West Virginia Code 33-26-12 – Exhaustion of other coverage; deductible reimbursement
(a) Any person having a claim under an insurance policy, whether or not it is a policy issued by a member insurer, and the claim under such other policy arises from the same facts, injury, or loss that gave rise to the covered claim against the association, shall first exhaust all coverage provided by any such policy. Any amount payable on a covered claim under this article shall be reduced by the full applicable limits stated in such other insurance policy and the association shall receive a full credit for such stated limits or, where there are no applicable stated limits, the claim shall be reduced by the total recovery. Notwithstanding the foregoing, no person may be required to exhaust any right under the policy of an insolvent insurer.
Terms Used In West Virginia Code 33-26-12
- Association: means the West Virginia Insurance Guaranty Association created under section six of this article. 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
- 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.
- 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
- Lien: A claim against real or personal property in satisfaction of a debt.
- Member insurer: means any person who: writes any kind of insurance to which this article applies under section three of this article, including farmers&rsquo. See West Virginia Code 33-26-5
- 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.
- Person: means any individual or legal entity, including governmental entities. See West Virginia Code 33-26-5
- Self-insurer: means a person that covers its liability through a qualified individual or group self-insurance program or any other formal program created for the specific purpose of covering liabilities typically covered by insurance. See West Virginia Code 33-26-5
(1) A claim under a policy providing liability coverage to a person who may be jointly and severally liable with or a joint tortfeasor with the person covered under the policy of the insolvent insurer that gives rise to the covered claim is considered to be a claim arising from the same facts, injury or loss that gave rise to the covered claim against the association.
(2) A claim under an insurance policy shall also include, for purposes of this section:
(A) A claim against a health maintenance organization, a hospital plan corporation or a professional health service corporation; and
(B) Any amount payable by or on behalf of a self-insurer.
(3) To the extent that the association’s obligation is reduced by the application of this section, the liability of the person insured by the insolvent insurer’s policy for the claim shall be reduced in the same amount.
(b) Any person having a claim which may be recovered under more than one Insurance Guaranty Association or its equivalent shall seek recovery first from the association of the place of residence of the insured except that if it is a first party claim for damage to property with a permanent location, he or she shall seek recovery first from the association of the location of the property, and if it is a workers’ compensation claim, the person shall seek recovery first from the association of the residence of the claimant. Any recovery under this article shall be reduced by the amount of the recovery from any other insurance guaranty association or its equivalent.
(c) To the extent the association pays any deductible claim for which the insurer would have been entitled to reimbursement from the insured, the association is entitled to the full amount of the reimbursement and available collateral as provided under this subsection to the extent necessary to reimburse the association. Reimbursements paid to the association pursuant to this subsection may not be treated as distributions or as early access payments. To the extent that the association pays a deductible claim that is not reimbursed either from collateral or by insured payments, or incurred expenses in connection with large deductible policies that are not reimbursed under this subsection, the association has an exclusive cause of action against the insured, including the right to enforce against the insured the rights of the insurer with respect to any obligation of the insured to reimburse the insurer for deductibles or pay claims within a deductible. Further, the fund is vested with a first lien in any collateral provided by the insured to the insolvent insurer to secure the insured’s performance, to the extent of claims paid by the association, which lien can be perfected by notice to the liquidator. Nothing in this subsection limits any rights of the association that may otherwise exist under applicable law to obtain reimbursement from insureds for claims payments made by the association under policies of the insurer or for the association’s related expenses.