§ 10-4-511 — Effect of paid claims

Colorado § 10-4-511

• Jurisdiction: Colorado
• Title 10: Insurance
• Art.: Property and Casualty Insurance

Text

(1) Any person recovering under this part 5
from the association shall be deemed to have assigned his rights under the policy to
the association to the extent of his recovery from the association. Every insured or
claimant seeking the protection of this part 5 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.

(2) 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 part 5 against the assets of the insolvent insurer. The expenses of the
association or a similar organization in handling claims shall be accorded the same
priority as the liquidator's expenses.

(3) The association shall periodically file with the receiver or liquidator of an
insolvent insurer statements of the covered claims paid by the association and
estimates of anticipated claims on the association, which shall preserve the rights
of the association against the assets of the insolvent insurer.

(4) (a) The association shall have the right to recover from the following
persons the amount of any covered claim paid on behalf of such person pursuant to
this part 5:

(I) Any insured whose net worth on December 31 of the year immediately
preceding the date the insurer becomes an insolvent insurer exceeds twenty-five
million dollars and whose liability obligations to other persons are satisfied in whole
or in part by payments made under this part 5. An insured's net worth on such date
shall be deemed to include the aggregate net worth of the insured and all of its
subsidiaries as calculated on a consolidated basis; and

(II) Any person who is an affiliate of the insolvent insurer and whose liability
obligations to other persons are satisfied in whole or in part by payments made
under this part 5.

(b) The association and any similar organization in another state shall be
recognized as claimants in the liquidation of an insolvent insurer for any amounts
paid by them on covered claims obligations as determined under this part 5 or
similar laws in other states and shall receive dividends and any other distributions
at the priority set forth in part 5 of article 3 of this title. The receiver, liquidator, or
statutory successor of an insolvent insurer shall be bound by determinations of
covered claim eligibility under this part 5 and by settlements of claims made 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 part 5 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.

Legislative History

Source: L. 71: p. 761, � 1. C.R.S. 1963: � 72-34-11. L. 77: (2) amended, p. 514, � 4, effective May 27. L. 99: (4) added, p. 87, � 5, effective August 4.