the order of liquidation. In the sole discretion of the liquidator, the contract shall be repudiated as of either:

(1) The date of the entry of the order of liquidation; or

(2) Some other date subsequent to the entry of the order of liquidation selected by the liquidator for the disaffirmance or repudiation of such contract or agreement.

3. The liability of the liquidator for the disaffirmance or repudiation of any contract pursuant to subsection 1 of this section shall be calculated as of the date of repudiation, and shall be limited to actual direct compensatory damages. Any such damages shall be submitted as a claim to the liquidator pursuant to sections 375.1206 to 375.1222. For purposes of this subsection, the term "actual direct compensatory damages" does not include:

(1) Punitive or exemplary damages;

(2) Damages for lost profits or opportunity; or

(3) Damages for pain and suffering.

4. An agreement which tends to diminish or defeat the interest of the liquidator in any asset acquired by him under section 375.1176, whether acquired before or subsequent to the entry of the order of liquidation, shall not be valid against the liquidator unless such agreement:

(1) Is in writing;

(2) Was executed by the insurer and any person claiming an adverse interest thereunder, including the obligor, contemporaneously with the acquisition of the asset by the insurer;

(3) Was approved by the board of directors of the insurer, which approval shall be reflected in the minutes of said board; and

(4) Has been, continuously, from the time of its execution, an official record of the insurer maintained and readily available to the director or examiners of the department of commerce and insurance.

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(L. 1991 H.B. 385, et al. § 70)