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A new opportunity for U.S. insurers
Modeled after the highly successful Part VII transfer process in the United Kingdom and EU, Oklahoma’s new Insurance Business Transfer (“IBT”) Act provides a unique mechanism for insurers to absolutely transfer blocks of insurance business to another insurance company. The IBT provides the transferring and assuming companies with an efficient and straightforward transfer process while also providing the legal finality that has not yet been available in the United States.
How does it work?
The IBT, once approved, will result in a novation of the transferred contracts of insurance or reinsurance resulting in the assuming insurer becoming directly liable to the policyholders or reinsureds of the transferring insurer and extinguishing the transferring insurer's insurance obligations or risks under the contracts. The IBT must be reviewed and approved by both the Oklahoma Insurance Commissioner and a court of general jurisdiction. The predicate issue is avoidance of a material adverse impact to policyholders.
The process is designed to protect policyholders in the following ways:
Ongoing commitment from Oklahoma regulators
The Oklahoma Insurance Department was not a passive observer as the Oklahoma Legislature considered and ultimately passed the IBT Act in 2018. The bill was requested by Commissioner Doak and its passage was the result of two years of work by Department staff, industry, and the bill’s authors, Senator John Sparks and Representative Glen Mulready. The Department was committed to passing the new law and brings the same level of commitment to the implementation process. We are providing dedicated IBT staff and the resources necessary for each IBT application to be thoroughly and expeditiously reviewed.