2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 515B - INSURANCE GUARANTY ASSOCIATION
515B.5 - DUTIES AND POWERS OF THE ASSOCIATION.

        515B.5  DUTIES AND POWERS OF THE ASSOCIATION.
         1.  The association shall:
         a.  Be obligated to pay covered claims existing prior to the
      final order of liquidation and arising within thirty days after the
      final order of liquidation, or before the policy expiration date if
      less than thirty days after the final order of liquidation, or before
      the insured replaces the policy or causes its cancellation, if the
      insured does so within thirty days of the final order of liquidation.
      Such obligation shall be satisfied by paying to the claimant an
      amount as follows:
         (1)  The full amount of a covered claim for benefits under a
      workers' compensation insurance coverage.
         (2)  An amount in excess of one hundred dollars but not exceeding
      ten thousand dollars per policy for a covered claim for the return of
      unearned premium.
         (3)  An amount not exceeding the lesser of the policy limits or
      three hundred thousand dollars per claim for all covered claims for
      all damages arising out of any one or series of accidents,
      occurrences, or incidents, regardless of the number of persons making
      claims or the number of applicable policies.
         b.  Be obligated to pay covered claims subject to a limitation
      as established by the rights, duties, and obligations under the
      policy of the insolvent insurer.  However, the association is not
      obligated to pay a claimant an amount in excess of the obligation
      under the policy of the insolvent insurer, regardless of whether such
      claim is based on contract or tort.
         c.  Assess member insurers amounts necessary to pay the
      obligations of the association under paragraph "a" of this
      subsection subsequent to an insolvency, the expenses of handling
      covered claims subsequent to an insolvency, the cost of examinations
      under section 515B.10, and other expenses authorized by this chapter.
      The assessment of each member insurer shall be in the proportion that
      the net direct written premiums of the member insurer for the
      preceding calendar year bear to the net direct written premiums of
      all member insurers for the preceding calendar year.  Each member
      insurer shall be notified of the assessment not later than thirty
      days before it is due.  No member insurer may be assessed in any year
      an amount greater than two percent of that member insurer's net
      direct written premiums for the preceding calendar year.  If the
      maximum assessment, together with the other assets of the
      association, does not provide in any one year an amount sufficient to
      make all necessary payments, the funds available shall be prorated
      and the unpaid portion shall be paid as soon as funds become
      available.  The association may exempt or defer, in whole or in part,
      the assessment of any member insurer if the assessment would cause
      the member insurer's financial statement to reflect amounts of
      capital or surplus less than the minimum amounts required for a
      certificate of authority by any jurisdiction in which the member
      insurer is authorized to transact insurance.  Each member insurer
      serving as a servicing facility pursuant to this section may set off
      against any assessment, authorized payments made on covered claims
      and expenses incurred in the payment of such claims by the member
      insurer. In addition, the association shall have the authority to
      levy an administrative assessment of not more than fifty dollars per
      year per member insurer on a non pro rata basis, which assessment
      shall be credited against any future insolvency assessment. Such
      assessment shall be used to pay authorized expenses not directly
      attributable to any particular insolvency or insolvent insurer.  All
      overdue and unpaid assessments shall draw interest at the rate of
      seven percent per annum.
         The association shall also have the right to pursue and retain for
      its own account salvage and subrogation recoverable on paid covered
      claim obligations.  An obligation of the association to defend an
      insured shall cease upon the association's payment or tender to an
      excess insurer of an amount equal to the lesser of the association's
      covered claim obligation or the applicable policy limits.
         d.  Investigate claims brought against the association and
      adjust, compromise, settle, and pay covered claims to the extent of
      the association's obligations on covered claims and deny all other
      claims.  The association may review settlements, releases, and
      judgments to which the insolvent insurer or its insureds were parties
      to determine the extent to which settlements, releases, and judgments
      may properly be contested, and, to that end, any uncontested or
      default judgment against the insolvent insurer or its insured shall
      not be binding on the association.  The association shall have the
      right to appoint or substitute legal counsel retained to defend
      insureds on covered claims.
         e.  Notify such persons as the commissioner directs under
      section 515B.7, subsection 2, paragraph "a".
         f.  Process claims through its employees or through one or
      more member insurers or other persons designated as servicing
      facilities.  Designation of a servicing facility is subject to the
      approval of the commissioner, but such designation may be declined by
      a member insurer.
         g.  Reimburse each servicing facility for obligations of the
      association paid by the facility and for expenses incurred by the
      facility while handling claims on behalf of the association, and pay
      the other expenses of the association authorized by this chapter.
         2.  The association may:
         a.  Appear in, defend, and appeal any action on a claim
      brought against the association.
         b.  Employ or retain persons necessary to handle claims and
      perform other duties of the association.
         c.  Borrow funds necessary to effect the purposes of this
      chapter in accord with the plan of operation.
         d.  Sue or be sued.
         e.  Negotiate and become a party to contracts necessary to
      carry out the purpose of this chapter.
         f.  Perform such other acts necessary or proper to effectuate
      the purposes of this chapter.
         g.  The board of directors, in its discretion, may from time
      to time refund excess amounts to member insurers that are not needed
      for current or projected liabilities of a particular insolvency.  The
      amount of each refund is equal to the net direct written premiums of
      the member insurer for the preceding calendar year divided by the net
      written premiums of all member insurers for the preceding calendar
      year, multiplied by the total amount to be refunded to all members.
      Any assessments or refunds of any member insurer in amounts not to
      exceed twenty-five dollars may, at the discretion of the board of
      directors, be waived.
         h.  Request that all future payments of workers' compensation
      weekly benefits, medical expenses, or other payments under chapter
      85, 85A, 85B, 86, or 87 be commuted to a present lump sum and upon
      the payment of which, either to the claimant or to a licensed insurer
      for purchase of an annuity or other periodic payment plan for the
      benefit of the claimant, the employer and the association shall be
      discharged from all further liability for the workers' compensation
      claim.  Notwithstanding the provisions of section 85.45, any future
      payment of medical expenses, weekly compensation benefits, or other
      payment by the association under this chapter pursuant to chapter 85,
      85A, 85B, 86, or 87, is deemed an undue expense, hardship, or
      inconvenience upon the employer for purposes of a full commutation
      pursuant to section 85.45, subsection 1, paragraph "b", and the
      workers' compensation commissioner shall fix the lump sum of the
      probable future medical expenses and weekly compensation benefits
      capitalized at their present value upon the basis of interest at the
      rate provided in section 535.3 for court judgments and decrees.  

         Section History: Early Form

         [C71, 73, 75, 77, 79, 81, § 515B.5; 82 Acts, ch 1051, § 2] 

         Section History: Recent Form

         86 Acts, ch 1184, § 6; 88 Acts, ch 1112, § 507; 91 Acts, ch 26, §
      44; 92 Acts, ch 1162, § 40, 41; 97 Acts, ch 186, §15, 16; 98 Acts, ch
      1061, §11; 2001 Acts, ch 69, §32; 2002 Acts, ch 1111, §20, 21; 2008
      Acts, ch 1032, §200
         Referred to in § 515B.6, 515B.9