Impaired or insolvent insurers: Liability for unpaid assessments of insureds; maintenance and disclosure of records of Association; status of Association as creditor; distribution of ownership by court.
1. This chapter does not reduce the liability for unpaid assessments of the insureds of an impaired insurer operating under a plan with liability for assessments.
2. Records must be kept of all meetings of the Board of Directors to discuss the activities of the Association in carrying out its powers and duties under NRS 686C.150 to 686C.220, inclusive. The records of the Association with respect to an impaired or insolvent insurer may not be disclosed before the termination of a proceeding for liquidation, rehabilitation or conservation involving the impaired or insolvent insurer or the termination of the impairment or insolvency of the insurer, except upon the order of a court of competent jurisdiction. This subsection does not limit the duty of the Association to render a report of its activities under NRS 686C.350.
3. For the purpose of carrying out its obligations under this chapter, the Association shall be deemed to be a creditor of the impaired or insolvent insurer to the extent of assets attributable to covered policies reduced by any amounts to which the Association is entitled as subrogee pursuant to NRS 686C.200. Assets of the impaired or insolvent insurer attributable to covered policies must be used to continue all covered policies and pay all contractual obligations of the impaired or insolvent insurer as required by this chapter. Assets attributable to covered policies, as used in this subsection, are that proportion of the assets which the reserves that should have been established for covered policies bear to the reserves that should have been established for all policies of insurance written by the impaired or insolvent insurer.
4. As a creditor of the impaired or insolvent insurer under subsection 3 and consistent with NRS 696B.415, the Association and other similar associations are entitled to receive a disbursement out of the marshaled assets, from time to time as the assets become available to reimburse it, as a credit against contractual obligations under this chapter. If the liquidator has not, within 120 days after a final determination of insolvency of an insurer by the court in the insolvent or impaired insurer’s state which has jurisdiction over the conservation, rehabilitation or liquidation of the insurer, made an application to the court for the approval of a proposal to disburse assets out of marshaled assets to guaranty associations having obligations because of the insolvency, the Association is entitled to make application to the court for approval of its own proposal to disburse those assets.
5. Before the termination of any proceeding for liquidation, rehabilitation or conservation, the court may take into consideration the contributions of the respective parties, including the Association, the shareholders and owners of policies and contracts of the impaired or insolvent insurer, and any other party with a bona fide interest, in making an equitable distribution of the ownership of the impaired or insolvent insurer. In making such a determination, consideration must be given to the welfare of the owners of policies issued by the continuing or successor insurer. No distribution to stockholders, if any, of an impaired or insolvent insurer may be made until the total amount of valid claims of the Association, with interest thereon, for money expended in exercising its powers and performing its duties under NRS 686C.150 to 686C.155, inclusive, with respect to that insurer have been fully recovered by the Association.
Last modified: February 27, 2006