SB 960 - This act requires all workers' compensation large deductible claims which are also covered claims to be turned over to the responsible guaranty association, unless otherwise stipulated by the guaranty association. However, in the event that an insured pays a deductible claim pursuant to an agreement with a guaranty association, no receiver or guaranty association shall have any obligation to pay such claim or reimburse the insured.
The act entitles guaranty associations to reimbursement, subject to any reasonable and actual expenses recovered by the receiver, from the insured for payment of deductible claims in the event that the insurer would have been entitled to such reimbursement. If the guaranty association is not reimbursed, they are entitled to assert a claim for the amount owed in subsequent disciplinary proceedings.
The receiver is required to take all commercially reasonable actions to collect reimbursements for deductible claims and bill the insured for such reimbursement. Insolvency of the insurer or its inability to perform its obligations under the policy is not a defense to the insured's failure to reimburse, except in the case in the case of gross negligence or an allegation of improper handling or payment of a deductible claim.
The act requires receivers to utilize collateral, if available, to secure the insured's obligations to fund or reimburse deductible claims or other secured obligations. The act sets out the procedures for satisfying claims with collateral.
The provisions of this act are only applicable to workers' compensation large deductible policies issued by an insurer subject to delinquency proceedings. Moreover, only the court having jurisdiction over the delinquency proceedings shall have jurisdiction over the provisions of this act.
This act contains an emergency clause.
This act is identical to HB 1763 (2016), which was vetoed by the Governor, and similar to SB 402 (2015), and HB 609 (2015).