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-28-203
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
Insured: means a person to whom or for whose benefit an insurer makes a promise in an insurance policy and includes:
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
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Residence: means , for entities other than a natural person, the state where the principal place of business of a claimant, insured, or policyholder is located at the time of the insured event. See Utah Code 31A-28-203
(a)
Any person who has a claim against an insurer, whether or not the insurer is a member insurer, under any provision in an insurancepolicy, other than a policy of an insolvent insurer that is also a covered claim, is required to first exhaust that person’s right under that person’s policy.
(b)
Any amount payable on a covered claim under this part under an insurance policy is reduced by the amount of any recovery under the insurance policy described in Subsection (1)(a).
(c)
(i)
Except as provided in Subsection (1)(c)(ii) a person having a claim that may be recovered under more than one insurance guaranty association or its equivalent shall first seek recovery from the association of the place of residence of the insured.
(ii)
If the person’s claim is:
(A)
a first-party claim for damage to property with a permanent location, the person shall seek recovery first from the association of the location of the property; and
(B)
a workers’ compensation claim, the person shall seek recovery first from the association of the residence of the claimant.
(iii)
Any recovery under this part shall be reduced by the amount of recovery from any other insurance guaranty association or its equivalent.
(2)
An insurer may not exercise any right of subrogation against an insolvent insurer‘s insured if exercise of the right would require the insured, or a guaranty fund under this chapter, to pay an amount the insolvent insurer is obligated to pay under an insurance policy issued to the insured, except that an insurer may exercise a right of subrogation for the amount the subrogation claim exceeds the guaranty association obligation limitations.
(3)
This part may not 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.
(4)
(a)
Records shall be kept of all negotiations and meetings in which the association or its representatives are involved to discuss the activities of the association in carrying out the association’s powers and duties under Section 31A-28-207. Records of these negotiations or meetings shall be made public only upon:
(i)
the termination of a liquidation, rehabilitation, or conservation proceeding involving the insolvent insurer;
(ii)
the termination of the insolvency of the insurer; or
(iii)
the order of a court of competent jurisdiction.
(b)
This Subsection (4) does not limit the duty of the association to render a report of its activities under Section 31A-28-214.
(5)
For the purpose of carrying out its obligations under this part, the association is considered to be a creditor of the insolvent insurer, except to the extent of any amounts the association is entitled as subrogee under Section 31A-28-207.
(6)
(a)
Before the termination of any liquidation, rehabilitation, or conservation proceeding, the court may take into consideration the contributions of the respective parties, including:
(i)
the association;
(ii)
the shareholders;
(iii)
the policyowners 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 the determination described in Subsection (6)(a), the court shall consider the welfare of the policyholders of the continuing or successor insurer.
(c)
A distribution to stockholders, if any, of an insolvent insurer may not be made until the total amount of valid claims of the association with interest on those claims for funds expended in carrying out its powers and duties under Section 31A-28-207 regarding this insurer have been fully recovered by the association.
(7)
A rehabilitator, liquidator, or conservator appointed under any section of this part may recover on behalf of the insurer for excessive distributions paid to affiliates, pursuant to Section 31A-27a-502.
