§ 26-42-103 — Coverage and limitations

Wyoming § 26-42-103

• Jurisdiction: Wyoming
• Title 26: Insurance Code
• Ch. 42: WYOMING LIFE AND HEALTH INSURANCE

Text

(a) This act shall provide coverage for the policies and
contracts specified in subsection (b) of this section and
provide coverage as follows:
(i) To persons who are owners, certificate holders or
enrollees under the policies or contracts other than structured
settlement annuities and in each case who:
(A) Are residents; or
(B) Are not residents but only under all of the
following conditions:
(I) The member insurer that issued the
policies or contracts is domiciled in this state;
(II) The states in which the persons reside
have associations similar to the association created by this
act; and
(III) The persons are not eligible for
coverage by an association in any other state due to the fact
that the insurer or health maintenance organization was not
licensed in the state at the time specified in the state's
guaranty association law.
(ii) To persons who are the beneficiaries, assignees
or payees of the persons described in paragraph (a)(i) of this
section, including health care providers rendering services
covered under health insurance policies or certificates,
regardless of where they reside except for nonresident
certificate holders under group policies or contracts;
(iii) For structured settlement annuities specified
in subsection (b) of this section, paragraphs (i) and (ii) of
this subsection shall not apply, and this act shall, except as
provided in paragraphs (iv) and (v) of this subsection, provide
coverage to a person who is a payee under a structured
settlement annuity or beneficiary of a payee if the payee is
deceased, if the payee:
(A) Is a resident, regardless of where the
contract owner resides; or
(B) Is not a resident, but only under both of
the following conditions:
(I) The contract owner of the structured
settlement annuity is a resident, or the contract owner of the
structured settlement annuity is not a resident, but the insurer
that issued the structured settlement annuity is domiciled in
this state and the state in which the contract owner resides has
an association similar to the association created by this act;
and
(II) Neither the payee or beneficiary of
the contract owner nor the contract owner is eligible for
coverage by the association of the state in which the payee or
contract owner resides.
(iv) This act shall not provide coverage to:
(A) A person who is a payee or beneficiary of a
contract owner resident of this state, if the payee or
beneficiary is afforded any coverage by the association of
another state; or
(B) A person who acquires rights to receive
payments through a structured settlement factoring transaction
as defined in 26 U.S.C. §5891(c)(3)(A), regardless if the
transaction occurred before or after 26 U.S.C. § 5891(c)(3)(A)
became effective.
(v) This act is intended to provide coverage to a
person who is a resident of this state and, in special
circumstances, to a nonresident. In order to avoid duplicate
coverage, if a person who would otherwise receive coverage under
this act is provided coverage under the laws of any other state,
the person shall not be provided coverage under this act. In
determining the application of the provisions of this paragraph
in situations where a person could be covered by the association
of more than one (1) state, whether as an owner, payee,
enrollee, beneficiary or assignee, this act shall be construed
in conjunction with other state laws to result in coverage by
only one (1) association.
(b) This act shall provide coverage to persons specified
in subsection (a) of this section for policies or contracts of
direct, nongroup life insurance, health insurance including
health maintenance organization subscriber contracts and
certificates, annuities and supplemental contracts to any of
these policies or contracts and for certificates under direct
group policies and contracts issued by member insurers except as
limited by this act. Annuity contracts and certificates under
group annuity contracts include allocated funding agreements,
structured settlement annuities and any immediate or deferred
annuity contracts.
(c) This act shall not provide coverage for:
(i) Any portion of a policy or contract not
guaranteed by the insurer or under which the risk is borne by
the policyholder or contract holder;
(ii) Any policy or contract of reinsurance unless
assumption certificates have been issued pursuant to the
reinsurance policy or contract;
(iii) Excluding any portion of a policy or contract,
including a rider, that provides long term care or other health
insurance benefits, any portion of a policy or contract to the
extent that the rate of interest on which it is based:
(A) Averaged over the period of four (4) years
prior to the date on which the member insurer becomes an
impaired or insolvent insurer under this act, exceeds a rate of
interest determined by subtracting two (2) percentage points
from Moody's Corporate Bond Yield Average averaged for that same
four (4) year period or for a lesser period if the policy or
contract was issued less than four (4) years before the member
insurer becomes an impaired or insolvent insurer under this act;
and
(B) On and after the date on which the member
insurer becomes an impaired or insolvent insurer under this act,
exceeds the rate of interest determined by subtracting three (3)
percentage points from the most recent and available Moody's
Corporate Bond Yield Average.
(iv) Any portion of a policy or contract issued to a
plan or program of an employer, association or other person to
provide life, health or annuity benefits to its employees,
members or others to the extent that the plan or program is
self-funded or uninsured, including but not limited to benefits
payable by an employer, association or similar entity under:
(A) A multiple employer welfare arrangement as
defined in Section 3(40) of the Employee Retirement Income
Security Act of 1974, 29 U.S.C. § 1002(40);
(B) A minimum premium group insurance plan;
(C) A stop-loss group insurance plan; or
(D) An administrative services only contract.
(v) Any portion of a policy or contract to the extent
it provides dividends or experience rating credits, voting
rights or provides payment of any fees or allowances to any
person, including the policyholder or contract holder, in
connection with the service to or administration of the policy
or contract;
(vi) Any policy or contract issued in this state by a
member insurer at a time when it was not licensed or did not
have a certificate of authority to issue the policy or contract
in this state;
(vii) Any annuity contract or group annuity
certificate which is not issued to and not owned by an
individual, except to the extent of any annuity benefits
guaranteed to an individual by an insurer under the contract or
certificate;
(viii) Any annuity contract or group annuity
certificate which is issued by a nonprofit insurance company
exclusively for the benefit of nonprofit educational
institutions and their employees for the purpose of providing
retirement benefits;
(ix) A portion of a policy or contract to the extent
that the assessments required by W.S. 26-42-107 with respect to
the policy or contract are preempted or otherwise not permitted
by federal or state law;
(x) An obligation that does not arise under the
express written terms of the policy or contract issued by the
member insurer to the enrollee, certificate holder, contract
owner or policy owner, including without limitation:
(A) Claims based on marketing materials;
(B) Claims based on side letters, riders or
other documents that were issued by the member insurer without
meeting applicable policy or contract form filing or approval
requirements;
(C) Misrepresentations of or regarding policy or
contract benefits;
(D) Extra-contractual claims; or
(E) A claim for penalties or consequential or
incidental damages.
(xi) A contractual agreement that establishes the
member insurer's obligations to provide a book value accounting
guaranty for defined contribution benefit plan participants by
reference to a portfolio of assets that is owned by the benefit
plan or its trustee, which in each case is not an affiliate of
the member insurer;
(xii) An unallocated annuity contract;
(xiii) A policy or contract providing any hospital,
medical, prescription drug or other health care benefits
pursuant to Part C or Part D of Subchapter XVIII, Chapter 7 of
Title 42 of the United States Code (commonly known as Medicare
Part C & D) or Subchapter XIX, Chapter 7 of Title 42 of the
United States Code (commonly known as Medicaid) or any
regulations issued pursuant thereto;
(xiv) A portion of a policy or contract to the extent
it provides for interest or other changes in value to be
determined by the use of an index or other external reference
stated in the policy or contract, but which have not been
credited to the policy or contract, or as to which the policy or
contract owner's rights are subject to forfeiture, as of the
date the member insurer becomes an impaired or insolvent insurer
under this act, whichever is earlier. If a policy's or
contract's interest or changes in value are credited less
frequently than annually, then for purposes of determining the
values that have been credited and are not subject to forfeiture
under this provision, the interest or change in value determined
by using the procedures defined in the policy or contract will
be credited as if the contractual date of crediting interest or
changing values was the date of impairment or insolvency,
whichever is earlier, and will not be subject to forfeiture;
(xv) Structured settlement annuity benefits to which
a payee or beneficiary has transferred his rights in a
structured settlement factoring transaction as defined in 26
U.S.C. § 5891(c)(3)(A), regardless if the transaction occurred
before or after 26 U.S.C. § 5891(c)(3)(A) became effective.
(d) The benefits for which the association may be liable
shall in no event exceed the lesser of:
(i) The contractual obligations for which the member
insurer is liable or would have been liable if it was not an
impaired or insolvent insurer; or
(ii) With respect to any one (1) life, regardless of
the number of policies or contracts:
(A) Three hundred thousand dollars ($300,000.00)
in life insurance death benefits but not more than one hundred
thousand dollars ($100,000.00) in net cash surrender and net
cash withdrawal values for life insurance;
(B) For health insurance benefits:
(I) One hundred thousand dollars
($100,000.00) for coverages not defined as disability insurance,
disability income insurance, health benefit plan or long term
care insurance including any net cash surrender and net cash
withdrawal values;
(II) Three hundred thousand dollars
($300,000.00) for disability insurance, disability income
insurance and long-term care insurance;
(III) Three hundred thousand dollars
($300,000.00) for health benefit plans.
(C) Two hundred fifty thousand dollars
($250,000.00) in the present value of annuity benefits including
net cash surrender and net cash withdrawal values;
(D) With respect to each payee of a structured
settlement annuity or beneficiary or beneficiaries of the payee
if deceased, two hundred fifty thousand dollars ($250,000.00) in
present value annuity benefits, in the aggregate, including net
cash surrender and net cash withdrawal values;
(E) However, in no event shall the association
be obligated to cover more than:
(I) An aggregate of five hundred thousand
dollars ($500,000.00) in benefits with respect to any one (1)
life under paragraphs (A) through (D) of this subsection; or
(II) With respect to one (1) owner of
multiple nongroup policies of life insurance, whether the policy
owner or contract owner is an individual, firm, corporation or
other person, and whether the persons insured are officers,
managers, employees or other persons, more than five million
dollars ($5,000,000.00) in benefits, regardless of the number of
policies and contracts held by the owner.
(F) The limitations set forth in this subsection
are limitations on the benefits for which the association is
obligated before taking into account either its subrogation and
assignment rights or the extent to which those benefits could be
provided out of the assets of the impaired or insolvent insurer
attributable to covered policies. The costs of the association's
obligations under this act may be met by the use of assets
attributable to covered policies or reimbursed to the
association pursuant to its subrogation and assignment rights;
(G) For purposes of this act, benefits provided
by a long term care rider to a life insurance policy or annuity
contract shall be considered the same type of benefits as the
base life insurance policy or annuity contract to which it
relates.
(e) The liability of the association is strictly limited
by the express terms of the covered policies and contracts and
by the provisions of this act and is not affected by the
contents of any brochures, illustrations, advertisements or oral
statements by agents, brokers or others used or made in
connection with their sale. The association is not liable for
any extracontractual, exemplary or punitive damages, attorney's
fees or interest other than as provided for by the terms of such
policies or contracts, as limited by this act.
(f) Repealed By Laws 2014, Ch. 21, § 2.
(g) In performing its obligations to provide coverage
under W.S. 26-42-106, the association shall not be required to
guarantee, assume, reinsure, reissue or perform, or cause to be
guaranteed, assumed, reinsured, reissued or performed, the
contractual obligations of the insolvent or impaired insurer
under a covered policy or contract that do not materially affect
the economic values or economic benefits of the covered policy
or contract.