38.2-1609 - Insured's rights and liabilities; settlements binding on receiver or liquidator; priority of claims; statements to be filed with receiver or liquidator.
§ 38.2-1609. Insured's rights and liabilities; settlements binding onreceiver or liquidator; priority of claims; statements to be filed withreceiver or liquidator.
A. 1. Any person recovering under this chapter shall be deemed to haveassigned his rights under the policy to the Association to the extent of hisrecovery from the Association. Each insured or claimant seeking theprotection of this chapter shall cooperate with the Association to the sameextent as the person would have been required to cooperate with the insolventinsurer. The Association shall have no cause of action against the insured ofthe insolvent insurer for any sums it has paid out except the causes ofaction the insolvent insurer would have had if those sums had been paid bythe insolvent insurer and except as provided in subdivision 2 of thissubsection. In the case of an insolvent insurer operating on an assessmentplan, payments of claims by the Association shall not reduce the liability ofinsureds to the receiver, liquidator, or statutory successor for unpaidassessments previously made. However, the receiver, liquidator, or statutorysuccessor shall under no circumstances levy an additional assessment againstthe insured, regardless of the terms of the policy.
2. The Association shall have the right to recover from the following personsthe amount of any "covered claim" paid on behalf of such persons pursuantto this chapter:
a. Any insured whose net worth on December 31 of the year next preceding thedate the insurer becomes an insolvent insurer exceeds fifty million dollarsand whose liability obligations to other persons are satisfied in whole or inpart by payments made under this chapter; and
b. Any person who is an affiliate of the insolvent insurer and whoseliability obligations to other persons are satisfied in whole or in part bypayments made under this chapter.
B. The receiver, liquidator, or statutory successor of an insolvent insurershall be bound by settlements of covered claims by the Association or asimilar organization in another state. The court having jurisdiction shallgrant those claims priority equal to that which the claimant would have beenentitled in the absence of this chapter against the assets of the insolventinsurer. The expenses of the Association or a similar organization incurredin handling claims shall be accorded the same priority as the liquidator'sexpenses.
C. The Association shall preserve its rights to the insolvent insurer byperiodically filing with the receiver or liquidator statements of the coveredclaims paid by the Association and estimates of anticipated claims on theAssociation.
(1970, c. 766, § 38.1-766; 1986, c. 562; 1987, c. 529.)