{"data":{"id":"us-ok/okla.-stat.-tit.-36-36-1926.1","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 36, § 36-1926.1","heading":"Netting agreements or qualified financial contracts —","body":"Contractual rights — Termination — Transfer.\n\nA. As used in this section:\n\n1. \"Actual direct compensatory damages\" means normal and\n\nreasonable costs of cover or other reasonable measures of damages\n\nutilized in the derivatives, securities, or other market for the\n\ncontract and agreement claims. Provided, actual direct compensatory\n\ndamages shall not include punitive or exemplary damages, damages for\n\nlost profit or lost opportunity, or damages for pain and suffering;\n\n2. \"Business day\" means a day other than a Saturday, Sunday, or\n\nany day on which either the New York Stock Exchange or the Federal\n\nReserve Bank of New York is closed;\n\n3. \"Contractual right\" means any right set forth in a rule or\n\nbylaw of a derivatives clearing organization, a multilateral\n\nclearing organization, a national securities exchange, a national\n\nsecurities association, a securities clearing agency, a contract\n\nmarket designated under the federal Commodity Exchange Act, a\n\nderivatives transaction execution facility registered under the\n\nfederal Commodity Exchange Act, or a board of trade or in a\n\nresolution of the governing board thereof and any right, whether or\n\nnot evidenced in writing, arising under statutory or common law, or\n\nunder law merchant, or by reason of normal business practice; and\n\n4. \"Walkaway clause\" means a provision in a netting agreement\n\nor a qualified financial contract which, after calculation of a\n\nvalue of a party's position or an amount due to or from one of the\n\nparties in accordance with its terms upon termination, liquidation,\n\nor acceleration of the netting agreement or qualified financial\n\ncontract, either does not create a payment obligation of a party or\n\nextinguishes a payment obligation of a party in whole or in part\n\nsolely because of the party's status as a non-defaulting party.\n\nB. Notwithstanding any other provision of the Oklahoma\n\nInsurance Code, including any other provision permitting the\n\nmodification of contracts, no person or entity shall be stayed or\n\nprohibited from exercising:\n\n1. A contractual right to cause termination, liquidation,\n\nacceleration, or closeout of obligations under or in connection with\n\nany netting agreement or qualified financial contract with an\n\ninsurer because of:\n\na. the insolvency, financial condition, or default of the\n\ninsurer at any time, provided the right is enforceable\n\nunder applicable law other than the provisions of this\n\nact, or\n\nb. the commencement of a formal delinquency proceeding\n\nunder the provisions of this section;\n\n2. Any right under a pledge, security, collateral,\n\nreimbursement, guarantee agreement or arrangement, any other similar\n\nsecurity agreement or arrangement, or other credit enhancement\n\nrelating to one or more netting agreements or qualified financial\n\ncontracts;\n\n3. Subject to any provision of Section 1928 of Title 36 of the\n\nOklahoma Statutes, any right to set off or net out any termination\n\nvalue, payment amount, or other transfer obligation arising under or\n\nin connection with one or more qualified financial contracts where\n\nthe counterparty or its guarantor is organized under the laws of the\n\nUnited States or a state or a foreign jurisdiction approved by the\n\nSecurities Valuation Office (SVO) of the National Association of\n\nInsurance Commissioners (NAIC) as eligible for netting; or\n\n4. If a counterparty to a master netting agreement or a\n\nqualified financial contract with an insurer subject to a proceeding\n\nunder this section terminates, liquidates, closes out, or\n\naccelerates the agreement or contract, damages shall be measured as\n\nof the date or dates of termination, liquidation, closeout, or\n\nacceleration. The amount of a claim for damages shall be actual\n\ndirect compensatory damages calculated in accordance with subsection\n\nG of this section.\n\nC. 1. Upon termination of a netting agreement or qualified\n\nfinancial contract, the net or settlement amount, if any, owed by a\nagreement or contract, damages shall be measured as\n\nof the date or dates of termination, liquidation, closeout, or\n\nacceleration. The amount of a claim for damages shall be actual\n\ndirect compensatory damages calculated in accordance with subsection\n\nG of this section.\n\nC. 1. Upon termination of a netting agreement or qualified\n\nfinancial contract, the net or settlement amount, if any, owed by a\n\nnon-defaulting party to an insurer against which an application or\n\npetition has been filed under this section shall be transferred to\n\nor on the order of the receiver for the insurer, even if the insurer\n\nis the defaulting party, notwithstanding any walkaway clause in the\n\nnetting agreement or qualified financial contract.\n\n2. Any limited two-way payment or first method provision in a\n\nnetting agreement or qualified financial contract with an insurer\n\nwhich has defaulted shall be deemed to be a full two-way payment or\n\nsecond method provision as against the defaulting insurer. Any such\n\nproperty or amount shall, except to the extent it is subject to one\n\nor more secondary liens or encumbrances or rights of netting or\n\nsetoff, be a general asset of the insurer.\n\nD. In making any transfer of a netting agreement or qualified\n\nfinancial contract of an insurer subject to a proceeding under this\n\nsection, the receiver shall either:\n\n1. Transfer to one party, other than an insurer subject to a\n\nproceeding under this section, all netting agreements and qualified\n\nfinancial contracts between a counterparty or any affiliate of the\n\ncounterparty and the insurer which is the subject of the proceeding,\n\nincluding:\n\na. all rights and obligations of each party under each\n\nnetting agreement and qualified financial contract,\n\nand\n\nb. all property, including any guarantees or other credit\n\nenhancement, securing any claims of each party under\n\neach netting agreement and qualified financial\n\ncontract; or\n\n2. Transfer none of the netting agreements, qualified financial\n\ncontracts, rights, obligations, or property referred to in paragraph\n\n1 of this subsection, with respect to the counterparty and any\n\naffiliate of the counterparty.\n\nE. If a receiver for an insurer makes a transfer of one or more\n\nnetting agreements or qualified financial contracts, then the\n\nreceiver shall use its best efforts to notify any person who is\n\nparty to the netting agreements or qualified financial contracts of\n\nthe transfer by twelve o'clock p.m. on the business day following\n\nthe transfer.\n\nF. Notwithstanding any other provision of the Oklahoma\n\nInsurance Code, a receiver shall not avoid a transfer of money or\n\nother property arising under or in connection with a netting\n\nagreement, qualified financial contract, or any pledge, security,\n\ncollateral or guarantee agreement, or any other similar security\n\narrangement or credit support document relating to a netting\n\nagreement or qualified financial contract which is made before the\n\ncommencement of a formal delinquency proceeding under this Code.\n\nProvided, however, a transfer may be avoided under Section 1926 of\n\nTitle 36 of the Oklahoma Statutes if the transfer was made with\n\nactual intent to hinder, delay, or defraud the insurer, a receiver\n\nappointed for the insurer, or existing or future creditors.\n\nG. 1. In exercising the rights of disaffirmance or repudiation\n\nof a receiver with respect to any netting agreement or qualified\n\nfinancial contract to which an insurer is a party, the receiver for\n\nthe insurer shall either:\n\na. disaffirm or repudiate all netting agreements and\n\nqualified financial contracts between a counterparty\n\nor any affiliate of the counterparty and the insurer\n\nwhich is the subject of the proceeding, or\n\nb. disaffirm or repudiate none of the netting agreements\n\nand qualified financial contracts referred to in\n\nsubparagraph a of this paragraph with respect to the\n\nperson or any affiliate of the person or entity.\nrepudiate all netting agreements and\n\nqualified financial contracts between a counterparty\n\nor any affiliate of the counterparty and the insurer\n\nwhich is the subject of the proceeding, or\n\nb. disaffirm or repudiate none of the netting agreements\n\nand qualified financial contracts referred to in\n\nsubparagraph a of this paragraph with respect to the\n\nperson or any affiliate of the person or entity.\n\n2. Notwithstanding any other provision of this Code, any claim\n\nof a counterparty against the estate arising from the receiver's\n\ndisaffirmance or repudiation of a netting agreement or qualified\n\nfinancial contract which has not been previously affirmed in the\n\nliquidation or immediately preceding a conservation or\n\nrehabilitation case shall be determined and shall be allowed or\n\ndisallowed as if the claim had arisen before the date of the filing\n\nof the petition for liquidation or, if a conservation or\n\nrehabilitation proceeding is converted to a liquidation proceeding,\n\nas if the claim had arisen before the date of the filing of the\n\npetition for conservation or rehabilitation. The amount of the\n\nclaim shall be the actual direct compensatory damages determined as\n\nof the date of the disaffirmance or repudiation of the netting\n\nagreement or qualified financial contract.\n\nH. The provisions of this section shall not apply to persons or\n\nentities who are affiliates of the insurer which is the subject of\n\nthe proceeding.\n\nI. All rights of counterparties under this Code shall apply to\n\nnetting agreements and qualified financial contracts entered into on\n\nbehalf of the general account or separate accounts if the assets of\n\neach separate account are available only to counterparties to\n\nnetting agreements and qualified financial contracts entered into on\n\nbehalf of the separate account.","path":["OK Code","Title 36"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os36.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"e66c849eb0635121863c0aad86ebc8c523049ad70b800cc251135505d66066c9","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-36-36-1926","next":"us-ok/okla.-stat.-tit.-36-36-1927.1"},"notice":"GroundRules: Original legal text. Not legal advice."}