§ 27-34.3-9. Assessments.
(a) 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 shall be due not less than thirty (30) days after prior written notice
to the member insurers and shall accrue interest at nine percent (9%) per annum on
and after the due date.
(b) There shall be two (2) classes of assessments, as follows:
(1) Class A assessments shall 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.
(2) Class B assessments shall be authorized and called to the extent necessary to carry
out the powers and duties of the association under §â€‚27-34.3-8 with regard to an impaired or an insolvent insurer.
(c)(1) The amount of any Class A assessment shall be determined by the board and may be authorized
and called on a pro rata or non-pro rata basis. If pro rata, the board may provide
that it be credited against future Class B assessments. The total of all non-pro rata
assessment shall not exceed three hundred dollars ($300) per member insurer in any
one calendar year. The amount of any Class B assessment shall be allocated for assessment
purposes among the accounts pursuant to an allocation formula that 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.
(2) Class B assessments against member insurers for each account and subaccount shall
be in the proportion that the premiums received on business in this state by each
assessed member insurer or policies or contracts covered by each account for the three
(3) most recent calendar years for which information is available preceding the year
in which the insurer became insolvent, (or, in the case of an assessment with respect
to an impaired insurer, the three (3) most recent calendar years for which information
is available preceding the year in which the insurer became impaired) bears to premiums
received on business in this state for such calendar years by all assessed member
insurers.
(3) Assessments for funds to meet the requirements of the association with respect to
an impaired or insolvent insurer shall not be authorized or called until necessary
to implement the purposes of this chapter. Classification of assessments under subsection
(b) of this section and computation of assessments under this subsection (c) shall
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 (180) days after the assessment is authorized.
(d) 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 the 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 have caused a deferral have been removed
or rectified, the member insurer shall pay all assessments that were deferred pursuant
to a repayment plan approved by the association.
(e)(1)(i) Subject to the provisions of subsection (e)(1)(ii), 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 shall not in any one calendar
year exceed three percent (3%) 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 (3) calendar years preceding the year in which the insurer became an impaired
or insolvent insurer.
(ii) If two (2) or more assessments are authorized in one calendar year with respect to
insurers that become impaired or insolvent in different calendar years, the average
annual premiums for purposes of the aggregate assessment percentage limitation referenced
in subsection (e)(1)(i) shall be equal and limited to the higher of the three-year
(3) average annual premiums for the applicable subaccount or account as calculated
pursuant to this section.
(iii) If the maximum assessment, together with the other assets of the association in any
account, does not provide in any one year in either account an amount sufficient to
carry out the responsibilities of the association, the necessary additional funds
shall be assessed as soon after this as permitted by this chapter.
(2) 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.
(3) If the maximum assessment for a 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 (c)(2) of this section, 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 (e)(1).
(f) 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 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.
(g) It shall be proper for any member insurer, in determining its premium rates and policy
owner dividends as to any kind of insurance within the scope of this chapter, to consider
the amount reasonably necessary to meet its assessment obligations under this chapter.
(h) The association shall issue to each insurer paying an assessment under this chapter,
other than 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
shall be of equal dignity and priority without reference to amounts or dates of issue.
A certificate of contribution may be shown by the 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.
(i)(1) 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 shall be available to meet association obligations during the pendency
of the protest or any subsequent appeal. Payment shall be accompanied by a statement
in writing that the payment is made under protest and setting forth a brief statement
of the grounds for the protest.
(2) Within sixty (60) 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.
(3) Within thirty (30) days after a final decision has been made, the association shall
notify the protesting member insurer in writing of that final decision. Within sixty
(60) days of receipt of notice of the final decision, the protesting member insurer
may appeal that final action to the commissioner.
(4) 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 the protest to
the commissioner for a final decision, with or without a recommendation from the association.
(5) If the protest or appeal on the assessment is upheld, the amount paid in error or
excess shall be returned to the member company. Interest on a refund due a protesting
member shall be paid at the rate actually earned by the association.
(j) 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 promptly comply
with a request.