§ 27-34-11 - Effect of paid claims. - Rhode Island Statutes

SECTION 27-34-11

   § 27-34-11  Effect of paid claims. –(a) Any person recovering under this chapter shall be deemed to have assignedhis or her rights under the policy to the fund to the extent of his recoveryfrom the fund. Every insured or claimant seeking the protection of this chaptershall cooperate with the fund to the same extent as the person would have beenrequired to cooperate with the insolvent insurer. The fund shall have no causeof action against the insured of the insolvent insurer for any sums it has paidout except any causes of action the insolvent insurer would have had if thesums had been paid by the insolvent insurer and except as provided insubsection (b) of this section.

   (b) The fund shall have the right to recover from thefollowing persons the amount of any "covered claim" paid on behalf of theperson pursuant to this chapter:

   (1) Any insured whose net worth on December 31 of the yearnext preceding the date the insurer became an insolvent insurer exceeded fiftymillion dollars ($50,000,000) and whose liability obligations to other personsare satisfied in whole or in part by payments made under this chapter;provided, that there is no recovery of any prejudgment interest on any pendingor future claims against this insured, including claims presently in suit or onappeal; and

   (2) Any person who is an affiliate of the insolvent insurerand whose liability obligations to other persons are satisfied in whole or inpart by payments made under this chapter.

   (c) The receiver, liquidator, or statutory successor of aninsolvent insurer shall be bound by settlements of covered claims by the fundor a similar organization in another state. The court having jurisdiction shallgrant these claims priority equal to that which the claimant would have beenentitled in the absence of this chapter against the assets of the insolventinsurer. The expenses of the fund or similar organization in handling claimsshall be accorded the same priority as the liquidator's expenses.

   (d) The fund shall periodically file with the receiver orliquidator of the insolvent insurer statements of the covered claims paid bythe fund and estimates of anticipated claims on the fund that shall preservethe rights of the fund against the assets of the insolvent insurer.