262 
qualified associations are located and, in special cir-
cumstances, to persons who are not residents of such 
States. In order to avoid duplicate coverage, if a per-
son who would otherwise receive coverage under this 
title is provided coverage under the laws of any 
State other than the State in which the nonqualified 
association is located, the person shall not be pro-
vided coverage under this title. In determining the 
application of the provisions of this paragraph in sit-
uations where a person could be covered by the asso-
ciation of more than 1 State, whether as a policy 
owner, payee, beneficiary, or assignee, this title shall 
be construed in conjunction with the laws of such 
States to result in coverage by only 1 association or 
by the Corporation. 
(c) INSURANCE POLICIES COVERED AND COVERAGE 
LIMITS.— 
(1) REGULATION.—The Commissioner shall es-
tablish, by regulation, the lines of insurance covered, 
the scope of coverage, defenses, exclusions, and the 
coverage limits on benefits for policyholders. 
(2) NAIC MODEL.—The regulations described in 
paragraph (1) shall be substantially similar to the 
‘‘Life and Health Insurance Guaranty Association 
Model Act’’ of the NAIC in effect on May 24, 2007, 
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subject to the exclusions and benefits described in 
paragraphs (3) and (4), respectively. 
(3) EXCLUSIONS
FROM
COVERAGE.—There 
shall be excluded from coverage under this title— 
(A) any portion of a policy or contract not 
guaranteed by the insurer, or under which the 
risk is borne by the policy or contract owner; 
(B) any policy or contract of reinsurance, 
unless assumption certificates have been issued 
pursuant to the reinsurance policy or contract; 
(C) any portion of a policy or contract, to 
the extent that the rate of interest on which it 
is based— 
(i) averaged over the period of 4 years 
prior to the date on which the Corporation 
becomes obligated with respect to the pol-
icy or contract, exceeds a rate of interest 
determined by subtracting 2 percentage 
points from the average corporate bond 
yield, as determined by the Commissioner, 
averaged for that same 4-year period or for 
such lesser period, if the policy or contract 
was issued less than 4 years before the 
Corporation became so obligated; and 
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(ii) on and after the date on which the 
Corporation becomes obligated with respect 
to the policy or contract, exceeds the rate 
of interest determined by subtracting 3 
percentage points from the average cor-
porate bond yield, as most recently avail-
able, as determined by the Commissioner; 
(D) any portion of a policy or contract 
issued to a plan or program of an employer, as-
sociation, or other person to provide life, health, 
or annuity benefits to its employees, members, 
or others, to the extent that the plan or pro-
gram is self-funded or uninsured, including ben-
efits payable by an employer, association, or 
other person under— 
(i) a multiple employer welfare ar-
rangement, as defined in section 514 of the 
Employee Retirement Income Security Act 
of 1974; 
(ii) a minimum premium group insur-
ance plan; 
(iii) a stop-loss group insurance plan; 
or 
(iv) an administrative services only 
contract; 
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(E) any portion of a policy or contract, to 
the extent that it provides for— 
(i) dividends or experience rating 
credits; 
(ii) voting rights; or 
(iii) payment of any fees or allowances 
to any person, including the policy or con-
tract owner, in connection with the service 
to or administration of the policy or con-
tract; 
(F) any portion of a policy or contract, to 
the extent that the assessments required by sec-
tion 1608 with respect to the policy or contract 
are preempted by Federal or State law; 
(G) any obligation that does not arise 
under the express written terms of the policy or 
contract issued by the insurer to the contract 
owner or policy owner, including— 
(i) claims based on marketing mate-
rials; 
(ii) claims based on side letters, rid-
ers, or other documents that were issued 
by the insurer without meeting applicable 
policy form filing or approval require-
ments; 
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(iii) misrepresentations of or regard-
ing policy benefits; 
(iv) extra-contractual claims; or 
(v) a claim for penalties or consequen-
tial or incidental damages; 
(H) any contractual agreement that estab-
lishes the obligations of the member insurer to 
provide a book value accounting guaranty for 
defined contribution benefit plan participants 
by reference to a portfolio of assets that is 
owned by the benefit plan or its trustee, which 
in each case is not an affiliate of the member 
insurer; 
(I) any unallocated annuity contract; and 
(J) any funding agreement. 
(4) COVERAGE BENEFITS.—The benefits pro-
vided under this title shall in no event exceed the 
lesser of— 
(A) the contractual obligations for which 
the insurer is liable, or would have been liable 
if it were not an impaired or insolvent insurer; 
or 
(B) with respect to— 
(i) 1 life, regardless of the number of 
insurance policies— 
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267 
(I) $300,000 in life insurance 
death benefits, but not more than 
$100,000 in net cash surrender and 
net cash withdrawal values for life in-
surance; 
(II) in health insurance bene-
fits— 
(aa) $100,000 for long-term 
care; or 
(bb) $300,000 for disability 
insurance; or 
(III) $100,000 in the present 
value of annuity benefits, including 
net cash surrender and net cash with-
drawal values; and 
(ii) each payee of a structured settle-
ment annuity (or beneficiary or bene-
ficiaries 
of 
the 
payee 
if 
deceased), 
$100,000 in present value annuity bene-
fits, in the aggregate, including net cash 
surrender and net cash withdrawal values, 
if any, except that, in no event shall bene-
fits exceed— 
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(I) an aggregate of $300,000 in 
benefits with respect to any 1 life 
under clause (i) and this clause; or 
(II) with respect to 1 policy 
owner of multiple nongroup insurance 
policies of life insurance, or 1 policy 
owner of 1 or more group insurance 
policies of life insurance insuring the 
lives of multiple insureds, where the 
policy owner (or any benefit plan, 
trust, or other entity sponsored or 
controlled by the policy owner) is also 
the beneficiary, whether the policy 
owner is an individual, firm, corpora-
tion, or other person, and whether the 
individuals insured are officers, man-
agers, employees, or other individuals, 
more than $5,000,000 in benefits, re-
gardless of the number of such poli-
cies held by the policy owner. 
(5) RULE OF CONSTRUCTION.—The limitations 
set forth in this subsection are limitations on bene-
fits under this title before taking into account either 
the subrogation and assignment rights or the extent 
to which those benefits could be provided out of the 
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assets of the impaired or insolvent insurer attrib-
utable to covered policies. 
(6) USE OF ASSETS.—The obligations for bene-
fits under this title may be met by the use of assets 
attributable to covered policies or reimbursed to the 
Corporation pursuant to the subrogation and assign-
ment rights in section 1607. 
(d) OTHER EXCLUSIONS.—The Corporation shall not 
be required to guarantee, assume, reinsure, or perform or 
cause to be guaranteed, assumed, reinsured, or performed, 
the contractual obligations of the insolvent or impaired in-
surer under a covered policy that do not materially affect 
the economic values or economic benefits of the covered 
policy. 
SEC. 1605. CLAIMS COVERED FOR POLICYHOLDERS OF NA-
TIONAL PROPERTY/CASUALTY INSURERS. 
(a) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
(1) ASSOCIATION.—The term ‘‘Association’’ 
means any property/casualty insurance guaranty as-
sociation created under the laws of the relevant 
State, no matter how denominated, which performs 
the role of an association or fund paying certain 
property/casualty claims made under policies of an 
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insolvent insurer to or on behalf of policyholders re-
siding in the State. 
(2) CLAIMANT.—The term ‘‘claimant’’ means 
any insured making a first party claim or any per-
son instituting a liability claim, except that no per-
son who is an affiliate of the insolvent insurer may 
be a claimant. 
(3) COVERED
CLAIM.—The term ‘‘covered 
claim’’— 
(A) means an unpaid claim, including one 
for unearned premiums, submitted by a claim-
ant, which arises out of and is within the cov-
erage and is subject to the applicable limits of 
an insurance policy to which this title applies 
issued by a member insurer, if— 
(i) such member insurer becomes an 
insolvent insurer after the effective date of 
this title; and 
(ii) either— 
(I) the claimant or insured is a 
resident of a State that does not have 
a qualified association covering the 
type of risk insured at the time of the 
insured event (for which purpose, in 
the case of an entity other than an in-
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271 
dividual, the residence of a claimant, 
insured, or policyholder is the State in 
which its principal place of business is 
located at the time of the insured 
event); or 
(II) the claim is a first party 
claim for damage to property with a 
permanent location in the State; and 
(B) does not include— 
(i) any amount awarded as punitive or 
exemplary damages; 
(ii) any amount sought as a return of 
premium under any retrospective rating 
plan; 
(iii) any amount due any reinsurer, 
insurer, insurance pool, underwriting asso-
ciation, health maintenance organization, 
hospital 
plan 
corporation, 
professional 
health service corporation, or self-insurer 
as subrogation recoveries, reinsurance re-
coveries, contribution, indemnification, or 
otherwise, and no such claim for any 
amount due any reinsurer, insurer, insur-
ance pool, underwriting association, health 
maintenance organization, hospital plan 
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272 
corporation, or self-insurer may be as-
serted against a person insured under a 
policy issued by an insolvent insurer, other 
than to the extent that such claim exceeds 
the obligation limitations of the Corpora-
tion set forth in this Act; 
(iv) any first party claim by an in-
sured 
whose 
net 
worth 
exceeds 
$25,000,000 on December 31 of the year 
prior to the year in which the member in-
surer becomes an insolvent insurer (for 
which purpose, the net worth of the in-
sured on that date shall be deemed to in-
clude the aggregate net worth of the in-
sured and all of its affiliates and subsidi-
aries, as calculated on a consolidated 
basis); or 
(v) any first party claim by an insured 
which is an affiliate of the insolvent in-
surer. 
(4) INSOLVENT INSURER.—The term ‘‘insolvent 
insurer’’ means an insurer with a line of business 
covered by the Corporation and doing business in a 
State without a qualified association, covering the 
type of risk insured, and against whom a final order 
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bajohnson on PROD1PC69 with BILLS
273 
of liquidation with a finding of insolvency has been 
issued pursuant to title V and the regulations pro-
mulgated thereunder. 
(b) IN GENERAL.—If a national property and cas-
ualty insurer or a State property and casualty insurer is 
doing business in a State that does not have a qualified 
association for the line of insurance offered by such in-
surer in such State (and if such line of insurance is cov-
ered by the Corporation), and such insurer is placed into 
receivership for purposes of liquidation, the Corporation 
shall provide benefits as specified in this section. 
(c) INSURANCE LINES INCLUDED.—This title shall 
provide coverage for covered claims on all lines of direct 
insurance (other than those specified in subsection (d))— 
(1) existing prior to the order of liquidation; 
(2) arising not later than 30 days after the 
order of liquidation; 
(3) arising before the insurance policy expira-
tion date, if earlier than 30 days after the order or 
liquidation; or 
(4) arising before the insured replaces the in-
surance policy or causes its cancellation, if the in-
sured does so not later than 30 days after the order 
of liquidation. 
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274 
(d) INSURANCE LINES EXCLUDED.—This title shall 
not provide coverage on claims for— 
(1) life, annuity, health, or disability insurance 
(except as provided in section 1604); 
(2) mortgage guaranty, financial guaranty, or 
other forms of insurance offering protection against 
investment risks; 
(3) fidelity or surety bonds, or any other bond-
ing obligations; 
(4) credit insurance, vendors single interest in-
surance, or collateral protection insurance or any 
similar insurance protecting the interests of the 
creditor arising out of a creditor-debtor transaction; 
(5) insurance of warranties or service contracts 
including insurance that provides for the repair, re-
placement, or service of goods or property, indem-
nification for repair, replacement, or service for the 
operational or structural failure of the goods or 
property due to a defect in materials, workmanship, 
or normal wear and tear, or provides reimbursement 
for the liability incurred by the issuer of agreements 
or service contracts that provide such benefits; 
(6) title insurance; 
(7) ocean marine insurance; 
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(8) any transaction or combination of trans-
actions between a person (including affiliates of such 
person) and an insurer (including affiliates of such 
insurer) which involves the transfer of investment or 
credit risk unaccompanied by transfer of insurance 
risk; or 
(9) any insurance provided by or guaranteed by 
any State or the Federal Government. 
(e) COVERAGE LIMITATIONS.— 
(1) IN GENERAL.—The obligation to a claimant 
under this section shall be satisfied by paying to the 
claimant— 
(A) the full amount of a covered claim for 
the benefits under a workers’ compensation in-
surance coverage; 
(B) an amount not exceeding $10,000 per 
policy for a covered claim for return of un-
earned premiums, less a deductible of $100; 
and 
(C) an amount not exceeding $300,000 per 
claim for all other covered claims, except that 
for purposes of such limitation, all claims of 
any kind whatsoever arising out of, or related 
to, bodily injury or death to any 1 person shall 
constitute a single claim, regardless of the num-
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276 
ber of insurance policies issued by the insolvent 
insurer, the number of claims made, or the 
number of claimants. 
(2) LIMITATION.—In no event shall a claimant 
be entitled to an amount in excess of the obligation 
of the insolvent insurer under the policy or coverage 
from which the claim arises. 
(3) EXCLUSIONS.—Notwithstanding any other 
provisions of this title, for purposes of this sub-
section, a covered claim shall not include— 
(A) a claim filed more than 18 months 
after the entry of the order of liquidation or the 
final date set for the filing of claims against the 
liquidator or receiver of the insolvent insurer 
pursuant to title V and the regulations promul-
gated thereunder, whichever date occurs first; 
or 
(B) any claim filed with the Corporation or 
the receiver for losses incurred but not reported 
under the policy of the insured. 
(f) EXHAUSTION OF OTHER COVERAGE.— 
(1) IN GENERAL.—Any person having a claim 
under an insurance policy, whether or not it is a pol-
icy issued by a member insurer, and the claim under 
such other policy arises from the same facts, injury, 
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bajohnson on PROD1PC69 with BILLS
277 
or loss that gave rise to a covered claim against the 
Corporation, shall be required first to exhaust all 
coverage provided by any such policy. 
(2) REDUCTIONS.—Any amount payable on a 
covered claim under this title shall be reduced by the 
full applicable limits stated in such other insurance 
policy, and the Corporation shall receive a full credit 
for such stated limits, or, where there are no appli-
cable stated limits, the claim shall be reduced by the 
total recovery. 
(3) LIMITATION.—Notwithstanding paragraphs 
(1) and (2)— 
(A) no person shall be required to exhaust 
any right under the policy of an insolvent in-
surer; 
(B) a claim under a policy providing liabil-
ity coverage to a person who may be jointly and 
severally liable with or a joint tortfeasor with 
the person covered under the policy of the insol-
vent insurer that gives rise to the covered claim 
shall be considered to be a claim arising from 
the same facts, injury, or loss that gave rise to 
the covered claim against the Corporation; 
(C) a claim under an insurance policy shall 
also include, for purposes of this section— 
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278 
(i) a claim against a health mainte-
nance organization, a hospital plan cor-
poration, or a professional health service 
corporation; and 
(ii) any amount payable by or on be-
half of a self-insurer; and 
(D) to the extent that the obligation of the 
Corporation is reduced by the application of 
this section, the liability of the person insured 
by the policy of the insolvent insurer for the 
claim shall be reduced in the same amount. 
(4) ORDER OF RECOVERY.—Any person having 
a claim which may be recovered under more than 1 
qualified association shall seek recovery first, from 
the qualified association of the place of residence of 
the insured (or the Corporation, if the place of resi-
dence is a State that does not have a qualified asso-
ciation), except that if it is a first party claim for 
damage to property with a permanent location, the 
person shall seek recovery first from the qualified 
association (or the Corporation, if applicable) of the 
location of the property, and if it is a workers’ com-
pensation claim, the person shall seek recovery first 
from the qualified association (or the Corporation, if 
applicable) of the residence of the claimant. Any re-
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bajohnson on PROD1PC69 with BILLS
279 
covery under this Act shall be reduced by the 
amount of recovery from any other insurance guar-
anty association or its equivalent. 
(g) RIGHT
TO RECOVER.—The Corporation shall 
have the right to recover all amounts paid the Corporation 
on behalf of a person, whether for indemnity, defense, or 
otherwise, in the case of— 
(1) any insured whose net worth on December 
31 of the year immediately preceding the date on 
which the insurer becomes an insolvent insurer ex-
ceeds $25,000,000 (and for such purpose, the net 
worth of an insured on such date shall be deemed 
to include the aggregate net worth of the insured 
and all of its subsidiaries and affiliates, as calculated 
on a consolidated basis); and 
(2) any person who is an affiliate of the insol-
vent insurer. 
(h) PAYMENT OF CLAIMS.—Payment of claims under 
this title by the Corporation shall be made from the appro-
priate property and casualty account established pursuant 
to section 1603. 
SEC. 1606. POWERS AND DUTIES OF THE CORPORATION. 
(a) POWERS AND DUTIES RELATED TO CERTAIN NA-
TIONAL LIFE INSURERS AND STATE LIFE INSURERS.— 
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(1) NATIONAL LIFE INSURERS AND STATE LIFE 
INSURERS WHO ARE MEMBER INSURERS SUBJECT TO 
REHABILITATION.—Subject to the provisions of this 
title, if a national life insurer or a State life insurer 
is a member insurer placed into receivership for pur-
poses of rehabilitation, the Corporation may, in its 
discretion, and subject to any conditions imposed by 
the Corporation that do not impair the contractual 
obligations of the national life insurer or State life 
insurer, and that are approved by the Commis-
sioner— 
(A) guarantee, assume, or reinsure, or 
cause to be guaranteed, assumed, or reinsured, 
any or all of the insurance policies of the na-
tional life insurer or State life insurer; or 
(B) provide such monies, pledges, loans, 
notes, guarantees, or other means as are proper 
to effectuate subparagraph (A) and assure pay-
ment of the contractual obligations of the na-
tional life insurer or State life insurer, pending 
action under subparagraph (A). 
(2) NATIONAL LIFE INSURERS AND STATE LIFE 
INSURERS WHO ARE MEMBER INSURERS SUBJECT TO 
LIQUIDATION.— 
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(A) IN GENERAL.—Subject to the provi-
sions of this title, if a national life insurer or 
a State life insurer is a member insurer placed 
into receivership for purposes of liquidation, the 
Corporation shall, in its discretion, take either 
the actions specified in subparagraph (B) or the 
actions specified in subparagraph (C). 
(B) ASSUMPTION OF OBLIGATIONS OF NA-
TIONAL LIFE INSURER OR STATE LIFE INSURER 
WHO
IS
A
MEMBER
INSURER.—The Corpora-
tion— 
(i) shall— 
(I) guarantee, assume, or rein-
sure, or cause to be guaranteed, as-
sumed, or reinsured, the insurance 
policies of the national life insurer or 
State life insurer; or 
(II) assure payment of the con-
tractual obligations of the national life 
insurer or State life insurer; and 
(ii) shall provide monies, pledges, 
loans, notes, guarantees, or other means 
reasonably necessary to discharge the du-
ties imposed by this section. 
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(C) PROVISION OF BENEFITS TO POLICY-
HOLDERS.—The Corporation— 
(i) with respect to life insurance poli-
cies and annuities, shall assure payment of 
benefits for premiums identical to the pre-
miums and benefits (except for terms of 
conversion and renewability) that would 
have been payable under the insurance 
policies of the national life insurer or State 
life insurer who is a member insurer, for 
claims incurred— 
(I) with respect to group insur-
ance policies, not later than the ear-
lier of the next renewal date under 
those insurance policies or 45 days, 
but not less than 30 days, after the 
date on which the Corporation be-
comes obligated under this section 
with respect to such policies; and 
(II) with respect to nongroup in-
surance policies, not later than the 
earlier of the next renewal date (if 
any) under the insurance policies or 1 
year, but not less than 30 days, from 
the date on which the Corporation be-
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283 
comes obligated under this section 
with respect to such policies; 
(ii) shall make diligent efforts to pro-
vide all known insureds or annuitants (for 
nongroup insurance policies), or group pol-
icyholders with respect to group insurance 
policies, 30 days advance notice of the ter-
mination (pursuant to clause (i)) of the 
benefits provided; 
(iii) with respect to nongroup insur-
ance policies covered by this title, shall 
make available to each known insured or 
annuitant and to each individual formerly 
insured or formerly an annuitant under a 
group policy who is not eligible for replace-
ment group coverage, substitute coverage 
on an individual basis in accordance with 
the provisions of clause (iv), if the insured 
or annuitants had a right under law or the 
terminated policy or annuity to convert 
coverage to individual coverage or to con-
tinue an individual policy or annuity in 
force until a specified age or for a specified 
time, during which the national life insurer 
or State life insurer had no right unilater-
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bajohnson on PROD1PC69 with BILLS
284 
ally to make changes in any provision of 
the policy or had a right only to make 
changes in premium by class; 
(iv) in providing the substitute cov-
erage required under clause (iii), may offer 
either to reissue the terminated coverage 
or to issue an alternative policy, which al-
ternative or reissued insurance policies— 
(I) shall be offered without re-
quiring evidence of insurability; 
(II) may not provide for any 
waiting period or exclusion that would 
not have applied under the terminated 
policy; and 
(III) may be reinsured by the 
Corporation; and 
(v) shall obtain the approval of the 
Commissioner of all alternative policies 
adopted or issued by the Corporation 
under this paragraph. 
(D) TERMINATION OF BENEFITS.—Bene-
fits under this title with respect to coverage 
under any policy of an insolvent national life in-
surer or under any reissued or alternative policy 
shall cease on the date on which the coverage 
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285 
or policy is replaced by another similar policy 
by the policyholder, the insured, or the Cor-
poration. 
(3) TREATMENT OF PREMIUMS.— 
(A) NONPAYMENT
OF
PREMIUMS.—The 
nonpayment of premiums within 31 days after 
the date required under the terms of any guar-
anteed, assumed, alternative, or reissued policy 
or substitute coverage provided pursuant to 
paragraphs (1) or (2) shall terminate benefits 
under this title with respect to the policy, ex-
cept with respect to any claims incurred or any 
net cash surrender value that may be due in ac-
cordance with the provisions of this title. 
(B) PREMIUMS DUE AFTER LIQUIDATION 
INITIATED.—Premiums due for coverage under 
covered policies after the Commissioner has ini-
tiated the liquidation of a national life insurer 
or a State life insurer who is a member insurer 
shall belong to and be payable at the direction 
of the Corporation, and the Corporation shall 
be liable for unearned premiums due to the pol-
icyholders under the covered policies. 
(4) PERMANENT AND TEMPORARY LIENS.—In 
carrying out the duties under paragraph (2), the 
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286 
Corporation may, subject to the approval of the 
Commissioner— 
(A) impose permanent policy liens in con-
nection with a guarantee, assumption, or rein-
surance contract, if the Corporation finds that 
the amounts which can be assessed under this 
title are less than the amounts needed to assure 
full and prompt performance of the protections 
provided under this title, or that the economic 
or financial conditions as they affect the insur-
ance industry are sufficiently adverse to render 
the imposition of such permanent policy liens to 
be in the public interest; or 
(B) impose temporary moratoriums or 
liens on payments of cash values and policy 
loans, or any other right to withdraw funds on 
payments of cash values and policy loans, or 
any other right to withdraw funds held in con-
junction with insurance policies, in addition to 
any contractual provisions for deferral of cash 
or policy loan value. 
(5) INDEXED INSURANCE POLICIES.— 
(A) IN GENERAL.—In carrying out its du-
ties in connection with paragraphs (1) or (2), 
the Corporation may, subject to the approval of 
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the Commissioner, issue substitute coverage for 
an insurance policy that provides an interest 
rate, crediting rate, or similar factor deter-
mined by use of an index or other external ref-
erence stated in the insurance policy employed 
in calculating returns or changes in value by 
issuing an alternative insurance policy in ac-
cordance with subparagraph (B). 
(B) APPLICABILITY.—Subparagraph (A) 
shall apply in any case in which— 
(i) in lieu of the index or other exter-
nal reference provided for in the original 
insurance policy, the alternative insurance 
policy provides for— 
(I) a fixed interest rate; 
(II) payment of dividends with 
minimum guarantees; or 
(III) a different method for cal-
culating interest or changes in value; 
(ii) there is no requirement for evi-
dence of insurability, waiting period, or 
other exclusion that would not have applied 
under the replaced insurance policy; and 
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bajohnson on PROD1PC69 with BILLS
288 
(iii) the alternative insurance policy is 
substantially similar to the replaced insur-
ance policy in all other material terms. 
(b) POWERS AND DUTIES RELATED TO NATIONAL 
PROPERTY/CASUALTY INSURERS AND STATE PROPERTY/ 
CASUALTY INSURERS WHO ARE MEMBER INSURERS 
WITH RESPECT TO COVERED CLAIMS.— 
(1) IN GENERAL.—Subject to the terms of this 
title, when a national property/casualty insurer or a 
State property/casualty insurer is a member insurer 
placed into receivership for purposes of liquidation, 
the Corporation shall exercise the powers and duties 
specified in this subsection. 
(2) ASSUMPTION OF OBLIGATIONS.—The Cor-
poration shall be deemed the insurer to the extent 
of its obligation on covered claims and to that ex-
tent, shall have all rights, duties, and obligations of 
the insolvent national property/casualty insurer or 
State property/casualty insurer, as if such insurer 
had not become insolvent, including the right to pur-
sue and retain salvage and subrogation recoverable 
on covered claims obligations to the extent paid by 
the Corporation. 
(3) 
INVESTIGATION
AND
PAYMENT
OF 
CLAIMS.—The Corporation shall investigate claims 
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bajohnson on PROD1PC69 with BILLS
289 
brought against the Corporation and adjust, com-
promise, settle, and pay covered claims, to the extent 
of the obligations of the Corporation. The Corpora-
tion shall pay claims in any order that it determines 
reasonable, including the payment of claims as they 
are received from the claimants or in groups or cat-
egories of claims. The Corporation may review set-
tlements, releases, and adjustments to which the in-
solvent national property/casualty insurer or State 
property/casualty insurer or its insured were parties 
to determine the extent to which the settlements, re-
leases, and judgments may be properly contested. 
The Corporation shall have the right to appoint or 
substitute and to direct legal counsel retained under 
liability insurance policies for the defense of covered 
claims. 
(c) OTHER CORPORATION POWERS.—In addition to 
the rights and powers provided elsewhere in this title, the 
Corporation may— 
(1) enter into such contracts as are necessary 
or proper to carry out the provisions and purposes 
of this title; 
(2) sue or be sued, including taking any legal 
actions necessary or proper to recover any unpaid 
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