§ 26-42-106 — Powers and duties of the association

Wyoming § 26-42-106

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

Text

(a) If a member insurer is an impaired insurer, the
association may in its discretion and subject to any conditions
imposed by the association that do not impair the contractual
obligations of the impaired insurer, that are approved by the
commissioner:
(i) Guarantee, assume, reissue or reinsure or cause
to be guaranteed, assumed, reissued or reinsured any or all of
the policies or contracts of the impaired insurer;
(ii) Provide monies, pledges, loans, notes,
guarantees, or other means proper to effectuate this subsection
and assure payment of the contractual obligations of the
impaired insurer pending action taken as authorized by this
subsection.
(iii) Repealed By Laws 2014, Ch. 21, § 2.
(b) Repealed By Laws 2014, Ch. 16, § 2.
(c) Repealed By Laws 2014, Ch. 16, § 2.
(d) If a member insurer is an insolvent insurer, the
association shall, in its discretion, do one (1) of the
following:
(i) Guaranty, assume, reissue or reinsure or cause to
be guaranteed, assumed, reissued or reinsured, the policies or
contracts of the insolvent insurer and provide monies, pledges,
guarantees or other means as reasonably necessary to discharge
the duties;
(ii) Assure payment of the contractual obligations of
the insolvent insurer and provide monies, pledges, guarantees or
other means as reasonably necessary to discharge the duties;
(iii) With respect to life and health insurance
policies and annuities, provide benefits and coverages in
accordance with subsection (e) of this section; or
(iv) With respect to health benefit plans that are
subject to state or federal guaranteed issue requirements,
terminate the policies no later than sixty (60) days after the
entry of an order of liquidation with the approval of the
commissioner.
(e) With respect to policies and contracts and when
proceeding under paragraph (d)(iii) of this section, the
association:
(i) Shall assure payment of benefits that would have
been payable under the policies or contracts of the insolvent
insurer for claims incurred:
(ii) Shall make diligent efforts to provide all known
insureds, enrollees or annuitants for nongroup policies and
contracts, or group policy owners or contracts owners with
respect to group policies and contracts, thirty (30) days notice
of the termination of the benefits provided;
(iii) For nongroup policies and contracts covered by
the association, shall make available to each known insured,
enrollee or annuitant, or owner if other than the insured or
annuitant and with respect to an individual formerly an insured,
enrollee or annuitant under a group policy or contract who is
not eligible for replacement group coverage, make available
substitute coverage on an individual basis in accordance with
the provisions of paragraph (iv) of this subsection, if the
insureds, enrollees or annuitants had a right under law or the
terminated policy, contract or annuity to convert coverage to
individual coverage or to continue an individual policy,
contract or annuity in force until a specified age or for a
specified time during which the insurer or health maintenance
organization had no right unilaterally to make changes in any
provisions of the policy, contract or annuity or had a right
only to make changes in premium by class;
(iv) In providing the substitute coverage required
under paragraph (iii) of this subsection, may offer either to
reissue the terminated coverage or to issue an alternative
policy or contract at actuarially justified rates subject to the
prior approval of the commissioner. Alternative or reissued
policies or contracts shall be offered without requiring
evidence of insurability and shall not provide for any waiting
period or exclusion that would not have applied under the
terminated policy or contract. The association may reinsure any
alternative or reissued policy or contract;
(v) May adopt alternative policies or contracts of
various types for future issuance without regard to any
particular impairment or insolvency. The alternative policies:
(A) Are subject to the approval of the
commissioner;
(B) Shall contain at least the minimum statutory
provisions required in this state and provide benefits that are
not unreasonable in relation to the premium charged;
(C) Shall have premiums set by the association
in accordance with a table of rates which it adopts and which
reflect the amount of insurance to be provided and the age and
class of risk of each insured but do not reflect any changes in
the health of the insured after the original policy or contract
was last underwritten;
(D) Shall provide coverage of a type similar to
that of the policy or contract issued by the impaired or
insolvent insurer, as determined by the association.
(vi) If the association elects to reissue terminated
coverage at a premium rate different from that charged under the
terminated policy or contract, shall set the premium at
actuarially justified rates and in accordance with the amount of
insurance or coverage provided and the age and class of risk,
subject to prior approval of the commissioner or a court of
competent jurisdiction; and
(vii) With respect to coverage under any policy or
contract of the impaired or insolvent insurer or under any
reissued or alternative policy or contract, shall have its
obligations cease on the date coverage or the policy or contract
is replaced by another similar policy or contract by the policy
owner or contract owner, the insured, the enrollee or the
association.
(f) When proceeding under subsection (d) of this section
with respect to any policy or contract carrying guaranteed
minimum interest rates, the association shall assure the payment
or crediting of a rate of interest consistent with W.S.
26-42-103(c)(iii).
(g) Nonpayment of premiums within thirty-one (31) days
after the date required under the terms of any guaranteed,
assumed, alternative or reissued policy or contract or
substitute coverage shall terminate the association's
obligations under the policy, contract or coverage incurred
pursuant to this act, except with respect to any claims incurred
or any net cash surrender value which may be due in accordance
with the provisions of this act.
(h) Premiums due for coverage after entry of an order of
liquidation of an insolvent insurer belongs to and is payable at
the direction of the association, and the association is liable
for unearned premiums due to policy or contract owners arising
after the entry of the order.
(j) The protection provided by this act shall not apply
where any guaranty protection is provided to residents of this
state by the laws of the domiciliary state or jurisdiction of
the impaired or insolvent insurer other than this state.
(k) In carrying out its duties under subsection (d) of
this section the association may, subject to approval by a court
of competent jurisdiction:
(i) Impose permanent policy or contract liens in
connection with any guarantee, assumption or reinsurance
agreement, if the association finds that the amounts which may
be assessed under this act are less than the amounts needed to
assure full and prompt performance of the association's duties
under this act or that the economic or financial conditions as
they affect member insurers are sufficiently adverse that it is
within the public interest to render the imposition of the
permanent policy or contract liens;
(ii) Impose temporary moratoriums or liens on
payments of cash values and policy loans or any other right to
withdraw funds held in conjunction with policies or contracts in
addition to any contractual provisions for deferral of cash or
policy loan value. In addition, in the event of a temporary
moratorium or moratorium charge imposed by the receivership
court on payment of cash values or policy loans, or on any other
right to withdraw funds held in conjunction with policies or
contracts, out of the assets of the impaired or insolvent
insurer, the association may defer the payment of cash values,
policy loans or other rights by the association for the period
of the moratorium or moratorium charge imposed by the
receivership court, except for claims covered by the association
to be paid in accordance with a hardship procedure established
by the liquidator or rehabilitator and approved by the
receivership court.
(m) A deposit in this state, held pursuant to law or
required by the commissioner for the benefit of creditors,
including policy owners or contract owners, not turned over to
the domiciliary liquidator upon the entry of a final order of
liquidation or order approving a rehabilitation plan of a member
insurer domiciled in this state or in a reciprocal state shall
be promptly paid to the association. The association shall be
entitled to retain a portion of any amount so paid to it equal
to the percentage determined by dividing the aggregate amount of
policy owners' or contract owners' claims related to that
insolvency for which the association has provided statutory
benefits by the aggregate amount of all policy owners' or
contract owners' claims in this state related to that insolvency
and shall remit to the domiciliary receiver the amount so paid
to the association less the amount retained pursuant to this
subsection. Any amount so paid to the association and retained
by it shall be treated as a distribution of estate assets
pursuant to applicable state receivership law dealing with early
access disbursements.
(n) If the association fails to act within a reasonable
period of time as provided in subsections (d) and (e) of this
section, the commissioner shall have the powers and duties of
the association under this act with respect to insolvent
insurers.
(o) The association may render assistance and advice to
the commissioner upon his request concerning rehabilitation,
payment of claims, continuance of coverage or the performance of
other contractual obligations of any impaired or insolvent
insurer.
(p) The association shall have standing to appear before
any court or agency in this state with jurisdiction over an
impaired or insolvent insurer concerning which the association
is or may become obligated under this act or with jurisdiction
over any person or property against which the association may
have rights through subrogation or otherwise. Standing shall
extend to all matters germane to the powers and duties of the
association, including but not limited to, proposals for
reinsuring, reissuing, modifying or guaranteeing the policies or
contracts of the impaired or insolvent insurer and the
determination of the policies or contracts and contractual
obligations. The association shall also have the right to appear
or intervene before a court or agency in any state with
jurisdiction over an impaired or insolvent insurer if the
association is or may become obligated or with jurisdiction over
any person or property against whom the association may have
rights through subrogation or otherwise.
(q) Any person receiving benefits under this act shall be
deemed to have assigned the rights under and any causes of
action against any person for losses arising under, resulting
from or otherwise relating to the covered policy or contract to
the association to the extent of the benefits received because
of this act, whether the benefits are payments of or on account
of contractual obligations, continuation of coverage or
provision of substitute or alternative policies, contracts or
coverages. The association may require an assignment to it of
the rights and cause of action by any enrollee, payee, policy or
contract owner, beneficiary, insured or annuitant as a condition
precedent to the receipt of any right or benefits conferred by
this act upon the person. The subrogation rights of the
association under this subsection shall have the same priority
against the assets of the impaired or insolvent insurer as that
possessed by the person entitled to receive benefits under this
act. In addition, the association shall have all common law
rights of subrogation and any other equitable or legal remedy
that would have been available to the impaired or insolvent
insurer or owner, beneficiary, enrollee or payee of a policy or
contract with respect to the policy or contracts and shall
include, in the case of a structured settlement annuity, any
rights of the owner, beneficiary or payee of the annuity, to the
extent of benefits received pursuant to this act, against a
person originally or by succession responsible for the losses
arising from the personal injury relating to the annuity or
payment therefor, excluding any person responsible solely by
reason of serving as an assignee in respect to a qualified
assignment under section 130 of the Internal Revenue Code. If
the provisions of this subsection are invalid or ineffective
with respect to any person or claim for any reason, the amount
payable by the association with respect to the related covered
obligations shall be reduced by the amount realized by any other
person with respect to the person or claim that is attributable
to the policies or portion thereof covered by the association.
If the association has provided benefits with respect to a
covered obligation and a person recovers amounts as to which the
association has rights as described in this subsection, the
person shall pay to the association the portion of the recovery
attributable to the policies or portion thereof covered by the
association.
(r) The association may:
(i) Enter into contracts as necessary or proper to
carry out the provisions and purposes of this act;
(ii) Sue or be sued including taking any legal
actions necessary or proper to recover any unpaid assessments
under W.S. 26-42-107 and to settle claims or potential claims
against it;
(iii) Borrow money to effect the purposes of this
act. Any notes or other evidence of indebtedness of the
association not in default are legal investments for domestic
member insurers and may be carried as admitted assets;
(iv) Employ or retain persons as necessary to handle
the financial transactions of the association and to perform
other functions as necessary or proper under this act;
(v) Take legal action as necessary or appropriate to
avoid or recover payment of improper claims;
(vi) Exercise, for the purposes of this act and to
the extent approved by the commissioner, the powers of a
domestic life insurer, health maintenance organization or health
insurer. The association shall not issue policies or contracts
other than those issued to perform its obligations under this
act;
(vii) Organize itself as a corporation or in other
legal form permitted by the laws of the state;
(viii) Request information from a person seeking
coverage from the association in order to aid the association in
determining its obligations under this act with respect to the
person, and the person shall promptly comply with the request;
(ix) Unless prohibited by law, in accordance with the
terms and conditions of the policy or contract, file for
actuarially justified rate or premium increases for any policy
or contract for which it provides coverage under this act;
(x) Take other necessary or appropriate action to
discharge its duties and obligations under this act or to
exercise its powers under this act.
(s) The association may join an organization of one (1) or
more other state associations of similar purposes to further the
purposes and administer the powers and duties of the
association.
(t) With respect to covered policies or contracts for
which the association becomes obligated after an entry of an
order of liquidation or rehabilitation, the association may
elect to succeed to the rights of the insolvent insurer arising
after the date of the order of liquidation or rehabilitation
under any contract of reinsurance to which the insolvent insurer
was a party, to the extent that the contract provides coverage
for losses occurring after the date of the order of liquidation
or rehabilitation. As a condition to making this election, the
association shall pay all unpaid premiums due under the contract
for coverage relating to periods before and after the date of
the order of liquidation or rehabilitation.
(u) The board of directors of the association shall have
discretion and may exercise reasonable business judgment to
determine the means by which the association is to provide the
benefits of this act in an economical and efficient manner.
(w) Where the association has arranged or offered to
provide the benefits of this act to a covered person under a
plan or arrangement that fulfills the association's obligations
under this act, the person shall not be entitled to benefits
from the association in addition to or other than those provided
under the plan or arrangement.
(y) The association shall not be required to give an
appeal bond in an appeal that relates to a cause of action
arising under this act.
(z) In carrying out its duties in connection with
guaranteeing, assuming, reissuing or reinsuring policies or
contracts under subsection (a) or (d) of this section, the
association may, subject to approval of the commissioner, issue
substitute coverage for a policy or contract that provides an
interest rate, crediting rate or similar factor determined by
use of an index or other external reference stated in the policy
or contract employed in calculating returns or changes in value
by issuing an alternative policy or contract in accordance with
the following provisions:
(i) In lieu of the index or other external reference
provided for in the original policy or contract, the alternative
policy or contract provides for a fixed interest rate, payment
of dividends with minimum guarantees or a different method for
calculating interest or changes in value;
(ii) There is no requirement for evidence of
insurability, waiting period or other exclusion that would not
have applied under the replaced policy or contract; and
(iii) The alternative policy or contract is
substantially similar to the replaced policy or contract in all
other material terms.