(a) For the purpose of providing funds necessary to carry out the powers and duties of the association, the Board of Governors shall by resolution assess the member insurers, separately for each account, at a time and for an amount that the board finds necessary. Assessments are authorized when a resolution is passed and are due not less than 30 days after prior written notice to the member insurers and accrue interest at 10 percent a year from the date payment is due. Authorized assessments become called when notice is mailed by the association to member insurers.
Terms Used In Alaska Statutes 21.79.070
action: includes any matter or proceeding in a court, civil or criminal. See Alaska Statutes 01.10.060
Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
state: means the State of Alaska unless applied to the different parts of the United States and in the latter case it includes the District of Columbia and the territories. See Alaska Statutes 01.10.060
(b) There shall be two assessments as follows:
(1) class A assessments shall be authorized and called for the purpose of meeting administrative and legal costs and other expenses and examinations conducted under the authority of Alaska Stat. § 21.79.060; class A assessments may be authorized and called whether or not related to a particular impaired or insolvent insurer;(2) class B assessments shall be authorized and called only as necessary to carry out the powers and duties of the association with regard to an impaired or an insolvent insurer.(c) The amount of a class A assessment shall be determined by the board and may be made on a pro rata or non pro rata basis. If a pro rata assessment is made, the board may provide that it be credited against future class B assessments. The amount of a class B assessment, except for assessments related to long-term care insurance, shall be allocated for assessment purposes between the accounts and among the subaccounts of the life insurance and annuity account under an allocation formula that may be based on the premiums or reserves of the impaired or insolvent insurer or by another standard determined by the board in its sole discretion as being fair and reasonable under the circumstances. The amount of the class B assessment for long-term care insurance written by the impaired or insolvent insurer shall be allocated according to a methodology included in the association’s plan of operation approved by the director. The methodology must provide for 50 percent of the assessment to be allocated to accident and health member insurers and 50 percent to be allocated to life and annuity member insurers.(d) Class B assessments shall be based on the premiums received on business in this state by each assessed member insurer on policies or contracts covered by each account in proportion to the premiums received on business in this state by all assessed member insurers during the three calendar years preceding the year in which the insolvency or impairment occurred.(e) The association may abate or defer, in whole or in part, the assessment of a member insurer if, in the opinion of the board, a payment of the assessment would endanger the ability of the member insurer to fulfill its contractual obligations. The amount by which an assessment against a member insurer is abated or deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in (c) of this section. Once the conditions that caused a deferral are removed or rectified, the member insurer shall pay all assessments that were deferred under a repayment plan approved by the association.(f) Except as provided in this subsection, the total of all assessments on a member insurer for each subaccount of the life and annuity account and for the health account may not in any one calendar year exceed two percent of the member insurer’s average annual premiums received in this state on policies or contracts covered by the account or subaccount during the three calendar years preceding the year in which the member insurer became an impaired or insolvent insurer. If two or more assessments are authorized in one calendar year with respect to member insurers that become impaired or insolvent in different calendar years, the average annual premiums for purposes of the aggregate assessment percentage limitation imposed under this subsection shall be limited to the highest of the average annual premiums during the preceding three calendar years for the applicable subaccount or account as calculated under this section. If the maximum assessment, together with the other assets of the association in an account, does not provide in any one year in either account an amount sufficient to carry out the responsibilities of the association, the necessary additional funds shall be assessed as soon as permitted by this chapter.(g) The board may provide in the plan of operation a method of allocating funds among claims, whether relating to one or more impaired or insolvent insurers, when the maximum assessment will be insufficient to cover anticipated claims.(h) If the maximum assessment for a subaccount of the life and annuity account in any one year does not provide an amount sufficient to carry out the responsibilities of the association, the board shall, as provided under (d) of this section, access all subaccounts of the life and annuity account for the necessary additional amount, subject to the assessment limit provided in (f) of this section.(i) Assessments for funds to meet the requirements of the association with respect to an impaired or insolvent insurer may not be authorized or called until necessary to implement the purposes of this chapter. Classification of assessments under (b) of this section and computation of assessments under this section shall be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible. The association shall notify each member insurer of its anticipated pro rata share of an authorized assessment not yet called within 180 days after the assessment is authorized.(j) The board may, by an equitable method as established in the plan of operation, refund to member insurers, in proportion to the contribution of each member insurer to that account, the amount by which the assets of the account exceed the amount the board finds is necessary to carry out during the coming year the obligations of the association with regard to that account, including assets accruing from assignment, subrogation, net realized gains, and income from investments. A reasonable amount may be retained in any account to provide funds for the continuing expenses of the association and for future losses claims.(k) A member insurer may, in determining its premium rates and policy owner dividends as to any kind of insurance, hospital or medical service corporation business, or health maintenance organization business within the scope of this chapter, consider the amount reasonably necessary to meet its assessment obligations under this chapter.(l) A member insurer that wishes to protest all or part of an assessment shall pay when due the full amount of the assessment as set out in the notice provided by the association. The payment shall be available to meet association obligations during the pendency of the protest or any subsequent appeal. If a payment is made under protest, payment must be accompanied by a statement in writing that the payment is made under protest and setting out a brief statement of the grounds for the protest. Within 60 days following the payment of an assessment under protest by a member insurer, the association shall notify the member insurer in writing of its determination with respect to the protest unless the association notifies the member insurer that additional time is required to resolve the issues raised by the protest. Within 30 days after a final decision has been made, the association shall notify the protesting member insurer in writing of that final decision. Within 60 days after receipt of notice of the final decision, the protesting member insurer may appeal that final action to the director. In the alternative to rendering a final decision with respect to a protest based on a question regarding the assessment base, the association may refer protests to the director for a final decision with or without recommendation from the association. If a protest or appeal on an assessment is upheld, the amount paid in error or excess shall be returned to the member insurer. Interest on a refund due a protesting member insurer shall be paid at the rate actually earned by the association.
