A. In all cases of mutual debts or mutual credits between the insurer and another person, whether arising out of one or more contracts between the insurer and another person, in connection with any action or proceeding under this article, such credits and debts shall be offset and the balance only shall be allowed or paid, except as provided in subsection B of this section.

B. No offset shall be allowed if:

1. The obligation of the insurer would not, at the date of the entry of any liquidation order or otherwise as provided in Section 1925 of this title, entitle the claimant to share in the assets of the insurer;

2. The obligation of the insurer was purchased by or transferred to the claimant to be used as an offset;

3. The obligation is to pay an assessment levied against the members of a mutual insurer, or against the subscribers of a reciprocal insurer, or to pay a balance upon the subscription to the capital stock of a stock insurer;

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

5. The obligation of the person is owed to an affiliate of the insurer, or any other entity or association other than the insurer; or

6. The obligation between the person and the insurer arises from business where either the person or the insurer has assumed risks and obligations from the other party and then has ceded back to that party substantially the same risks and obligations.

Added by Laws 1957, p. 301, § 1828, operative July 1, 1957. Renumbered from § 1828 of this title by Laws 1975, c. 316, § 12, emerg. eff. June 12, 1975. Amended by Laws 1988, c. 252, § 2, eff. Nov. 1, 1988; Laws 1996, c. 246, § 8, eff. July 1, 1996; Laws 1997, c. 156, § 3, eff. Nov. 1, 1997; Laws 1999, c. 333, § 4, eff. July 1, 1999; Laws 2004, c. 274, § 11, eff. July 1, 2004.