HF 24

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to insurance; improving Insurance Guaranty
Association coverage for political subdivisions of
this state when their insurance company becomes
insolvent; amending Minnesota Statutes 2004, section
60C.09, subdivision 2.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 60C.09,
subdivision 2, is amended to read:

Subd. 2.

Further definition.

In addition to subdivision
1, a covered claim does not include:

(1) claims by an affiliate of the insurer;

(2) claims due a reinsurer, insurer, insurance pool, or
underwriting association, as subrogation recoveries, reinsurance
recoveries, contribution, indemnification, or otherwise. This
clause does not prevent a person from presenting the excluded
claim to the insolvent insurer or its liquidator, but the claims
shall not be asserted against another person, including the
person to whom the benefits were paid or the insured of the
insolvent insurer, except to the extent that the claim is
outside the coverage of the policy issued by the insolvent
insurer; and

(3) any claims, resulting from insolvencies which occur
after July 31, 1996, by an insured new text begin , other than a political
subdivision, new text end whose net worth exceeds $25,000,000 on December 31
of the year prior to the year in which the insurer becomes an
insolvent insurer; provided that an insured's net worth on that
date shall be deemed to include the aggregate net worth of the
insured and all of its subsidiaries and affiliates as calculated
on a consolidated basis;

(4) any claims under a policy written by an insolvent
insurer with a deductible or self-insured retention of $300,000
or more, nor that portion of a claim that is within an insured's
deductible or self-insured retention;

(5) claims that are a fine, penalty, interest, or punitive
or exemplary damages.

Sec. 2. new text begin EFFECTIVE DATE.
new text end

new text begin Section 1 is effective the day following final enactment
and applies retroactively to insolvencies that occur on or after
June 11, 2003, as evidenced by an order of liquidation entered
by a court of competent jurisdiction on or after that date.
new text end