290 
assessments under section 1608 and to settle claims 
or potential claims against the Corporation; 
(3) borrow money to effect the purposes of this 
title (and any notes or other evidence of indebted-
ness of the Corporation not in default shall be legal 
investments for national insurers and may be carried 
as assets); 
(4) employ or retain such persons as are nec-
essary or appropriate to handle the financial trans-
actions of the Corporation and to perform such 
other functions as become necessary or proper under 
this title; 
(5) take such legal action as may be necessary 
or appropriate to avoid or recover payment of im-
proper claims; 
(6) exercise, for the purposes of this title and 
to the extent approved by the Commissioner, the 
powers of a national insurer, except that the Cor-
poration may not issue insurance policies or annuity 
contracts other than those issued to provide the pro-
tections under this title; 
(7) request information from a person seeking 
protection under this title in order to aid the Cor-
poration in determining its obligations under this 
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291 
title with respect to the person, which person shall 
promptly comply with the request; and 
(8) take other necessary or appropriate action 
to discharge the duties and obligations of the Cor-
poration under this title or to exercise the powers of 
the Corporation under this title. 
SEC. 1607. SUBROGATION. 
(a) IN GENERAL.—Persons receiving benefits or pay-
ments for claims under this title shall be deemed to have 
assigned their rights under, and any causes of action 
against any person for losses arising under, resulting 
from, or otherwise relating to, their covered policies to the 
Corporation, and the Corporation shall have a claim by 
way of subrogation to the rights of such persons against 
the assets of the insolvent insurer, to the extent of the 
benefits received or claims paid because of this title. The 
Corporation shall also have the right to require an assign-
ment to the Corporation of such rights and cause of action 
by any payee, policyowner, beneficiary, insured, or annu-
itant as a condition precedent to the receipt of any right 
or benefits conferred by this title upon the person. 
(b) COMMON LAW RIGHTS.—In addition to sub-
section (a), the Corporation shall have all common law 
rights of subrogation and any other equitable or legal rem-
edy that would have been available to the national insurer 
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292 
or policyowner, beneficiary, or payee of an insurance policy 
with respect to the policy. 
(c) PRIORITY.—The priority of the subrogation rights 
of the Corporation against the assets of a national insurer 
shall be governed by the regulations issued by the Com-
missioner pursuant to section 1504. 
(d) RESULT IF FOUND INVALID OR INEFFECTIVE.— 
If any other provision of this section is held to be invalid 
or ineffective with respect to any person or claim for any 
reason, the amount payable under this title with respect 
to the related benefits or payments under this title shall 
be reduced by the amount realized by any other person 
with respect to the person or claim that is attributable 
to the insurance policies (or portion of the insurance poli-
cies) covered by this title. 
(e) PAYMENT OF PORTION.—If benefits or payments 
have been provided under this title with respect to a cov-
ered obligation and a person recovers amounts as to which 
the Corporation has rights, as described in this section, 
the person shall pay to the Corporation the portion of the 
recovery attributable to the insurance policies (or portion 
of the insurance policies) covered by this title. 
SEC. 1608. ASSESSMENTS. 
(a) ASSESSMENTS BY CORPORATION AUTHORIZED.— 
For the purpose of providing the funds necessary to pro-
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293 
vide the benefits or payments under this title, the Corpora-
tion shall be authorized to assess member insurers sepa-
rately for each account, at such time and for such amounts 
as the board of directors of the Corporation finds nec-
essary, in accordance with this section. 
(b) CLASSES OF ASSESSMENTS.— 
(1) IN GENERAL.—The Corporation shall im-
pose 3 classes of assessments in accordance with 
paragraphs (2) through (4). 
(2) 
GENERAL
ADMINISTRATIVE
ASSESS-
MENTS.— 
(A) IN GENERAL.—Each member insurer 
shall be assessed an amount necessary to cover 
the general administrative and legal costs of the 
Corporation, other than the costs specified in 
paragraphs (3) and (4). 
(B) AMOUNT.—In setting the amount of 
the assessment under subparagraph (A), the 
Corporation shall divide such administrative 
and legal expenses equally among all member 
insurers. 
(C) DEPOSIT.—The amount collected pur-
suant to this paragraph shall be deposited, in 
equal amounts, in the accounts established pur-
suant to section 1603(f). 
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294 
(3) PROPERTY/CASUALTY ASSESSMENTS.— 
(A) 
IN
GENERAL.—The 
Corporation 
shall— 
(i) allocate claims paid and expenses 
incurred among the workers’ compensation 
account, the automobile insurance account, 
or the other property/casualty account; and 
(ii) assess member insurers doing 
business in States without qualified asso-
ciations covering the types of risks insured 
that are licensed to sell property/casualty 
insurance separately for each account de-
scribed in clause (i) the amounts necessary 
to pay the obligations of the Corporation 
under section 1605 and the expenses of 
handling such claims. 
(B) AMOUNT.—The assessment established 
under subparagraph (A)(ii) shall equal an 
amount that bears the same ratio to the total 
amount of claims and expenses allocated to an 
account pursuant to subparagraph (A)(i) as the 
premiums received by such member insurer in 
States without qualified associations on the 
kind of insurance in the account during the cal-
endar year preceding the assessment bears to 
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295 
the premiums received by all assessed member 
insurers in States without qualified associations 
on the kind of insurance in the account during 
the year preceding the assessment. 
(C) DEPOSIT.—The assessments received 
pursuant to this paragraph shall be deposited in 
the workers’ compensation account, the auto-
mobile insurance account, or the other property/ 
casualty account, as appropriate. 
(4) LIFE AND ANNUITY ASSESSMENTS.— 
(A) 
IN
GENERAL.—The 
Corporation 
shall— 
(i) allocate benefits paid and expenses 
incurred among the life insurance account, 
the annuity account, and the health ac-
count; and 
(ii) assess member insurers doing 
business in States without qualified asso-
ciations that are licensed to sell life insur-
ance separately for each account described 
in clause (i) the amounts necessary to pay 
the obligations of the Corporation under 
section 1604 and the expenses of providing 
such benefits. 
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296 
(B) AMOUNT.—The assessment established 
under subparagraph (A)(ii) shall equal an 
amount that bears the same ratio to the total 
of benefits and expenses allocated to an account 
pursuant to subparagraph (A)(i) as the pre-
miums received by such member insurer in 
States without qualified associations on the 
kind of insurance in the account during the cal-
endar year preceding the assessment bears to 
the premiums received by all assessed member 
insurers in States without qualified associations 
on the kind of insurance in the account during 
the year preceding the assessment. 
(C) DEPOSIT.—The assessments received 
pursuant to this paragraph shall be deposited in 
the life insurance account, the annuity account, 
or the health account, as appropriate. 
(c) NOTICE AND IMPOSITION OF ASSESSMENTS.— 
(1) WRITTEN
NOTICE
REQUIRED.—The Cor-
poration shall provide each member insurer a writ-
ten notice of an assessment, and assessments shall 
be payable not earlier than 30 days after the date 
of receipt of such notice. 
(2) LATE PAYMENT.—Member insurers that fail 
to pay an assessment when due shall be subject to 
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297 
an interest charge on the assessment, as set by the 
Corporation. 
(3) ASSESSMENTS NOT IMPOSED UNTIL NEED-
ED.—The Corporation shall not impose an assess-
ment described in paragraph (3) or (4) of subsection 
(b) until such funds are needed. 
(4) MAXIMUM ASSESSMENT.— 
(A) IN GENERAL.—The Corporation may 
not assess a member insurer doing business in 
States without qualified associations in any 
year on any account in an amount greater than 
2 percent of the net direct written premiums of 
the insurer for the calendar year preceding the 
assessment on the kind of insurance in the ac-
count. 
(B) INSUFFICIENT
AMOUNT
IN
LIFE
IN-
SURANCE
ACCOUNT, ANNUITY
ACCOUNT, OR 
HEALTH ACCOUNT.— 
(i) INSUFFICIENT
AMOUNT
IN
LIFE 
INSURANCE
ACCOUNT.—If the maximum 
assessment in any year does not provide an 
amount sufficient to make all necessary 
payments from the life insurance account, 
the Corporation may assess the annuity ac-
count, the health account, or both, for the 
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298 
necessary additional amount, except that 
in each subsequent year, for so long as 
necessary, the Corporation shall assess up 
to the maximum on the life insurance ac-
count, in order to— 
(I) make all necessary payments 
from the life insurance account; and 
(II) reimburse the annuity ac-
count or the health account, or both, 
for the amounts assessed on behalf of 
the life insurance account. 
(ii) INSUFFICIENT AMOUNT IN ANNU-
ITY
ACCOUNT.—If the maximum assess-
ment in any year does not provide an 
amount sufficient to make all necessary 
payments from the annuity account, the 
Corporation may assess the life insurance 
account, the health account, or both, for 
the necessary additional amount, except 
that, in each subsequent year, for so long 
as necessary, the Corporation shall assess 
up to the maximum on the annuity ac-
count, in order to— 
(I) make all necessary payments 
from the annuity account; and 
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