§ 27-34-11.5. Net worth exclusion. [Effective until January 1, 2026.]
(a) For purposes of this section, "high net worth insured� shall mean any insured, excluding
state and local governments, whose net worth exceeds fifty million dollars ($50,000,000)
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 and affiliates
as calculated on a consolidated basis.
(b)(1) The association shall not be obligated to pay any first-par
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§ 27-34-11.5. Net worth exclusion. [Effective until January 1, 2026.]
(a) For purposes of this section, "high net worth insured� shall mean any insured, excluding
state and local governments, whose net worth exceeds fifty million dollars ($50,000,000)
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 and affiliates
as calculated on a consolidated basis.
(b)(1) The association shall not be obligated to pay any first-party claims by a high net
worth insured.
(2) The association shall have the right to recover from the high net worth insured all
amounts paid by the association to or on behalf of such insured, whether for indemnity,
defense, or otherwise.
(c) The association shall not be obligated to pay any claim that would otherwise be a
covered claim that is an obligation to or on behalf of a person who has a net worth
greater than that allowed by the insurance guaranty association law of the state of
residence of the claimant at the time specified by that state's applicable law, and
which association has denied coverage to that claimant on that basis.
(d) The association shall establish reasonable procedures subject to the approval of the
commissioner for requesting financial information from insureds on a confidential
basis for purposes of applying this section, provided that the financial information
may be shared with any other association similar to the association and the liquidator
for the insolvent insurer on the same confidential basis. Any request to an insured
seeking financial information must advise the insured of the consequences of failing
to provide the financial information. If an insured refuses to provide the requested
financial information where it is requested and available, the association may, until
such time as the information is provided, provisionally deem the insured to be a high
net worth insured for the purpose of denying a claim under subsection (b).
(e) In any lawsuit contesting the applicability of this section where the insured has
refused to provide financial information under the procedure established pursuant
to subsection (d), the insured shall bear the burden of proof concerning its net worth
at the relevant time. If the insured fails to prove that its net worth at the relevant
time was less than the applicable amount, the court shall award the association its
full costs, expenses, and reasonable attorney's fees in contesting the claim.