§ 24-A §4608 — Powers and duties of the association

In addition to the powers and duties enumerated in other sections of this chapter:
1.
Impaired insurer; association action.
If a member insurer is an impaired insurer, the association may, subject to any fair and equitable conditions imposed by the association that do not impair the contractual obligations of the impaired insurer and that are approved by the superintendent:
2.
Foreign or alien impaired insurer; association action prior to final order of liquidation, rehabilitation or conservation.
3.
Domestic impaired insurer under final order of liquidation or rehabilitation; association action.
3-A.
Impaired and insolvent insurer; association action.
If a member insurer is an insolvent insurer, the association may, in its discretion, either:
4.
Foreign or alien impaired insurer under final order of liquidation, rehabilitation or conservation; association action.
5.
Policy liens; contract liens; moratoriums on payments.
5-A.
Policy liens; contract liens; moratoriums on payments.
In carrying out its duties under subsection 3‑A, the association may:
6.
Association liability.
The association has no liability under this section for any covered policy of a foreign or alien insurer whose domiciliary jurisdiction or state of entry provides by statute for residents of this State protection substantially similar to that provided by this chapter for residents of other states.
6-A.
Failure to act.
If the association fails to act within a reasonable period of time with respect to an insolvent insurer, as provided in subsection 3‑A, the superintendent has the powers and duties of the association under this chapter with respect to the insolvent insurer.
6-B.
Retention of deposit; final order of liquidation or rehabilitation plan.
A deposit in this State, held pursuant to law or required by the superintendent for the benefit of creditors, including policy owners, not turned over to the domiciliary liquidator upon the entry of a final order of liquidation or order approving a rehabilitation plan of a member insurer domiciled in this State or in a reciprocal state, pursuant to this Title must be promptly paid to the association. The association is entitled to retain a portion of any amount so paid to it equal to the percentage determined by dividing the aggregate amount of policy owners' claims related to that insolvency for which the association has provided statutory benefits by the aggregate amount of all policy owners' claims in this State related to that insolvency and shall remit to the domiciliary receiver the amount so paid to the association and not retained pursuant to this subsection. Any amount so paid to the association less the amount not retained by it must be treated as a distribution of estate assets pursuant to chapter 57 or similar provision of the state of domicile of the impaired or insolvent insurer.
7.
Assistance and advice to superintendent.
The association may render assistance and advice to the superintendent, upon the superintendent's request, concerning rehabilitation, payment of claims, continuations of coverage or the performance of other contractual obligations of any impaired or insolvent insurer.
8.
Standing to appear before court.
The association has standing to appear or intervene before any court or agency in this State with jurisdiction over an impaired or insolvent insurer concerning which the association is or may become obligated under this chapter or with jurisdiction over any person or property against whom the association may have rights through subrogation or otherwise. This standing extends to all matters germane to the powers and duties of the association, including, but not limited to, proposals for reinsuring, reissuing, modifying or guaranteeing the covered policies or contracts and contractual obligations of the impaired or insolvent insurer and the determination of the covered policies or contracts and contractual obligations. The association also has the right to appear or intervene before a court or agency in another state with jurisdiction over an impaired or insolvent insurer for which the association is or may become obligated or with jurisdiction over any person or property against whom the association may have rights through subrogation or otherwise.
9.
Subrogation rights.
Any person receiving benefits under this chapter is deemed to have assigned that person's rights under, and any causes of action against any person for losses arising under, resulting from or otherwise relating to, the covered policy or contract to the association to the extent of the benefits received because of this chapter whether the benefits are payments of or on account of contractual obligations, continuation of coverage or provision of substitute or alternative coverages. The association may require an assignment to it of these rights and cause of action by any payee, policy or contract owner, beneficiary, insured, enrollee or annuitant as a condition precedent to the receipt of any rights or benefits conferred by this chapter upon that person. The association is subrogated to these rights against the assets of any impaired or insolvent insurer.
10.
Association's contractual obligation; impaired insurer.
11.
Other powers.
The association may:
12.
Reinsurance of obligations; election by association.
At any time within one year after the date on which the association becomes responsible for the obligations of a member insurer, the association may elect to succeed to the rights and obligations of the member insurer that accrue on or after the coverage date and that relate to contracts covered in whole or in part by the association under any one or more indemnity reinsurance agreements entered into by the member insurer as a ceding insurer and selected by the association. However, the association may not exercise an election with respect to a reinsurance agreement if the receiver, rehabilitator or liquidator of the member insurer has previously and expressly disaffirmed the reinsurance agreement. The election is effected by a notice to the receiver, rehabilitator or liquidator and to the affected reinsurers. If the association makes an election, the following requirements apply with respect to the agreements selected by the association.
13.
Discretion.
The board of directors of the association has discretion and may exercise reasonable business judgment to determine the means by which the association is to provide the benefits of this chapter in an economical and efficient manner.
14.
No additional benefits.
When the association has arranged or offered to provide the benefits of this chapter to a covered person under a plan or arrangement that fulfills the association's obligations under this chapter, the person is not entitled to benefits from the association in addition to or other than those provided under the plan or arrangement.
15.
Venue.
Venue in a suit against the association arising under this chapter is Kennebec County. The association may not be required to give an appeal bond in an appeal that relates to a cause of action arising under this chapter.
16.
Issuance of substitute coverage.
In carrying out its duties in connection with guaranteeing, assuming, reissuing or reinsuring policies or contracts under this section, the association may issue substitute coverage for a policy or contract that provides an interest rate, crediting rate or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value by issuing an alternative policy or contract in accordance with this subsection.

Legislative History

PL 1983, c. 846 (NEW). PL 2005, c. 346, §6 (AMD). PL 2005, c. 346, §16 (AFF). PL 2017, c. 382, §§16-24 (AMD).