KRS 304.33-350: Reinsurer's liability.

The amount recoverable by the liquidator from a reinsurer shall not be reduced as a result

of delinquency proceedings unless the reinsurance contract provides, in substance, that in

the event of the insolvency of the ceding insurer the reinsurance shall be payable under a

contract reinsured by the assuming insurer on the basis of reported claims allowed by the

liquidation court, without diminution because of the insolvency of the ceding insurer.

Such payments shall be made directly to the ceding insurer or to its domiciliary

liquidator, except:

(1) Where the contract or other written agreement specifically provides another payee

of such reinsurance in the event of the insolvency of the ceding insurer; or

(2) Where the assuming insurer, with the consent of th e direct insured, has assumed

such policy obligations of the ceding insurer as direct obligations of the assuming

insurer to the payees under such policies and in substitution for the obligations of

the ceding insurer to such payees.