1. Be obligated to pay covered claims that existed prior to the determinationof insolvency and which arose before the earliest of (i) ninety-one daysafter the determination of insolvency, (ii) the policy expiration date, or(iii) the date the insured replaces or cancels the policy.
a. Such obligation shall be satisfied by paying to the claimant an amount asfollows:
(i) The full amount of a covered claim for benefits under a workers'compensation insurance coverage; or
(ii) An amount not exceeding $300,000 per claimant for all other coveredclaims.
b. In no event shall the Association be obligated to pay a claimant for anamount in excess of the insolvent insurer's obligation for a covered claim.Notwithstanding any other provision of this chapter, a covered claim shallnot include any claim filed with the Guaranty Association after the finaldate set by the court for the filing of claims against the liquidator orreceiver of an insolvent insurer. The Association shall pay only that amountof each unearned premium which is in excess of fifty dollars. A covered claimshall not include any claim filed with the Association after the final dateset by the court for the filing of claims against the liquidator or receiverof an insolvent insurer.
2. Be deemed the insurer to the extent of the insolvent insurer's obligationon the covered claims and to that extent shall have all the rights, duties,and obligations of the insolvent insurer as if the insurer had not becomeinsolvent.
3. Allocate claims paid and expenses incurred among the three accounts andassess member insurers separately for each account (i) the amounts necessaryto pay the obligations of the Association under subdivision 1 of thissubsection subsequent to an insolvency, (ii) the expenses of handling coveredclaims subsequent to an insolvency, and (iii) other expenses authorized bythis chapter. The assessment of each member insurer shall be based on theratio of the net direct written premiums of the member insurer to the netdirect written premiums of all member insurers. This ratio shall bedetermined using the premiums for the calendar year preceding the assessmenton the classes of insurance in the account. Each member insurer shall benotified of the assessment at least thirty days before it is due. No memberinsurer may be assessed in any year on any account an amount greater than twopercent of that member insurer's net direct written premiums for the calendaryear preceding the assessment on the classes of insurance in the account. Ifthe sum of the maximum assessment and the assets of the account does notprovide in any one year an amount sufficient to make all necessary paymentsfrom that account, the funds available shall be prorated and the unpaidportion shall be paid as soon as funds become available. The Associationshall pay claims in any order which it may deem reasonable, including thepayment of claims as such are received from the claimants or in groups orcategories of claims. The Association may exempt or defer, in whole or inpart, the assessment of any member insurer if payment of the assessment wouldcause the member insurer's financial statement to reflect an impairment ofthe insurer's minimum capital and surplus in any jurisdiction in which themember insurer is authorized to transact insurance; provided, that during theperiod of deferment, no dividends shall be paid to shareholders orpolicyholders. Deferred assessments shall be paid when the payments shall notcause an impairment of minimum capital and surplus. These payments shall berefunded to those members receiving larger assessments by virtue of thedeferment, or at the election of any such company, credited against futureassessments. Each member insurer may set off against any assessment, paymentsauthorized by the Association and made on covered claims and expensesincurred in the payment of those claims. The offset shall be allowed only ifthe payments are chargeable to the account for which the assessment is made.
3a. The Association shall issue to each insurer paying an assessment underthis chapter, other than assessments paid pursuant to subdivision 3 (iii) ofthis subsection, a certificate of contribution in a form prescribed by theCommission, for the amount of the assessment paid, excluding interestpenalties. All outstanding certificates shall be of equal priority withoutreference to amounts or dates of issue. A certificate of contribution may beshown by the insurer on its financial statement as an asset. This shall beshown in a form, in an amount, and for a period of time approved by theCommission.
4. Investigate claims brought against the Association and adjust, compromise,settle, and pay covered claims to the extent of the Association's obligationand deny all other claims. The Association may review settlements, releasesand judgments to which the insolvent insurer or its insureds were parties todetermine the extent to which the settlements, releases and judgments may beproperly contested.
5. Notify those persons as the Commission directs under subdivision 8 of thissubsection.
6. Handle claims through its employees or through one or more insurers orother persons designated as servicing facilities. Designation of a servicingfacility is subject to (i) the approval of the Commission and (ii) acceptanceby the designated insurer.
7. Reimburse each servicing facility for the Association's obligations paidby the facility and for expenses incurred by the facility while handlingclaims on behalf of the Association. The Association shall pay the otherexpenses authorized by this chapter.
8. Notify the insureds of the insolvent insurer and any other interestedparties of the determination of insolvency and of their rights under thischapter. Notification shall be sent by mail to the insureds' last knownaddress. If the Association is unable to obtain the information required tomail the notice in a timely manner, the Association shall publish the noticein newspapers of general circulation likely to cover geographical areasoccupied by the policyholders.
B. The Association may:
1. Employ or retain persons necessary to perform the duties of theAssociation.
2. Borrow funds necessary to effect the purposes of this chapter in accordwith the plan of operation.
3. Sue or be sued.
4. Negotiate and become a party to those contracts necessary to carry out thepurpose of this chapter.
5. Perform any other acts necessary or proper to achieve the purpose of thischapter.
6. Pay refunds to the member insurers in proportion to their contributionsmade to each account during the five years immediately preceding the date ofthe refund. The total refund shall be the amount by which the assets of theaccount are expected to exceed the liabilities for the coming year asdetermined by the board of directors.
7. Obtain commitments or lines of credit, and in the event a natural disastersuch as an earthquake, windstorm or fire results in covered claims, with theapproval of its board of directors and the Commission, secure indebtednessfor borrowed money to be used for the purpose set forth in subsection A of §38.2-1622 in an amount not to exceed the amount reasonably estimated by itsboard of directors and the Commission as the aggregate amount of assessmentswhich the Association will be authorized to make during the succeedingcalendar year, by pledge, assignment, transfer in trust or hypothecation ofany or all of the assessments to be made against its member insurers.
(1970, c. 766, §§ 38.1-763, 38.1-765; 1971, Ex. Sess., c. 1; 1982, c. 353;1983, c. 486; 1986, c. 562; 1987, cc. 529, 565, 655; 1998, c. 230.)
1. Be obligated to pay covered claims that existed prior to the determinationof insolvency and which arose before the earliest of (i) ninety-one daysafter the determination of insolvency, (ii) the policy expiration date, or(iii) the date the insured replaces or cancels the policy.
a. Such obligation shall be satisfied by paying to the claimant an amount asfollows:
(i) The full amount of a covered claim for benefits under a workers'compensation insurance coverage; or
(ii) An amount not exceeding $300,000 per claimant for all other coveredclaims.
b. In no event shall the Association be obligated to pay a claimant for anamount in excess of the insolvent insurer's obligation for a covered claim.Notwithstanding any other provision of this chapter, a covered claim shallnot include any claim filed with the Guaranty Association after the finaldate set by the court for the filing of claims against the liquidator orreceiver of an insolvent insurer. The Association shall pay only that amountof each unearned premium which is in excess of fifty dollars. A covered claimshall not include any claim filed with the Association after the final dateset by the court for the filing of claims against the liquidator or receiverof an insolvent insurer.
2. Be deemed the insurer to the extent of the insolvent insurer's obligationon the covered claims and to that extent shall have all the rights, duties,and obligations of the insolvent insurer as if the insurer had not becomeinsolvent.
3. Allocate claims paid and expenses incurred among the three accounts andassess member insurers separately for each account (i) the amounts necessaryto pay the obligations of the Association under subdivision 1 of thissubsection subsequent to an insolvency, (ii) the expenses of handling coveredclaims subsequent to an insolvency, and (iii) other expenses authorized bythis chapter. The assessment of each member insurer shall be based on theratio of the net direct written premiums of the member insurer to the netdirect written premiums of all member insurers. This ratio shall bedetermined using the premiums for the calendar year preceding the assessmenton the classes of insurance in the account. Each member insurer shall benotified of the assessment at least thirty days before it is due. No memberinsurer may be assessed in any year on any account an amount greater than twopercent of that member insurer's net direct written premiums for the calendaryear preceding the assessment on the classes of insurance in the account. Ifthe sum of the maximum assessment and the assets of the account does notprovide in any one year an amount sufficient to make all necessary paymentsfrom that account, the funds available shall be prorated and the unpaidportion shall be paid as soon as funds become available. The Associationshall pay claims in any order which it may deem reasonable, including thepayment of claims as such are received from the claimants or in groups orcategories of claims. The Association may exempt or defer, in whole or inpart, the assessment of any member insurer if payment of the assessment wouldcause the member insurer's financial statement to reflect an impairment ofthe insurer's minimum capital and surplus in any jurisdiction in which themember insurer is authorized to transact insurance; provided, that during theperiod of deferment, no dividends shall be paid to shareholders orpolicyholders. Deferred assessments shall be paid when the payments shall notcause an impairment of minimum capital and surplus. These payments shall berefunded to those members receiving larger assessments by virtue of thedeferment, or at the election of any such company, credited against futureassessments. Each member insurer may set off against any assessment, paymentsauthorized by the Association and made on covered claims and expensesincurred in the payment of those claims. The offset shall be allowed only ifthe payments are chargeable to the account for which the assessment is made.
3a. The Association shall issue to each insurer paying an assessment underthis chapter, other than assessments paid pursuant to subdivision 3 (iii) ofthis subsection, a certificate of contribution in a form prescribed by theCommission, for the amount of the assessment paid, excluding interestpenalties. All outstanding certificates shall be of equal priority withoutreference to amounts or dates of issue. A certificate of contribution may beshown by the insurer on its financial statement as an asset. This shall beshown in a form, in an amount, and for a period of time approved by theCommission.
4. Investigate claims brought against the Association and adjust, compromise,settle, and pay covered claims to the extent of the Association's obligationand deny all other claims. The Association may review settlements, releasesand judgments to which the insolvent insurer or its insureds were parties todetermine the extent to which the settlements, releases and judgments may beproperly contested.
5. Notify those persons as the Commission directs under subdivision 8 of thissubsection.
6. Handle claims through its employees or through one or more insurers orother persons designated as servicing facilities. Designation of a servicingfacility is subject to (i) the approval of the Commission and (ii) acceptanceby the designated insurer.
7. Reimburse each servicing facility for the Association's obligations paidby the facility and for expenses incurred by the facility while handlingclaims on behalf of the Association. The Association shall pay the otherexpenses authorized by this chapter.
8. Notify the insureds of the insolvent insurer and any other interestedparties of the determination of insolvency and of their rights under thischapter. Notification shall be sent by mail to the insureds' last knownaddress. If the Association is unable to obtain the information required tomail the notice in a timely manner, the Association shall publish the noticein newspapers of general circulation likely to cover geographical areasoccupied by the policyholders.
B. The Association may:
1. Employ or retain persons necessary to perform the duties of theAssociation.
2. Borrow funds necessary to effect the purposes of this chapter in accordwith the plan of operation.
3. Sue or be sued.
4. Negotiate and become a party to those contracts necessary to carry out thepurpose of this chapter.
5. Perform any other acts necessary or proper to achieve the purpose of thischapter.
6. Pay refunds to the member insurers in proportion to their contributionsmade to each account during the five years immediately preceding the date ofthe refund. The total refund shall be the amount by which the assets of theaccount are expected to exceed the liabilities for the coming year asdetermined by the board of directors.
7. Obtain commitments or lines of credit, and in the event a natural disastersuch as an earthquake, windstorm or fire results in covered claims, with theapproval of its board of directors and the Commission, secure indebtednessfor borrowed money to be used for the purpose set forth in subsection A of §38.2-1622 in an amount not to exceed the amount reasonably estimated by itsboard of directors and the Commission as the aggregate amount of assessmentswhich the Association will be authorized to make during the succeedingcalendar year, by pledge, assignment, transfer in trust or hypothecation ofany or all of the assessments to be made against its member insurers.
(1970, c. 766, §§ 38.1-763, 38.1-765; 1971, Ex. Sess., c. 1; 1982, c. 353;1983, c. 486; 1986, c. 562; 1987, cc. 529, 565, 655; 1998, c. 230.)
1. Be obligated to pay covered claims that existed prior to the determinationof insolvency and which arose before the earliest of (i) ninety-one daysafter the determination of insolvency, (ii) the policy expiration date, or(iii) the date the insured replaces or cancels the policy.
a. Such obligation shall be satisfied by paying to the claimant an amount asfollows:
(i) The full amount of a covered claim for benefits under a workers'compensation insurance coverage; or
(ii) An amount not exceeding $300,000 per claimant for all other coveredclaims.
b. In no event shall the Association be obligated to pay a claimant for anamount in excess of the insolvent insurer's obligation for a covered claim.Notwithstanding any other provision of this chapter, a covered claim shallnot include any claim filed with the Guaranty Association after the finaldate set by the court for the filing of claims against the liquidator orreceiver of an insolvent insurer. The Association shall pay only that amountof each unearned premium which is in excess of fifty dollars. A covered claimshall not include any claim filed with the Association after the final dateset by the court for the filing of claims against the liquidator or receiverof an insolvent insurer.
2. Be deemed the insurer to the extent of the insolvent insurer's obligationon the covered claims and to that extent shall have all the rights, duties,and obligations of the insolvent insurer as if the insurer had not becomeinsolvent.
3. Allocate claims paid and expenses incurred among the three accounts andassess member insurers separately for each account (i) the amounts necessaryto pay the obligations of the Association under subdivision 1 of thissubsection subsequent to an insolvency, (ii) the expenses of handling coveredclaims subsequent to an insolvency, and (iii) other expenses authorized bythis chapter. The assessment of each member insurer shall be based on theratio of the net direct written premiums of the member insurer to the netdirect written premiums of all member insurers. This ratio shall bedetermined using the premiums for the calendar year preceding the assessmenton the classes of insurance in the account. Each member insurer shall benotified of the assessment at least thirty days before it is due. No memberinsurer may be assessed in any year on any account an amount greater than twopercent of that member insurer's net direct written premiums for the calendaryear preceding the assessment on the classes of insurance in the account. Ifthe sum of the maximum assessment and the assets of the account does notprovide in any one year an amount sufficient to make all necessary paymentsfrom that account, the funds available shall be prorated and the unpaidportion shall be paid as soon as funds become available. The Associationshall pay claims in any order which it may deem reasonable, including thepayment of claims as such are received from the claimants or in groups orcategories of claims. The Association may exempt or defer, in whole or inpart, the assessment of any member insurer if payment of the assessment wouldcause the member insurer's financial statement to reflect an impairment ofthe insurer's minimum capital and surplus in any jurisdiction in which themember insurer is authorized to transact insurance; provided, that during theperiod of deferment, no dividends shall be paid to shareholders orpolicyholders. Deferred assessments shall be paid when the payments shall notcause an impairment of minimum capital and surplus. These payments shall berefunded to those members receiving larger assessments by virtue of thedeferment, or at the election of any such company, credited against futureassessments. Each member insurer may set off against any assessment, paymentsauthorized by the Association and made on covered claims and expensesincurred in the payment of those claims. The offset shall be allowed only ifthe payments are chargeable to the account for which the assessment is made.
3a. The Association shall issue to each insurer paying an assessment underthis chapter, other than assessments paid pursuant to subdivision 3 (iii) ofthis subsection, a certificate of contribution in a form prescribed by theCommission, for the amount of the assessment paid, excluding interestpenalties. All outstanding certificates shall be of equal priority withoutreference to amounts or dates of issue. A certificate of contribution may beshown by the insurer on its financial statement as an asset. This shall beshown in a form, in an amount, and for a period of time approved by theCommission.
4. Investigate claims brought against the Association and adjust, compromise,settle, and pay covered claims to the extent of the Association's obligationand deny all other claims. The Association may review settlements, releasesand judgments to which the insolvent insurer or its insureds were parties todetermine the extent to which the settlements, releases and judgments may beproperly contested.
5. Notify those persons as the Commission directs under subdivision 8 of thissubsection.
6. Handle claims through its employees or through one or more insurers orother persons designated as servicing facilities. Designation of a servicingfacility is subject to (i) the approval of the Commission and (ii) acceptanceby the designated insurer.
7. Reimburse each servicing facility for the Association's obligations paidby the facility and for expenses incurred by the facility while handlingclaims on behalf of the Association. The Association shall pay the otherexpenses authorized by this chapter.
8. Notify the insureds of the insolvent insurer and any other interestedparties of the determination of insolvency and of their rights under thischapter. Notification shall be sent by mail to the insureds' last knownaddress. If the Association is unable to obtain the information required tomail the notice in a timely manner, the Association shall publish the noticein newspapers of general circulation likely to cover geographical areasoccupied by the policyholders.
B. The Association may:
1. Employ or retain persons necessary to perform the duties of theAssociation.
2. Borrow funds necessary to effect the purposes of this chapter in accordwith the plan of operation.
3. Sue or be sued.
4. Negotiate and become a party to those contracts necessary to carry out thepurpose of this chapter.
5. Perform any other acts necessary or proper to achieve the purpose of thischapter.
6. Pay refunds to the member insurers in proportion to their contributionsmade to each account during the five years immediately preceding the date ofthe refund. The total refund shall be the amount by which the assets of theaccount are expected to exceed the liabilities for the coming year asdetermined by the board of directors.
7. Obtain commitments or lines of credit, and in the event a natural disastersuch as an earthquake, windstorm or fire results in covered claims, with theapproval of its board of directors and the Commission, secure indebtednessfor borrowed money to be used for the purpose set forth in subsection A of §38.2-1622 in an amount not to exceed the amount reasonably estimated by itsboard of directors and the Commission as the aggregate amount of assessmentswhich the Association will be authorized to make during the succeedingcalendar year, by pledge, assignment, transfer in trust or hypothecation ofany or all of the assessments to be made against its member insurers.
(1970, c. 766, §§ 38.1-763, 38.1-765; 1971, Ex. Sess., c. 1; 1982, c. 353;1983, c. 486; 1986, c. 562; 1987, cc. 529, 565, 655; 1998, c. 230.)
