(1) Be obligated to theextent of the covered claims existing prior to the determination of insolvencyand arising within 30 days after the determination of insolvency, or before thepolicy expiration date if less than 30 days after the determination, or beforethe insured replaces the policy or causes its cancellation, if he does sowithin 30 days of the determination. This obligation includes only the amountof each covered claim that is in excess of fifty dollars ($50.00) and is lessthan three hundred thousand dollars ($300,000). However, the Association shallpay the full amount of a covered claim for benefits under a workers'compensation insurance coverage, and shall pay an amount not exceeding tenthousand dollars ($10,000) per policy for a covered claim for the return ofunearned premium. The Association has no obligation to pay a claimant's coveredclaim, except a claimant's workers' compensation claim, if:
a. The insured hadprimary coverage at the time of the loss with a solvent insurer equal to or inexcess of three hundred thousand dollars ($300,000) and applicable to theclaimant's loss; or
b. The insured'scoverage is written subject to a self‑insured retention equal to or inexcess of three hundred thousand dollars ($300,000).
If theprimary coverage or the self‑insured retention is less than three hundredthousand dollars ($300,000), the Association's obligation to the claimant isreduced by the coverage and the retention. The Association shall pay the fullamount of a covered claim for benefits under a workers' compensation insurancecoverage to a claimant notwithstanding any self‑insured retention, butthe Association has the right to recover the amount of the self‑insuredretention from the employer.
In noevent shall the Association be obligated to a policyholder or claimant in anamount in excess of the obligation of the insolvent insurer under the policyfrom which the claim arises. Notwithstanding any other provision of thisArticle, a covered claim shall not include any claim filed with the Associationafter the final date set by the court for the filing of claims against theliquidator or receiver of an insolvent insurer.
(2) Be deemed theinsurer to the extent of the Association's obligation on the covered claims andto such extent shall have all rights, duties, and obligations of the insolventinsurer as if the insurer had not become insolvent. However, the Associationhas the right but not the obligation to defend an insured who is not a residentof this State at the time of the insured event unless the property from whichthe claim arises is permanently located in this State in which instance theAssociation does have the obligation to defend the matter in accordance withpolicy.
(3) Allocate claims paidand expenses incurred among the two accounts separately, and assess memberinsurers separately for each account amounts necessary to pay the obligation ofthe Association under subsection (a) above subsequent to an insolvency, theexpenses of handling covered claims subsequent to an insolvency, the cost ofexaminations under G.S. 58‑48‑60 and other expenses authorized bythis Article. The assessments of each member insurer shall be in the proportionthat the net direct written premiums of the member insurer for the precedingcalendar year on the kinds of insurance in the account bears to the net directwritten premiums of all member insurers for the preceding calendar year on thekinds of insurance in the account; provided, for purposes of assessment only,premiums otherwise reportable by a servicing insurer under any plan ofoperation approved by the Commissioner of Insurance under Articles 45 or 46 ofthis Chapter shall not be deemed to be the net direct written premiums of suchservicing insurer or association, but shall be deemed to be the net directwritten premiums of the individual insurers to the extent provided for in anysuch plan of operation. Each member insurer shall be notified of the assessmentnot later than 30 days before it is due. No member insurer may be assessed inany year on any account an amount greater than two percent (2%) of that memberinsurer's net direct written premiums for the preceding calendar year on thekinds of insurance in the account. If the maximum assessment, together with theother assets of the Association in any account, does not provide in any oneyear in any account an amount sufficient to make all necessary payments fromthat account, the funds available shall be prorated and the unpaid portionshall be paid as soon thereafter as funds become available. The Association mayexempt or defer, in whole or in part, the assessment of any member insurer, ifthe assessment would cause the member insurer's financial statement to reflectamounts of capital or surplus less than the minimum amounts required for alicense by any jurisdiction in which the member insurer is authorized totransact insurance. Each member insurer may set off against any assessment,authorized payments made on covered claims and expenses incurred in the paymentof such claims by the member insurer if they are chargeable to the account forwhich the assessment is made.
(4) Investigate claimsbrought against the Association and adjust, compromise, settle, and pay coveredclaims to the extent of the Association's obligation and deny all other claimsand may review settlements, releases and judgments to which the insolventinsurer or its insureds were parties to determine the extent to which suchsettlements, releases and judgments may be properly contested.
(5) Notify such personsas the Commissioner directs under G.S. 58‑48‑45(b)(1).
(6) Handle claimsthrough its employees or through one or more insurers or other personsdesignated as servicing facilities. Designation of a servicing facility issubject to the approval of the Commissioner, but such designation may bedeclined by a member insurer.
(7) Reimburse eachservicing facility for obligations of the Association paid by the facility andfor expenses incurred by the facility while handling claims on behalf of theAssociation and shall pay the other expenses of the Association authorized bythis Article.
(b) The Associationmay:
(1) Employ or retainsuch persons as are necessary to handle claims and perform other duties of theAssociation.
(2) Borrow fundsnecessary to effect the purposes of this Article in accord with the plan ofoperation.
(3) Sue or be sued.
(4) Negotiate and becomea party to such contracts as are necessary to carry out the purpose of this Article.
(5) Perform such otheracts as are necessary or proper to effectuate the purpose of this Article.
(6) Refund to the memberinsurers in proportion to the contribution of each member insurer to thataccount that amount by which the assets of the account exceed the liabilitiesif, at the end of any calendar year, the board of directors finds that theassets of the Association in any account exceed the liabilities of that accountas estimated by the board of directors for the coming year.
(7) Be designated or maycontract as a servicing facility for any entity which may be recommended by theAssociation's board of directors and approved by the Commissioner of Insurance. (1971, c. 670,s. 1; 1977, c. 343; 1979, c. 295, s. 1; 1985, c. 613, ss. 5, 6; 1989, c. 206,s. 3; 1991 (Reg. Sess., 1992), c. 802, s. 4; 1999‑132, s. 9.1; 2009‑130,s. 1.)
(1) Be obligated to theextent of the covered claims existing prior to the determination of insolvencyand arising within 30 days after the determination of insolvency, or before thepolicy expiration date if less than 30 days after the determination, or beforethe insured replaces the policy or causes its cancellation, if he does sowithin 30 days of the determination. This obligation includes only the amountof each covered claim that is in excess of fifty dollars ($50.00) and is lessthan three hundred thousand dollars ($300,000). However, the Association shallpay the full amount of a covered claim for benefits under a workers'compensation insurance coverage, and shall pay an amount not exceeding tenthousand dollars ($10,000) per policy for a covered claim for the return ofunearned premium. The Association has no obligation to pay a claimant's coveredclaim, except a claimant's workers' compensation claim, if:
a. The insured hadprimary coverage at the time of the loss with a solvent insurer equal to or inexcess of three hundred thousand dollars ($300,000) and applicable to theclaimant's loss; or
b. The insured'scoverage is written subject to a self‑insured retention equal to or inexcess of three hundred thousand dollars ($300,000).
If theprimary coverage or the self‑insured retention is less than three hundredthousand dollars ($300,000), the Association's obligation to the claimant isreduced by the coverage and the retention. The Association shall pay the fullamount of a covered claim for benefits under a workers' compensation insurancecoverage to a claimant notwithstanding any self‑insured retention, butthe Association has the right to recover the amount of the self‑insuredretention from the employer.
In noevent shall the Association be obligated to a policyholder or claimant in anamount in excess of the obligation of the insolvent insurer under the policyfrom which the claim arises. Notwithstanding any other provision of thisArticle, a covered claim shall not include any claim filed with the Associationafter the final date set by the court for the filing of claims against theliquidator or receiver of an insolvent insurer.
(2) Be deemed theinsurer to the extent of the Association's obligation on the covered claims andto such extent shall have all rights, duties, and obligations of the insolventinsurer as if the insurer had not become insolvent. However, the Associationhas the right but not the obligation to defend an insured who is not a residentof this State at the time of the insured event unless the property from whichthe claim arises is permanently located in this State in which instance theAssociation does have the obligation to defend the matter in accordance withpolicy.
(3) Allocate claims paidand expenses incurred among the two accounts separately, and assess memberinsurers separately for each account amounts necessary to pay the obligation ofthe Association under subsection (a) above subsequent to an insolvency, theexpenses of handling covered claims subsequent to an insolvency, the cost ofexaminations under G.S. 58‑48‑60 and other expenses authorized bythis Article. The assessments of each member insurer shall be in the proportionthat the net direct written premiums of the member insurer for the precedingcalendar year on the kinds of insurance in the account bears to the net directwritten premiums of all member insurers for the preceding calendar year on thekinds of insurance in the account; provided, for purposes of assessment only,premiums otherwise reportable by a servicing insurer under any plan ofoperation approved by the Commissioner of Insurance under Articles 45 or 46 ofthis Chapter shall not be deemed to be the net direct written premiums of suchservicing insurer or association, but shall be deemed to be the net directwritten premiums of the individual insurers to the extent provided for in anysuch plan of operation. Each member insurer shall be notified of the assessmentnot later than 30 days before it is due. No member insurer may be assessed inany year on any account an amount greater than two percent (2%) of that memberinsurer's net direct written premiums for the preceding calendar year on thekinds of insurance in the account. If the maximum assessment, together with theother assets of the Association in any account, does not provide in any oneyear in any account an amount sufficient to make all necessary payments fromthat account, the funds available shall be prorated and the unpaid portionshall be paid as soon thereafter as funds become available. The Association mayexempt or defer, in whole or in part, the assessment of any member insurer, ifthe assessment would cause the member insurer's financial statement to reflectamounts of capital or surplus less than the minimum amounts required for alicense by any jurisdiction in which the member insurer is authorized totransact insurance. Each member insurer may set off against any assessment,authorized payments made on covered claims and expenses incurred in the paymentof such claims by the member insurer if they are chargeable to the account forwhich the assessment is made.
(4) Investigate claimsbrought against the Association and adjust, compromise, settle, and pay coveredclaims to the extent of the Association's obligation and deny all other claimsand may review settlements, releases and judgments to which the insolventinsurer or its insureds were parties to determine the extent to which suchsettlements, releases and judgments may be properly contested.
(5) Notify such personsas the Commissioner directs under G.S. 58‑48‑45(b)(1).
(6) Handle claimsthrough its employees or through one or more insurers or other personsdesignated as servicing facilities. Designation of a servicing facility issubject to the approval of the Commissioner, but such designation may bedeclined by a member insurer.
(7) Reimburse eachservicing facility for obligations of the Association paid by the facility andfor expenses incurred by the facility while handling claims on behalf of theAssociation and shall pay the other expenses of the Association authorized bythis Article.
(b) The Associationmay:
(1) Employ or retainsuch persons as are necessary to handle claims and perform other duties of theAssociation.
(2) Borrow fundsnecessary to effect the purposes of this Article in accord with the plan ofoperation.
(3) Sue or be sued.
(4) Negotiate and becomea party to such contracts as are necessary to carry out the purpose of this Article.
(5) Perform such otheracts as are necessary or proper to effectuate the purpose of this Article.
(6) Refund to the memberinsurers in proportion to the contribution of each member insurer to thataccount that amount by which the assets of the account exceed the liabilitiesif, at the end of any calendar year, the board of directors finds that theassets of the Association in any account exceed the liabilities of that accountas estimated by the board of directors for the coming year.
(7) Be designated or maycontract as a servicing facility for any entity which may be recommended by theAssociation's board of directors and approved by the Commissioner of Insurance. (1971, c. 670,s. 1; 1977, c. 343; 1979, c. 295, s. 1; 1985, c. 613, ss. 5, 6; 1989, c. 206,s. 3; 1991 (Reg. Sess., 1992), c. 802, s. 4; 1999‑132, s. 9.1; 2009‑130,s. 1.)
(1) Be obligated to theextent of the covered claims existing prior to the determination of insolvencyand arising within 30 days after the determination of insolvency, or before thepolicy expiration date if less than 30 days after the determination, or beforethe insured replaces the policy or causes its cancellation, if he does sowithin 30 days of the determination. This obligation includes only the amountof each covered claim that is in excess of fifty dollars ($50.00) and is lessthan three hundred thousand dollars ($300,000). However, the Association shallpay the full amount of a covered claim for benefits under a workers'compensation insurance coverage, and shall pay an amount not exceeding tenthousand dollars ($10,000) per policy for a covered claim for the return ofunearned premium. The Association has no obligation to pay a claimant's coveredclaim, except a claimant's workers' compensation claim, if:
a. The insured hadprimary coverage at the time of the loss with a solvent insurer equal to or inexcess of three hundred thousand dollars ($300,000) and applicable to theclaimant's loss; or
b. The insured'scoverage is written subject to a self‑insured retention equal to or inexcess of three hundred thousand dollars ($300,000).
If theprimary coverage or the self‑insured retention is less than three hundredthousand dollars ($300,000), the Association's obligation to the claimant isreduced by the coverage and the retention. The Association shall pay the fullamount of a covered claim for benefits under a workers' compensation insurancecoverage to a claimant notwithstanding any self‑insured retention, butthe Association has the right to recover the amount of the self‑insuredretention from the employer.
In noevent shall the Association be obligated to a policyholder or claimant in anamount in excess of the obligation of the insolvent insurer under the policyfrom which the claim arises. Notwithstanding any other provision of thisArticle, a covered claim shall not include any claim filed with the Associationafter the final date set by the court for the filing of claims against theliquidator or receiver of an insolvent insurer.
(2) Be deemed theinsurer to the extent of the Association's obligation on the covered claims andto such extent shall have all rights, duties, and obligations of the insolventinsurer as if the insurer had not become insolvent. However, the Associationhas the right but not the obligation to defend an insured who is not a residentof this State at the time of the insured event unless the property from whichthe claim arises is permanently located in this State in which instance theAssociation does have the obligation to defend the matter in accordance withpolicy.
(3) Allocate claims paidand expenses incurred among the two accounts separately, and assess memberinsurers separately for each account amounts necessary to pay the obligation ofthe Association under subsection (a) above subsequent to an insolvency, theexpenses of handling covered claims subsequent to an insolvency, the cost ofexaminations under G.S. 58‑48‑60 and other expenses authorized bythis Article. The assessments of each member insurer shall be in the proportionthat the net direct written premiums of the member insurer for the precedingcalendar year on the kinds of insurance in the account bears to the net directwritten premiums of all member insurers for the preceding calendar year on thekinds of insurance in the account; provided, for purposes of assessment only,premiums otherwise reportable by a servicing insurer under any plan ofoperation approved by the Commissioner of Insurance under Articles 45 or 46 ofthis Chapter shall not be deemed to be the net direct written premiums of suchservicing insurer or association, but shall be deemed to be the net directwritten premiums of the individual insurers to the extent provided for in anysuch plan of operation. Each member insurer shall be notified of the assessmentnot later than 30 days before it is due. No member insurer may be assessed inany year on any account an amount greater than two percent (2%) of that memberinsurer's net direct written premiums for the preceding calendar year on thekinds of insurance in the account. If the maximum assessment, together with theother assets of the Association in any account, does not provide in any oneyear in any account an amount sufficient to make all necessary payments fromthat account, the funds available shall be prorated and the unpaid portionshall be paid as soon thereafter as funds become available. The Association mayexempt or defer, in whole or in part, the assessment of any member insurer, ifthe assessment would cause the member insurer's financial statement to reflectamounts of capital or surplus less than the minimum amounts required for alicense by any jurisdiction in which the member insurer is authorized totransact insurance. Each member insurer may set off against any assessment,authorized payments made on covered claims and expenses incurred in the paymentof such claims by the member insurer if they are chargeable to the account forwhich the assessment is made.
(4) Investigate claimsbrought against the Association and adjust, compromise, settle, and pay coveredclaims to the extent of the Association's obligation and deny all other claimsand may review settlements, releases and judgments to which the insolventinsurer or its insureds were parties to determine the extent to which suchsettlements, releases and judgments may be properly contested.
(5) Notify such personsas the Commissioner directs under G.S. 58‑48‑45(b)(1).
(6) Handle claimsthrough its employees or through one or more insurers or other personsdesignated as servicing facilities. Designation of a servicing facility issubject to the approval of the Commissioner, but such designation may bedeclined by a member insurer.
(7) Reimburse eachservicing facility for obligations of the Association paid by the facility andfor expenses incurred by the facility while handling claims on behalf of theAssociation and shall pay the other expenses of the Association authorized bythis Article.
(b) The Associationmay:
(1) Employ or retainsuch persons as are necessary to handle claims and perform other duties of theAssociation.
(2) Borrow fundsnecessary to effect the purposes of this Article in accord with the plan ofoperation.
(3) Sue or be sued.
(4) Negotiate and becomea party to such contracts as are necessary to carry out the purpose of this Article.
(5) Perform such otheracts as are necessary or proper to effectuate the purpose of this Article.
(6) Refund to the memberinsurers in proportion to the contribution of each member insurer to thataccount that amount by which the assets of the account exceed the liabilitiesif, at the end of any calendar year, the board of directors finds that theassets of the Association in any account exceed the liabilities of that accountas estimated by the board of directors for the coming year.
(7) Be designated or maycontract as a servicing facility for any entity which may be recommended by theAssociation's board of directors and approved by the Commissioner of Insurance. (1971, c. 670,s. 1; 1977, c. 343; 1979, c. 295, s. 1; 1985, c. 613, ss. 5, 6; 1989, c. 206,s. 3; 1991 (Reg. Sess., 1992), c. 802, s. 4; 1999‑132, s. 9.1; 2009‑130,s. 1.)
