§ 27-14.3-42. Special provisions for third-party claims.
(a) Whenever any third party asserts a cause of action against an insured of an insurer
in liquidation, the third party may file a claim with the liquidator.
(b) Whether or not the third party files a claim, the insured may file a claim on the
insured's own behalf in the liquidation. If the insured fails to file a claim by the
date for filing claims specified in the order of liquidation or within sixty (60)
days after the mailing of the notice required by § 27-14.3-26, whichever is later, the insured is an unexcused late filer.
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§ 27-14.3-42. Special provisions for third-party claims.
(a) Whenever any third party asserts a cause of action against an insured of an insurer
in liquidation, the third party may file a claim with the liquidator.
(b) Whether or not the third party files a claim, the insured may file a claim on the
insured's own behalf in the liquidation. If the insured fails to file a claim by the
date for filing claims specified in the order of liquidation or within sixty (60)
days after the mailing of the notice required by § 27-14.3-26, whichever is later, the insured is an unexcused late filer.
(c) The liquidator shall make the liquidator's recommendations to the court under § 27-14.3-46 for the allowance of an insured's claim under subsection (b) of this section after
consideration of the probable outcome of any pending action against the insured on
which the claim is based, the probable damages recoverable in the action, and the
probable costs and expenses of defense. After allowance by the court, the liquidator
shall withhold any dividends payable on the claim, pending the outcome of litigation
and negotiation with the insured. Whenever it seems appropriate, the liquidator shall
reconsider the claim on the basis of additional information and amend the liquidator's
recommendations to the court. The insured shall be afforded the same notice and opportunity
to be heard on all changes in the recommendation as in its initial determination.
The court may amend its allowance as it thinks appropriate. As claims against the
insured are settled or barred, the insured shall be paid from the amount withheld
the same percentage dividend as was paid on other claims of similar property, based
on the lesser of: (1) The amount actually recovered from the insured by action or
paid by agreement plus the reasonable costs and expense of defense; or (2) The amount
allowed on the claims by the court. After all claims are settled or barred, any sum
remaining from the amount withheld shall revert to the undistributed assets of the
insurer. Delay in final payment under this subsection shall not be a reason for unreasonable
delay of the final distribution and discharge of the liquidator.
(d) If several claims founded upon one policy are filed, whether by third parties or as
claims by the insured under this section, and the aggregate allowed amount of the
claims to which the same limit of liability in the policy is applicable exceeds that
limit, each claim as allowed shall be reduced in the same proportion so that the total
equals the policy limit. Claims by the insured shall be evaluated as in subsection
(c) of this section. If any insured's claim is subsequently reduced under subsection
(c) of this section, the freed amount shall be apportioned ratably among the claims
which have been reduced under this subsection.
(e) No claim may be presented under this section if it is or may be covered by any guaranty
association or foreign guaranty association.