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 subsections (d), (e), (f), (g), and (h) 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 not be obligated to pay any first party claims by a high net worth insured.
(e) The association shall have the right to recover from a high net worth insured all amounts paid by the association to or on behalf of such insured, whether for indemnity, defense, or otherwise.
(f) The association shall have the right to recover from any person who is an affiliate of the insolvent insurer all amounts paid by the association to or on behalf of such person, whether for indemnity, defense, or otherwise.
(g) The association shall establish procedures for requesting financial information from insureds and claimants on a confidential basis for purposes of applying sections concerning the net worth of insureds or first party and third party claimants, subject to such information being shared with any other association similar to the association and the liquidator for the insolvent insurer on the same confidential basis. If the insured or claimant refuses to provide the requested financial information, the association may deem the net worth of the insured or claimant to be in excess of twenty-five million dollars ($25,000,000) at the relevant time.
(h) In any lawsuit contesting the applicability of this section or the exclusion from covered claims of claims by high net worth insureds embodied in subdivisions (6) and (7) of Section 27-42-5, where the insured has refused to provide financial information under the procedure established pursuant to subsection (g), there shall be a rebuttable presumption that the insured's net worth exceeded twenty-five million dollars ($25,000,000) at the relevant time. If the court finds that the insured's net worth exceeded twenty-five million dollars ($25,000,000) at the relevant time the court may award to the association attorney's fees and costs.
(i) The association and any association similar to the association in another state shall be recognized as claimants in the liquidation of an insolvent insurer for any amounts paid by them on covered claims obligations as determined under this chapter, or similar laws in other states, and shall receive dividends and any other distributions at the priority set forth for policyholder claims in the liquidation proceeding. The receiver, liquidator, or statutory successor of an insolvent insurer shall be bound by determinations of covered claim eligibility under this chapter and by settlements of claims made by the association or a similar organization in another state. The court having jurisdiction shall grant the 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.
(Acts 1980, No. 80-806, p. 1639, §11; Act 2000-743, p. 1650, §1; Act 2009-716, p. 2108, §1; Act 2018-526, §1.)