1997 Minnesota Statutes

     60C.09 Covered claims. 

    Subdivision 1.    Definition.  A covered claim is any 
 unpaid claim, including one for unearned premium, which: 

    (a)(1) Arises out of and is within the coverage of an 
 insurance policy issued by a member insurer if the insurer 
 becomes an insolvent insurer after April 30, 1979; or 

    (2) Would be within the coverage of an extended reporting 
 endorsement to a claims-made insurance policy if insolvency had 
 not prevented the member insurer from fulfilling its obligation 
 to issue the endorsement, if: 

    (i) the claims-made policy contained a provision affording 
 the insured the right to purchase a reporting endorsement; 

    (ii) coverage will be no greater than if a reporting 
 endorsement had been issued; 

    (iii) the insured has not purchased other insurance which 
 applies to the claim; and 

    (iv) the insured's deductible under the policy is increased 
 by an amount equal to the premium for the reporting endorsement, 
 as provided in the insured's claims-made policy, or if not so 
 provided, then as established by a rate service organization. 

    (b) Arises out of a class of business which is not excepted 
 from the scope of this chapter by section 60C.02; and 

    (c) Is made by: 

    (i) A policyholder, or an insured beneficiary under a 
 policy, who, at the time of the insured event, was a resident of 
 this state; or 

    (ii) A person designated in the policy as having an 
 insurable interest in or related to property situated in this 
 state at the time of the insured event; or 

    (iii) An obligee or creditor under any surety bond, who, at 
 the time of default by the principal debtor or obligor, was a 
 resident of this state; or 

    (iv) A third party claimant under a liability policy or 
 surety bond, if:  (a) the insured or the third party claimant 
 was a resident of this state at the time of the insured event; 
 (b) the claim is for bodily or personal injuries suffered in 
 this state by a person who when injured was a resident of this 
 state; or (c) the claim is for damages to real property situated 
 in this state at the time of damage; or 

    (v) A direct or indirect assignee of a person who except 
 for the assignment might have claimed under item (i), (ii), or 
 (iii). 

    For purposes of paragraph (c), item (ii), unit owners of 
 condominiums, townhouses, or cooperatives are considered as 
 having an insurable interest.  

    A covered claim also includes any unpaid claim which arises 
 or exists within 30 days after the time of entry of a final 
 order of liquidation with a finding of insolvency by a court of 
 competent jurisdiction unless prior thereto the insured replaces 
 the policy or causes its cancellation or the policy expires on 
 its expiration date.  A covered claim does not include claims 
 filed with the guaranty fund after the final date set by the 
 court for the filing of claims except for workers' compensation 
 claims that have met the time limitations and other requirements 
 of chapter 176 and excused late filings permitted under section 
 60B.37. 

    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 first-party claims, resulting from insolvencies 
 which occur after July 31, 1996, by an insured 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 as calculated on a consolidated basis. 

    Subd. 3.    Limitation of amount.  Payment of a covered 
 claim, whether upon a single policy or multiple policies of 
 insurance, is limited to no more than $300,000.  In the case of 
 claim for unearned premium by a single claimant, the entire 
 claim up to $300,000 shall be allowed.  The limitation on the 
 amount of payment for a covered claim does not apply to claims 
 for workers' compensation insurance.  In no event is the 
 association obligated to the policyholder or claimant in an 
 amount in excess of the obligation of the insurer under the 
 policy from which the claim arises.  For insolvencies occurring 
 on or after October 1, 1985, no deductible applies to claims 
 eligible for payment under the assigned claims plan under 
 sections 65B.63 to 65B.65. 

    HIST: 1971 c 145 s 9; 1976 c 185 s 6; 1981 c 260 s 2; 1981 c 
 346 s 36; 1982 c 555 s 2; 1982 c 589 s 2; 1983 c 203 s 1; 1986 c 
 444; 1987 c 337 s 32; 1988 c 541 s 8; 1991 c 325 art 6 s 7; 1996 
 c 446 art 2 s 7; 1997 c 52 s 7