Introduced By: Representative Pires
Date Introduced : May 18, 1999
It is enacted by the General Assembly as follows:
SECTION 1. Section 27-34-11 of the General Laws in Chapter 27-34 entitled "Rhode Island Insurers' Insolvency Fund" is hereby amended to read as follows:
27-34-11. Effect of paid claims. -- (a) Any person recovering under this chapter shall be deemed to have assigned his or her rights under the policy to the fund to the extent of his recovery from the fund. Every insured or claimant seeking the protection of this chapter shall cooperate with the fund to the same extent as the person would have been required to cooperate with the insolvent insurer. The fund shall have no cause of action against the insured of the insolvent insurer for any sums it has paid out except any causes of action the insolvent insurer would have had if the sums had been paid by the insolvent insurer and except as provided in subsection (b).
(b) The fund shall have the right to recover from the following persons the amount of any "covered claim" paid on behalf of the person pursuant to this chapter:
(1) Any insured whose net worth on December 31 of the year next preceding the date the insurer became an insolvent insurer exceeded fifty million dollars ($50,000,000) and whose liability obligations to other persons are satisfied in whole or in part by payments made under this chapter {ADD ; provided, however, that there shall be no recovery of any prejudgment interest on any pending or future claims against such an insured, including claims presently in suit or on appeal ADD}; and
(2) Any person who is an affiliate of the insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under this chapter.
(c) The receiver, liquidator, or statutory successor of an insolvent insurer shall be bound by settlements of covered claims by the fund 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 fund or similar organization in handling claims shall be accorded the same priority as the liquidator's expenses.
(d) The fund shall periodically file with the receiver or liquidator of the insolvent insurer statements of the covered claims paid by the fund and estimates of anticipated claims on the fund which shall preserve the rights of the fund against the assets of the insolvent insurer.
SECTION 2. This act shall take effect upon passage.
