N.H. Rev. Stat. § 404-H:8 — NH Code / Title XXXVII / Chapter 404-H / Section 8
404-H:8 Powers and Duties of the Association.
Status: in_force

I. The association shall: (a) (1) Be obligated to pay covered claims existing prior to the order of liquidation and arising within 30 days after the order of liquidation, or before the policy expiration date if less than 30 days after the order of liquidation, or before the insured replaces the policy or causes its cancellation, if he or she does so within 30 days of the order of liquidation. Such obligation shall be satisfied by paying to the claimant an amount as follows: (A) The full amount of a covered claim for benefits under workers' compensation insurance coverage. (B) An amount not exceeding $300,000 for other covered claims. Payment by the association of an amount satisfying the obligations of the association to a person instituting a liability claim shall satisfy the association's obligations to pay the insured. (2) In no event shall the association be obligated to pay an amount in excess of the obligation of the insolvent insurer under the policy or coverage from which the claim arises. (3) Any obligation of the association to defend an insured on a covered claim shall cease upon the association's: (A) Payment, by settlement releasing the insured or on a judgment, of an amount equal to the lesser of the association's covered claim obligation limit or the applicable policy limit; or (B) Tender of such amount. (4) Notwithstanding any other provisions of this chapter, except in the case of a claim for benefits under workers' compensation coverage, a covered claim shall not include a claim filed with the association after the earlier of: (A) Thirty six months after the date of the order of liquidation; or (B) The final date set by the court for the filing of claims against the liquidator or receiver of an insolvent insurer and shall not include any claim filed with the association or a liquidator for protection afforded under the insured's policy for incurred-but-not-reported losses. (5) If the association determines that there may be more than one claimant having a covered claim against the association under the policy or policies of any one insolvent insurer, the association may establish a plan to allocate amounts payable by the association in such manner as the association in its discretion deems equitable. (b) Be deemed the insurer only to the extent of the association's obligation on the covered claims and to such extent, subject to the limitations provided in this chapter, shall have all rights, duties, and obligations of the insolvent insurer as if the insurer had not become insolvent, including but not limited to the right to pursue and retain salvage and subrogation recoverables on paid covered claims obligations. The association shall not be deemed the insolvent insurer for any purpose relating to the issue of whether the association is amenable to the personal jurisdiction of the courts of any jurisdiction. (c) Allocate claims paid and expenses incurred among the 3 accounts separately, and assess member insurers separately for each account amounts necessary to pay the obligations of the association under subparagraph I(a) subsequent to an insolvency, the expenses of handling covered claims subsequent to an insolvency, and other expenses authorized by this chapter. The assessments of each member insurer shall be in the proportion that the net direct written premiums of the member insurer for the calendar year preceding the assessment on the kinds of insurance in the account bears to the net direct written premiums of all member insurers for the calendar year preceding the assessment on the kinds of insurance in the account. Each member insurer shall be notified of the assessment not later than 30 days before it is due. No member insurer may be assessed in any one year on any account an amount greater than 2 percent of that member insurer's net direct written premiums for the calendar year preceding the assessment on the kinds of insurance in the account. If the maximum assessment, together with the other assets of the association in any account, does not provide in any one year in any account an amount sufficient to make all necessary payments from that account, the funds available shall be prorated and the unpaid portion shall be paid as soon thereafter as funds become available. The association shall pay claims in any order that it deems reasonable, including the payment of claims as such are received from the claimants or in groups or categories of claims. 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; provided however that, during the period of deferment, no dividends shall be paid to shareholders or policyholders. Deferred assessments shall be paid when such payment will not reduce capital or surplus below required minimums. Such payments shall be refunded to those companies receiving larger assessments by virtue of such deferment, or at the election of any such company, credited against future assessments. (d) Investigate claims brought against the association and adjust, compromise, settle, and pay covered claims to the extent of the association's obligation and deny all other claims. (e) Not be bound by any settlement, release, compromise, waiver or judgment executed or entered within 12 months prior to an order of liquidation and shall have the right to assert all defenses available to the association including, but not limited to, defenses applicable to determining and enforcing its statutory rights and obligations to any such claim. The association shall be bound by any settlement, release, compromise, waiver or judgment executed or entered into more than one year prior to an order of liquidation; provided, however, such claim is a covered claim and such settlement or judgment was not a result of fraud, collusion, default or failure to defend. Further, as to any covered claims arising from a judgment under any decision, verdict or finding based on the default of the insolvent insurer or its failure to defend, the association either on its own behalf or on behalf of an insured may apply to have such judgment, order, decision, verdict or finding set aside by the same court or administrator that made such judgment, order, decision, verdict or finding and shall be permitted to defend such claim on the merits. (f) Handle claims through its employees or through one or more 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 shall pay the other expenses of the association authorized by this chapter. (h) Notwithstanding any of the powers of the commissioner as liquidator as provided for in RSA 402-C, the association shall have the final authority with respect to the processing and settlement of covered claims for which it becomes responsible pursuant to this chapter, including authority for the use of records of the insolvent insurer directly related to covered claims. At the conclusion of the association's responsibility with respect to any insolvent insurer, any original records of said insolvent insurer then in the possession of the association shall be turned over to the liquidator for ultimate disposal in accordance with RSA 402-C. The association shall cooperate with any agent to the extent possible in identifying policyholders of the agent and the insolvent insurer. II. The association may: (a) Employ or retain such persons as are necessary to handle claims and perform other duties of the association. (b) Borrow funds necessary to effect the purposes of this chapter in accordance with the plan of operation. (c) Sue or be sued, including the power and right to petition to intervene as a party before any court that has jurisdiction over an insolvent insurer as defined by this chapter, and in any administrative proceeding if the result of such administrative proceeding might in the future impose obligations on the association should one or more of the insurer parties to the proceeding become insolvent. (d) Negotiate and become a party to such contracts as are necessary to carry out the purposes of this chapter. (e) Perform such other acts as are necessary or proper to effectuate the purposes of this chapter. (f) Refund to the member insurers in proportion to the contribution of each member insurer to that account that amount by which the assets of the account exceed the liabilities, if, at the end of any calendar year, the board of directors finds that the assets of the association in any account exceed the liabilities of that account as estimated by the board of directors for the coming year. III. In any suit involving the association: (a) Except for actions by member insurers aggrieved by final actions or decisions of the association pursuant to RSA 404-H:9, IV(h) of this chapter, all actions relating to or arising out of this chapter shall be brought in the courts in the state. Such courts shall have exclusive jurisdiction over all actions relating to or arising out of this chapter against the association. (b) Exclusive venue in any action by or against the association is the superior court for the county of Merrimack, state of New Hampshire. The association may, at the option of the association, waive such venue as to specific actions. IV. In the event of an insolvency resulting in covered claims payable by the association in excess of its capacity to pay from assessments collected under RSA 404-H:8, I(c), the association may borrow funds pursuant to RSA 404-H:8, II(b) from any domestic insurer willing and able to enter into an agreement to provide that funding, or a portion thereof, with the approval of the commissioner.