(1) In every winding up, the assets, wherever situated, of an undertaking representing technical reserves required to be established and maintained pursuant to the Regulations of 1976 or the Regulations of 1984, as the case may be, shall, without prejudice to any right of priority under the Companies Acts, or any other enactment, be utilised to discharge debts arising under contracts of insurance made pursuant to its authorisation in priority to other debts.
(2) For the purpose of this section any amount recovered from a reinsurer under a contract of reinsurance relating to a contract of insurance mentioned in subsection (1) shall form part of the said technical reserves.