HF 2720

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to insurance; amending the Insurance Guaranty 
  1.3             Association Act to improve coverage for political 
  1.4             subdivisions of this state when their insurance 
  1.5             company becomes insolvent; amending Minnesota Statutes 
  1.6             2003 Supplement, section 60C.09, subdivision 2. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2003 Supplement, section 
  1.9   60C.09, subdivision 2, is amended to read: 
  1.10     Subd. 2.  [FURTHER DEFINITION.] In addition to subdivision 
  1.11  1, a covered claim does not include: 
  1.12     (1) claims by an affiliate of the insurer; 
  1.13     (2) claims due a reinsurer, insurer, insurance pool, or 
  1.14  underwriting association, as subrogation recoveries, reinsurance 
  1.15  recoveries, contribution, indemnification, or otherwise.  This 
  1.16  clause does not prevent a person from presenting the excluded 
  1.17  claim to the insolvent insurer or its liquidator, but the claims 
  1.18  shall not be asserted against another person, including the 
  1.19  person to whom the benefits were paid or the insured of the 
  1.20  insolvent insurer, except to the extent that the claim is 
  1.21  outside the coverage of the policy issued by the insolvent 
  1.22  insurer; and 
  1.23     (3) any claims, resulting from insolvencies which occur 
  1.24  after July 31, 1996, by an insured, other than a political 
  1.25  subdivision, whose net worth exceeds $25,000,000 on December 31 
  1.26  of the year prior to the year in which the insurer becomes an 
  2.1   insolvent insurer; provided that an insured's net worth on that 
  2.2   date shall be deemed to include the aggregate net worth of the 
  2.3   insured and all of its subsidiaries and affiliates as calculated 
  2.4   on a consolidated basis; 
  2.5      (4) any claims under a policy written by an insolvent 
  2.6   insurer with a deductible or self-insured retention of $300,000 
  2.7   or more, nor that portion of a claim that is within an insured's 
  2.8   deductible or self-insured retention; 
  2.9      (5) claims that are a fine, penalty, interest, or punitive 
  2.10  or exemplary damages. 
  2.11     Sec. 2.  [EFFECTIVE DATE.] 
  2.12     Section 1 is effective the day following final enactment 
  2.13  and applies retroactively to insolvencies that occur on or after 
  2.14  June 11, 2003, as evidenced by an order of liquidation entered 
  2.15  by a court of competent jurisdiction on or after that date.