§3618. Effect of paid claims

Link to law: http://legislature.vermont.gov/statutes/section/08/101/03618
Published: 2015

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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.)
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