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NOTICE: This opinion is subject to motions for rehearing under Rule 22 as well as formal revision before publication in the New Hampshire Reports. Readers are requested to notify the Reporter, Supreme Court of New Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any editorial errors in order that corrections may be made before the opinion goes to press. Errors may be reported by E-mail at the following address: reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 a.m. on the morning of their release. The direct address of the court's home page is: http://www.courts.state.nh.us/supreme. THE SUPREME COURT OF NEW HAMPSHIRE ___________________________ Merrimack No. 2008-407 IN THE MATTER OF THE LIQUIDATION OF THE HOME INSURANCE COMPANY Argued: March 12, 2009 Opinion Issued: May 7, 2009 Kelly A. Ayotte, attorney general (J. Christopher Marshall, attorney, on the brief), and Rackemann, Sawyer & Brewster P.C., of Boston, Massachusetts (J. David Leslie and Eric A. Smith on the brief, and Mr. Leslie orally), for the respondent. Orr & Reno, P.A., of Concord (Lisa Snow Wade on the brief), and Morrison & Foerster LLP, of New York, New York (Gary S. Lee & a. on the brief, and Brian R. Matsui orally), for the appellee. DALIANIS, J. The respondent, Roger A. Sevigny, Commissioner of Insurance of the State of New Hampshire, as liquidator of The Home Insurance Company (the liquidator), appeals an order of the Superior Court (Conboy, J.) sustaining a referee's ruling granting a setoff claim asserted by the appellee, Century Indemnity Company (CIC), in the liquidation of The Home Insurance Company (Home). We reverse and remand.

This is the fourth in a series of opinions we have issued in connection with the liquidation of Home. See In the Matter of Liquidation of Home Ins. Co., 154 N.H. 472 (2006) (Home I); In the Matter of Liquidation of Home Ins. Co., 157 N.H. 543 (2008) (Home II); In the Matter of Liquidation of Home Ins. Co., 158 N.H. __, 965 A.2d 1143 (2009) (Home III). The following facts either are drawn from our prior opinions or are supported by the record in the instant appeal. Home is an insurance company, organized under the laws of New Hampshire, which was declared insolvent and placed in liquidation in 2003. Home II, 157 N.H. at 544. The liquidator is vested with title to and charged with administering and collecting Home's assets for distribution to Home's creditors. Home I, 154 N.H. at 475. All persons asserting claims against Home must file proofs of claim in the New Hampshire liquidation proceeding. Id. CIC is an insurance company organized under the laws of Pennsylvania, which reinsures Home with respect to certain contracts between Home and other insurers. Home II, 157 N.H. at 544-45. As claims under these contracts are allowed against Home in liquidation, CIC remits funds to Home pursuant to an agreed-upon claims protocol. Id. at 545. This means that for the purposes of the liquidation proceeding, CIC is a debtor of Home. The claims protocol provides that these payments "shall be net of set off in compliance with" RSA 402-C:34 (2006), or as otherwise allowed under New Hampshire law. Id. "Setoff is the process by which two contracting parties reduce mutual debts and credits to arrive at a net balance." Branum & a., Setoffs, Recoupments, & Voidable Preferences

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New Hampshire Law