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The Vermont Statutes Online
Title
08
:
Banking and Insurance
Chapter
101
:
INSURANCE COMPANIES GENERALLY
Subchapter
009
:
PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION
§
3618. Effect of paid claims
(a) Any person
recovering under this subchapter shall be deemed to have assigned his or her
rights under the policy to the association to the extent of his or her recovery
from the association. Every insured or claimant seeking the protection of this
subchapter shall cooperate with the association to the same extent as such
person would have been required to cooperate with the insolvent insurer. The
association shall have 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 such sums had been paid by the insolvent
insurer. In the case of an insolvent insurer operating on a plan with
assessment liability, payments of claims of the association shall not operate
to reduce the liability of insured's to the receiver, liquidator, or statutory
successor for unpaid assessments.
(b) The
receiver, liquidator, or statutory successor of an insolvent insurer shall be
bound by settlements of covered claims by the association or a similar
organization in another state. The court having jurisdiction shall grant such
claims priority equal to that which the claimant would have been entitled in
the absence of this subchapter 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 liquidator's expenses.
(c) The
association shall periodically file with the receiver or liquidator of the
insolvent insurer statements of the covered claims paid by the association, the
expenses paid in the handling of paid or contested covered claims, estimates of
anticipated claims on the association, and estimates of the expenses of
handling those anticipated claims, which shall preserve the rights of the
association against the assets of the insolvent insurer. (1969, No. 279 (Adj.
Sess.), § 10; amended 1979, No. 18, § 15.)