b'TABLE OF CONTENTSModel Act provide that any affiliate that is a party to an agreement with a domestic insurer that is integral to the domestic insurers operations or essential to the insurers ability to fulfill its obligations under insurance policies shall be subject to the same receivership proceedings as the domestic insurer. The commissioner may require that the terms of the agreement between the domestic insurer and the affiliate expressly provide for the affiliates consent to such jurisdictions supervision or receivership laws. This last provision could create an interesting conflict with the US Bankruptcy Code. The exclusion of domestic insurance companies from being eligible debtors under the US Bankruptcy Code leaves the field wide open for delinquency proceedings for insurers to be governed by state insurance codes. However, there is no such exclusion in the US Bankruptcy code for affiliates of insurers (unless they are themselves insurers). If an insurer becomes subject to a state insurance receivership proceeding, and its affiliate becomes a debtor in a US bankruptcy proceeding, it is conceivable that there could be a clash between orders of the US Bankruptcy Court applicable to the affiliate and orders issued by the state receivership court that affect the affiliate. This could also implicate provisions of the McCarran-Ferguson Act, which seeks to define the boundary between state insurance regulation and federal law, and could end up being litigated in federal court.MAYER BROWN |99'