Alternative policies: Adoption; approval; contents; premium; coverage.
1. Alternative policies adopted by the Association are subject to the approval of the Commissioner and the court in the insolvent or impaired insurer’s state which has jurisdiction over the conservation, rehabilitation or liquidation of the insurer. The Association may adopt alternative policies of various types for future issuance without regard to any particular impairment or insolvency.
2. An alternative policy must contain at least the minimum statutory provisions required in this state and provide benefits that are not unreasonable in relation to the premium charged. The Association shall set the premium in accordance with a table of rates which it shall adopt. The premium must reflect the amount of insurance to be provided and the age and class of risk of each insured, but must not reflect any changes in the health of the insured after the original policy was last underwritten.
3. An alternative policy issued by the Association must provide coverage of a type similar to that of the policy issued by the impaired or insolvent insurer, as determined by the Association.
4. If the Association elects to reissue terminated coverage at a rate of premium different from that charged under the terminated policy, the premium must be set by the Association in accordance with the amount of insurance provided and the age and class of risk, subject to approval by the Commissioner and the court described in subsection 1.
Last modified: February 27, 2006