1.For the purpose of providing the funds necessary to carry out the powers and duties of
the association, the board of directors shall assess the member insurers, separately
for each account, at such time and for such amounts as the board finds necessary.
Assessments must be due not less than thirty days after prior written notice to the
member insurers and must accrue interest at eighteen percent per annum on and after
the due date.
2.There must be two classes of assessment, as follows:
a.Class A assessments must be authorized and called for the purpose of meeting
administrative and legal costs and other expenses. Class A assessments may be
authorized and called whether or not related to a particular impaired or insolvent
insurer.
b.Class B assessments must be authorized and called to
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1. For the purpose of providing the funds necessary to carry out the powers and duties of
the association, the board of directors shall assess the member insurers, separately
for each account, at such time and for such amounts as the board finds necessary.
Assessments must be due not less than thirty days after prior written notice to the
member insurers and must accrue interest at eighteen percent per annum on and after
the due date.
2. There must be two classes of assessment, as follows:
a. Class A assessments must be authorized and called for the purpose of meeting
administrative and legal costs and other expenses. Class A assessments may be
authorized and called whether or not related to a particular impaired or insolvent
insurer.
b. Class B assessments must be authorized and called to the extent necessary to
carry out the powers and duties of the association under section 26.1-38.1-05
with regard to an impaired or insolvent insurer.
3. The amount of any class A assessment must be determined at the discretion of the
board of directors and must be authorized and called on a non-pro rata basis.
4. The amount of any class B assessment, except for assessments related to long-term
care insurance, must be allocated for assessment purposes between the accounts and
among the subaccounts of the life insurance and annuity account, pursuant to an
allocation formula which may be based on the premiums or reserves of the impaired or
insolvent insurer or any other standard deemed by the board in its sole discretion as
being fair and reasonable under the circumstances.
5. The amount of the class B assessment for long-term care insurance written by the
impaired or insolvent insurer must be allocated according to a methodology included in
the plan of operation and approved by the commissioner. The methodology must
provide for fifty percent of the assessment to be allocated to accident and health
member insurers and fifty percent to be allocated to life and annuity member insurers.
6. Class B assessments against member insurers for each account and subaccount must
be in the proportion that the premiums received on business in this state by each
assessed member insurer on policies or contracts covered by each account for the
three most recent calendar years for which information is available preceding the year
in which the member insurer became insolvent or, in the case of an assessment with
respect to an impaired insurer, the three most recent calendar years for which
information is available preceding the year in which the member insurer became
impaired, bears to such premiums received on business in this state for such calendar
years by all assessed member insurers.
7. Assessments for funds to meet the requirements of the association with respect to an
impaired or insolvent insurer may not be authorized or called until necessary to
implement the purposes of this chapter. Classification of assessments under
subsection 2 and computation of assessments under this section must be made with a
reasonable degree of accuracy, recognizing that exact determinations may not always
be possible. The association shall notify each member insurer of its anticipated
pro rata share of an authorized assessment not yet called within one hundred eighty
days after the assessment is authorized.
8. The association may abate or defer, in whole or in part, the assessment of a member
insurer if, in the opinion of the board, payment of the assessment would endanger the
ability of the member insurer to fulfill its contractual obligations. In the event an
assessment against a member insurer is abated, or deferred in whole or in part, the
amount by which such assessment is abated or deferred may be assessed against the
other member insurers in a manner consistent with the basis for assessments set forth
in this section. Once the conditions that caused a deferral are removed or rectified, the
member insurer shall pay all assessments that were deferred pursuant to a repayment
plan approved by the association.
9. a. Subject to subdivision b, the total of all assessments authorized by the
association with respect to a member insurer for each subaccount of the life
insurance and annuity account and for the health account may not in any one
calendar year exceed two percent of that member insurer's average annual
premiums received in this state on the policies and contracts covered by the
subaccount or account during the three calendar years preceding the year in
which the member insurer became an impaired or insolvent insurer.
b. If two or more assessments are authorized in one calendar year with respect to
member insurers that become impaired or insolvent in different calendar years,
the average annual premiums for purposes of the aggregate assessment
percentage limitation referenced in subdivision a must be equal and limited to the
higher of the three-year average annual premiums for the applicable subaccount
or account as calculated pursuant to this section.
c. If the maximum assessment, together with the other assets of the association in
an account, does not provide in one year in either account an amount sufficient to
carry out the responsibilities of the association, the necessary additional funds
must be assessed as soon after as permitted under this chapter.
10. The board may provide in the plan of operation a method of allocating funds among
claims, whether relating to one or more impaired or insolvent insurers, when the
maximum assessment will be insufficient to cover anticipated claims.
11. If the maximum assessment for any subaccount of the life and annuity account in any
one year does not provide an amount sufficient to carry out the responsibilities of the
association, then pursuant to subsection 4, the board shall assess the other
subaccounts of the life and annuity account for the necessary additional amount,
subject to the maximum stated in subsection 9.
12. The board may, by an equitable method as established in the plan of operation, refund
to member insurers, in proportion to the contribution of each member insurer to that
account, the amount by which the assets of the account exceed the amount the board
finds is necessary to carry out during the coming year the obligations of the
association with regard to that account, including assets accruing from assignment,
subrogation, net realized gains, and income from investments. A reasonable amount
may be retained in any account to provide funds for the continuing expenses of the
association and for future claims.
13. It is proper for any member insurer, in determining its premium rates and policy owner
dividends as to any kind of insurance or health maintenance organization business
within the scope of this chapter, to consider the amount reasonably necessary to meet
its assessment obligations under this chapter.
14. The association shall issue to each member insurer paying an assessment under this
chapter, other than a class A assessment, a certificate of contribution, in a form
prescribed by the commissioner, for the amount of the assessment so paid. All
outstanding certificates must be of equal dignity and priority without reference to
amounts or dates of issue. A certificate of contribution may be shown by the member
insurer in its financial statement as an asset in such form and for such amount, if any,
and period of time as the commissioner may approve.
15. a. A member insurer that wishes to protest all or part of an assessment shall pay
when due the full amount of the assessment as set forth in the notice provided by
the association. The payment must be available to meet association obligations
during the pendency of the protest or any subsequent appeal. Payment must be
accompanied by a statement in writing that the payment is made under protest
and must set forth a brief statement of the grounds for the protest.
b. Within sixty days following the payment of an assessment under protest by a
member insurer, the association shall notify the member insurer in writing of its
determination with respect to the protest unless the association notifies the
member insurer that additional time is required to resolve the issues raised by the
protest.
c. Within thirty days after a final decision was made, the association shall notify the
protesting member insurer in writing of that final decision. Within sixty days of
receipt of notice of the final decision, the protesting member insurer may appeal
that final action to the commissioner.
d. In the alternative to rendering a final decision with respect to a protest based on a
question regarding the assessment base, the association may refer protests to
the commissioner for a final decision, with or without a recommendation from the
association.
e. If the protest or appeal on the assessment is upheld, the amount paid in error or
excess must be returned to the member insurer. Interest on a refund due a
protesting member insurer shall be paid at the rate actually earned by the
association.
16. The association may request information of member insurers in order to aid in the
exercise of its power under this section and member insurers shall comply promptly
with a request.