Nothing in this part shall be construed to reduce the liability for unpaid assessments of the insureds of an impaired or insolvent insurer operating under a plan with assessment liability.
Terms Used In Utah Code 31A-28-114
Application: means a document:
(a)
(i)
completed by an applicant to provide information about the risk to be insured; and
(ii)
that contains information that is used by the insurer to evaluate risk and decide whether to:
(A)
insure the risk under:
(I)
the coverage as originally offered; or
(II)
a modification of the coverage as originally offered; or
(B)
decline to insure the risk; or
(b)
used by the insurer to gather information from the applicant before issuance of an annuity contract. See Utah Code 31A-1-301
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Association: means the Utah Life and Health Insurance Guaranty Association continued under Section 31A-28-106. See Utah Code 31A-28-105
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
insolvent: means that:
(a)
an insurer is unable to pay the insurer's obligations as the obligations are due;
(b)
an insurer's total adjusted capital is less than the insurer's mandatory control level RBC under Subsection 31A-17-601(8)(c); or
(c)
an insurer's admitted assets are less than the insurer's liabilities. See Utah Code 31A-1-301
Insolvent insurer: means a member insurer that is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency. See Utah Code 31A-28-105
Insurance: includes :
(i)
a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;
(ii)
a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and
(iii)
a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301
Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
Member: means a person having membership rights in an insurance corporation. See Utah Code 31A-1-301
Member insurer: includes an insurer whose license or certificate of authority in this state may have been:
Receivership court: means the court in the insolvent or impaired insurer's state having jurisdiction over the conservation, rehabilitation, or liquidation of the member insurer. See Utah Code 31A-28-105
(2)
(a)
The board of directors shall keep a record of a meeting of the board of directors to discuss the activities of the association in carrying out its powers and duties under Section 31A-28-108.
(b)
A record of the association with respect to an impaired or insolvent insurer may not be disclosed before the earlier of:
(i)
the termination of a liquidation, rehabilitation, or conservation proceeding involving the impaired or insolvent insurer;
(ii)
the termination of the impairment or insolvency of the insurer; or
(iii)
upon the order of a court of competent jurisdiction.
(c)
Nothing in this Subsection (2) limits the duty of the association to render a report of its activities under Section 31A-28-115.
(3)
(a)
For the purpose of carrying out its obligations under this part, the association is considered to be a creditor of an impaired or insolvent insurer to the extent of assets attributable to covered policies or contracts reduced by any amounts to which the association is entitled as subrogee pursuant to Subsection 31A-28-108(14).
(b)
Assets of the impaired or insolvent insurer attributable to covered policies or contracts shall be used to continue the covered policies and pay the contractual obligations of the impaired or insolvent insurer as required by this part.
(c)
As used in this Subsection (3), assets attributable to covered policies or contracts are that proportion of the assets which the reserves that should have been established for covered policies or contracts bear to the reserves that should have been established for all policies of insurance written by the impaired or insolvent insurer.
(4)
(a)
As a creditor of the impaired or insolvent insurer under Subsection (3) and consistent with Section 31A-27a-701, the association and any other similar association are entitled to receive a disbursement of assets out of the marshaled assets, from time to time as the assets become available to reimburse the association and any other similar association.
(b)
If, within 180 days of a final determination of insolvency of a member insurer by the receivership court, the receiver has not made an application to the court for the approval of a proposal to disburse assets out of marshaled assets to the guaranty associations having obligations because of the insolvency, the association is entitled to make application to the receivership court for approval of the association’s proposal for disbursement of these assets.
(5)
(a)
Before the termination of a liquidation, rehabilitation, or conservation proceeding, when making an equitable distribution of the ownership rights of the insolvent insurer, the court may take into consideration the contributions of the respective parties, including:
(i)
the association;
(ii)
the shareholders;
(iii)
policy owners, contract owners, certificate holders, and enrollees of the insolvent insurer; and
(iv)
any other party with a bona fide interest in making an equitable distribution of the ownership rights of the insolvent insurer.
(b)
In making a determination under Subsection (5)(a), the court shall consider the welfare of the policy owners, contract owners, certificate holders, and enrollees of the continuing or successor member insurer.
(c)
A distribution to any stockholder of an impaired or insolvent insurer may not be made until and unless the total amount of valid claims of the association with interest has been fully recovered by the association for funds expended in carrying out its powers and duties under Section 31A-28-108 with respect to the member insurer.
