As used in this chapter:
(1) "Commissioner" means the Insurance Commissioner;
(2) (A) (i) "Covered claim" means an unpaid claim of an insured or third-party liability claimant which arises out of and is within the coverage and not in excess of the applicable limits of an insurance policy to which this chapter applies, and which is issued or assumed, whereby an assumption certificate is issued to the insured, by an insurer licensed to do business in this state, in cases in which the insurer becomes an insolvent insurer and the third-party claimant or liability claimant or insured is a resident of this state at the time of the insured event, or the property from which the claim arises is permanently located in this state.
(ii) Covered claims shall also include one hundred percent (100%) of unearned premiums up to an amount not exceeding twenty-five thousand dollars ($25,000) per policy.
(iii) Individual covered claims shall be limited to three hundred thousand dollars ($300,000) and shall not include any amount in excess of three hundred thousand dollars ($300,000).
(B) A covered claim shall not include an unpaid claim of an insured or third-party liability claimant whose net worth as of December 31 of the year next preceding the date the insurer becomes an insolvent insurer exceeds fifty million dollars ($50,000,000). However, an insured's or third-party liability claimant's net worth on that date shall be deemed to include the aggregate net worth of the insured or third-party liability claimant and all of its affiliates as calculated on a consolidated basis.
(C) A covered claim shall not include any of the following amounts:
(i) Any amount awarded as punitive or exemplary damages;
(ii) Any amount sought as return of premium under any retrospective rating plan; or
(iii) Any amount due to any reinsurer, insurer, insurance pool, or underwriting association as subrogation recoveries or otherwise. This subdivision (2) shall not prevent the reinsurer, insurer, insurance pool, or underwriting association from presenting the excluded claim to the insolvent insurer or the liquidator, but the claim shall not be asserted against any other person, including the person to whom benefits were paid or the insured of the insolvent insurer, except to the extent that the claim is outside the coverage provided herein or is in excess of the limits of the policy issued by the insolvent insurer.
(D) (i) A covered claim shall not include supplementary payment obligations, including, but not limited to, adjustment fees and expenses, attorney's fees and expenses, court costs, interest, and bond premiums incurred prior to the determination that an insurer is an insolvent insurer under this chapter;
(ii) With respect to a covered claim for unearned premiums, persons who were residents of this state at the time the policy was issued and persons who are residents of this state at the time the company is found to be an insolvent insurer shall be considered to have covered claims under this chapter;
(3) "Insolvent insurer" means an insurer which, after March 30, 1977, is determined to be insolvent by a court of competent jurisdiction;
(4) (A) "Insurer" means any person who writes any kind of insurance to which this chapter applies under § 23-90-104, including the exchange of reciprocal or inter-insurance contracts, and is licensed to transact insurance in this state.
(B) However, this chapter shall not apply to those persons transacting business as a farmers' mutual aid association pursuant to §§ 23-73-101 -- 23-73-107, 23-73-110 -- 23-73-114, and 23-73-116;
(5) (A) "Net direct written premiums" means the gross amount of premiums received from policies of insurance issued in this state to which this chapter applies, less return premiums and dividends paid or credited to policyholders.
(B) "Net direct written premiums" does not include premiums for indemnity reinsurance accepted from other licensed insurers, and there shall be no deductions for premiums for indemnity reinsurance ceded to other insurers;
(6) "Payment of covered claims" means actual payment and also means utilization of funds derived from assessments for consummation of contracts of reinsurance or assumption of liabilities or contracts of substitution to provide for liabilities for covered claims; and
(7) "Person" means any individual, corporation, partnership, association, or voluntary organization.
Section: Previous 23-90-102 23-90-103 23-90-104 23-90-105 23-90-106 23-90-107 23-90-108 23-90-109 23-90-110 23-90-111 23-90-112 23-90-113 23-90-114 23-90-115 NextLast modified: November 15, 2016