West Virginia Code 33-26-11 – Effect of paid claims
(a) Any person recovering under this article is considered to have assigned the person’s rights under the policy to the association to the extent of the person’s recovery from the association. Every insured or claimant seeking the protection of this article shall cooperate with the association to the same extent as that person would have been required to cooperate with the insolvent insurer. The association has no cause of action against the insured of the insolvent insurer for any sums it has paid out except such causes of action as the insolvent insurer would have had if the sums had been paid by the insolvent insurer and except as provided in subsection (b) of this section. In the case of an insolvent insurer operating on a plan whereby insurance policies with assessment liability have been issued to insureds, payments of claims by the association may not operate to reduce the liability of the insureds to the receiver, liquidator or statutory successor for unpaid assessments.
Terms Used In West Virginia Code 33-26-11
- Affiliate: means a person who directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with another person on December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer. See West Virginia Code 33-26-5
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Association: means the West Virginia Insurance Guaranty Association created under section six of this article. See West Virginia Code 33-26-5
- Association similar to the association: means any guaranty association, security fund or other insolvency mechanism that affords protection similar to that of the association. See West Virginia Code 33-26-5
- Claimant: means any insured making a first party claim or any person instituting a liability claim, provided that no person who is an affiliate of the insolvent insurer may be a claimant. See West Virginia Code 33-26-5
- Covered claim: means an unpaid claim, including one for unearned premiums, submitted by a claimant, which arises out of and is within the coverage and is subject to the applicable limits of an insurance policy to which this article applies issued by an insurer, if the insurer becomes an insolvent insurer after the effective date of this article and:
(i) The claimant or insured is a resident of this state at the time of the insured event: Provided, That for entities other than an individual, the residence of a claimant, insured or policyholder is the state in which its principal place of business is located at the time of the insured event. See West Virginia Code 33-26-5
- Insolvent insurer: means an insurer licensed to transact insurance in this state, either at the time the policy was issued or when the insured event occurred, and against whom a final order of liquidation has been entered with a finding of insolvency by a court of competent jurisdiction in the insurer&rsquo. See West Virginia Code 33-26-5
- 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.
- Person: means any individual or legal entity, including governmental entities. See West Virginia Code 33-26-5
- Receiver: means receiver, liquidator, rehabilitator or conservator as the context may require. See West Virginia Code 33-26-5
- State: when applied to a part of the United States and not restricted by the context, includes the District of Columbia and the several territories, and the words "United States" also include the said district and territories. See West Virginia Code 2-2-10
(b) The association may recover from the following persons all amounts paid by the association on behalf of the person, whether for indemnity or defense or otherwise:
(1) Any insured whose net worth on December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer exceeds $25 million: Provided, That an insured’s net worth on such date shall be considered to include the aggregate net worth of the insured and all of its subsidiaries and affiliates as calculated on a consolidated basis: Provided, however, That this provision may not apply to any claim for benefits under a workers’ compensation insurance policy required by chapter twenty-three of this code; and
(2) Any person who is an affiliate of the insolvent insurer.
(c) The association and any association similar to the association in another state shall be recognized as claimants in the liquidation of an insolvent insurer for any amounts paid by them on covered claims obligations as determined under this article or similar laws in other states and shall receive dividends and any other distributions at the priority set forth in section nineteen-a, article ten of this chapter. The receiver, liquidator or statutory successor of an insolvent insurer shall be bound by determinations of covered claim eligibility under this article and by settlements of claims made by the association or a similar organization in another state. The court having jurisdiction shall grant such claims priority equal to that to which the claimant would have been entitled, in the absence of this article, against the assets of the insolvent insurer. The expenses of the association or similar organization in handling claims shall be accorded the same priority as the receiver’s expenses.
(d) The association shall periodically file with the receiver or the liquidator of the insolvent insurer statements of the covered claims paid by the association and estimates of anticipated claims against the association which shall preserve the rights of the association against the assets of the insolvent insurer.