(A) The director or his designee shall specify whether policy forms and the rate structure must be on a "claims-made" or "occurrence" basis and coverage may be provided by the association only on the basis specified by the director or his designee. The director or his designee shall specify the claims-made basis only if the contract makes provision for residual occurrence coverage upon the retirement, death, disability, or removal from the State of the insured. Provision may be made for a premium charge allocable to any residual occurrence coverage and the premium charges for the residual coverage must be segregated and separately maintained for such purpose which may include the reinsurance of all or part of that portion of the risk.
(B) The policy may not contain any limitation in relation to the existing law in tort as provided by the statute of limitations of this State.
(C) The policy form whether on a claims-made or occurrence basis may not require as a condition precedent to settlement or compromise of any claim the consent or acquiescence of the insured. However, such settlement or compromise is not considered an admission of fault or wrongdoing by the insured.
(D) The premium rate charged for either or both claims-made or occurrence coverage must be at rates established on an actuarially sound basis, including consideration of trends in the frequency and severity of losses and must be calculated to be self-supporting.
HISTORY: 1988 Act No. 360, Section 10; 1993 Act No. 181, Section 832.