Section 27-42-11

Settlement and payment of claims; recovery.

(a) Any person recovering under this chapter shall be deemed to have assigned his or her rights under the policy to the association to the extent of his or her recovery from the association. Every insured or claimant seeking the protection of this chapter shall cooperate with the association to the same extent as such person would have been required to cooperate with the insolvent insurer. The association shall have no cause of action against the insured of the insolvent insurer for any sums it has paid out except for those causes of action the insolvent insurer would have had if such sums had been paid by the insolvent insurer and except as provided in subsection (d) below. In the case of an insolvent insurer operating on a plan with assessment liability, payments of claims of the association may not operate to reduce the liability of insureds to the receiver, liquidator, or statutory successor for unpaid assessments.

(b) The receiver, liquidator, or statutory successor of an insolvent insurer shall be bound by settlements of covered claims by the association or a similar organization in another state. The court having jurisdiction shall grant these claims priority equal to that which the claimant would have been entitled in the absence of this chapter against the assets of the insolvent insurer. The expenses of the association or similar organization in handling claims shall be accorded the same priority as the liquidator's expenses.

(c) The association shall periodically file with the receiver or liquidator of the insolvent insurer statements of the covered claims paid by the association and estimates of anticipated claims on the association which shall preserve the rights of the association against the assets of the insolvent insurer.

(d) The association shall have the right to recover from the following persons the amount of any covered claim paid on behalf of the person:

(1) An insured whose net worth on December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer exceeds twenty-five million dollars ($25,000,000) and whose liability obligations, including obligations under workers' compensation insurance coverages, to other persons are satisfied in whole or in part by the payments.

(2) Any person who is an affiliate of the insolvent insurer and whose liability obligations, including obligations under workers' compensation insurance coverages, to other persons are satisfied in whole or in part by the payments.

(Acts 1980, No. 80-806, p. 1639, §11; Act 2000-743, p. 1650, §1.)