Opinion ID: 2180088
Heading Depth: 1
Heading Rank: 3

Heading: PCIGC and Self-Insurers' Guaranty Fund

Text: Title 9 of the Insurance Article deals with insurance companies that are in financial difficulty. In subtitle 3 of that title (INS §§ 9-301 through 9-316), the Legislature created and provided for the operation of PCIGC. The corporation is created by § 9-304 as a private, nonprofit, nonstock corporation. That section requires each authorized insurer that writes any kind of direct insurance not specifically excluded from the ambit of the statute to be a member of PCIGC. [1] Subject to certain conditions and limitations set forth in § 9-306, PCIGC is obligated to pay covered claims, including the full amount of any covered claim arising out of a workers' compensation policy. In order to fulfill that obligation, PCIGC is required (1) to create separate accounts for title insurance, motor vehicle insurance, workers' compensation insurance, and other insurance to which the subtitle applies and (2) to assess each of its members in the proportion that the member's net direct written premiums for the preceding calendar year on the kinds of insurance covered by the appropriate account bears to the net direct written premiums of all member insurers for that year on those kinds of insurance. PCIGC, as noted, is liable only for the payment of a covered claim. That term is defined generally in INS § 9-301(d)(1) as including an insolvent insurer's unpaid obligation that arises out of a policy of the insolvent insurer. There is no dispute that Reliance qualifies as an insolvent insurer for purposes of that definition. Section 9-301(d)(2), however, provides that covered claim does not include an amount due to a reinsurer, insurer, insurance pool, or underwriting association, as a subrogation recovery or otherwise. (Emphasis added). In addition to PCIGC, the Legislature created, as part of title 25, subtitle 3 of the Insurance Article, dealing with workers' compensation self-insurance groups, the Self Insurers' Guaranty Fund (SIGF). Section 25-305 creates that Fund and provides for its administration by the Uninsured Employer's Fund established by LE § 10-304. The purpose of SIGF is to pay outstanding obligations of a self-insurance group that becomes insolvent. Each self-insurance group is required to pay an assessment to SIGF at the same level assessed against other workers' compensation carriers by [PCIGC] under Title 9, Subtitle 3 of this article, INS § 25-305(d), but, as the quid for that quo, self-insurance groups [are] not liable for payments to [PCIGC], § 25-305(a).