§ 58-48-50. Effect of paid claims. - North Carolina Statutes

§ 58‑48‑50. Effect of paid claims.

(a)        Any personrecovering under this Article shall be deemed to have assigned his rights underthe policy or at law to the Association to the extent of his recovery from theAssociation. Every insured or claimant seeking the protection of this Articleshall cooperate with the Association to the same extent as such person wouldhave been required to cooperate with the insolvent insurer. The Associationshall have no cause of action against the insured of the insolvent insurer forany sums it has paid out except such causes of action as the insolvent insurerwould have had if such sums had been paid by the insolvent insurer. In the caseof an insolvent insurer operating on a plan with assessment liability, paymentsof claims of the Association shall not operate to reduce the liability ofinsureds to the receiver, liquidator, or statutory successor for unpaidassessments.

(a1)      The Associationshall have the right to recover from the following persons the amount of any"covered claim" paid and any and all expenses incurred, includingattorneys' fees and costs of defense, in connection with any claim against theperson or the person's affiliate pursuant to this Article:

(1)        Any insured whosenet worth on December 31 of the year next preceding the date the insurerbecomes insolvent exceeds fifty million dollars ($50,000,000) and whoseliability obligations to other persons are satisfied in whole or in part bypayments under this Article; or

(2)        Any person who is anaffiliate of the insolvent insurer and whose liability obligations to otherpersons are satisfied in whole or in part by payments made under this Article.

(b)        The receiver,liquidator, or statutory successor of an insolvent insurer shall be bound bysettlements of covered claims by the Association or a similar organization inanother state. The court having jurisdiction shall grant such claims priorityequal to that to which the claimant would have been entitled in the absence ofthis Article against the assets of the insolvent insurer. The expenses of theAssociation or similar organization in handling claims shall be accorded thesame priority as the liquidator's expenses.

(c)        The Associationshall periodically file with the receiver or liquidator of the insolventinsurer statements of the covered claims paid by the Association and estimatesof anticipated claims on the Association which shall preserve the rights of theAssociation against the assets of the insolvent insurer. (1971, c. 670, s. 1; 1989, c.206, ss. 4, 5; 2003‑167, s. 2.)