§ 515b-5

515B.5 Duties and powers of the association. 1. The association shall:a. Be obligated to pay covered claims existing prior to the final order of liquidation and arising within thirty days after the final order of liquidation, or before the policy expirationdate if less than thirty days after the final order of liquidation, or before the insured replacesthe policy or causes its cancellation, if the insured does so within thirty days of the finalorder of liquidation. Such obligation shall be satisfied by paying to the claimant an amountas follows: (1) The full amount of a covered claim for benefits under a workers’ compensation insurance coverage. (2) An amount in excess of one hundred dollars but not exceeding ten thousand dollars per policy for a covered claim for the return of unearned premium. (3) An amount not exceeding the lesser of the policy limits or five hundred thousand dollars per claim for all covered claims for all damages arising out of any one or series ofaccidents, occurrences, or incidents, regardless of the number of persons making claims orthe number of applicable policies. b.

r all covered claims for all damages arising out of any one or series ofaccidents, occurrences, or incidents, regardless of the number of persons making claims orthe number of applicable policies. b. Be obligated to pay covered claims subject to a limitation as established by the rights, duties, and obligations under the policy of the insolvent insurer. However, the association isnot obligated to pay a claimant an amount in excess of the obligation under the policy of theinsolvent insurer, regardless of whether such claim is based on contract or tort. c. (1) Assess member insurers amounts necessary to pay the obligations of the association under paragraph 'a' of this subsection subsequent to an insolvency, the expensesof handling covered claims subsequent to an insolvency, the cost of examinations undersection 515B.10, and other expenses authorized by this chapter. The assessment of eachmember insurer shall be in the proportion that the net direct written premiums of themember insurer for the preceding calendar year bear to the net direct written premiumsof all member insurers for the preceding calendar year.

the proportion that the net direct written premiums of themember insurer for the preceding calendar year bear to the net direct written premiumsof all member insurers for the preceding calendar year. Each member insurer shall benotified of the assessment not later than thirty days before it is due. No member insurermay be assessed in any year an amount greater than two percent of that member insurer’snet direct written premiums for the preceding calendar year. If the maximum assessment,together with the other assets of the association, does not provide in any one year anamount sufficient to make all necessary payments, the funds available shall be proratedand the unpaid portion shall be paid as soon as funds become available. The associationmay exempt or defer, in whole or in part, the assessment of any member insurer if theassessment would cause the member insurer’s financial statement to reflect amounts ofcapital or surplus less than the minimum amounts required for a certificate of authorityby any jurisdiction in which the member insurer is authorized to transact insurance. Eachmember insurer serving as a servicing facility pursuant to this section may set off againstany

ate of authorityby any jurisdiction in which the member insurer is authorized to transact insurance. Eachmember insurer serving as a servicing facility pursuant to this section may set off againstany assessment, authorized payments made on covered claims and expenses incurred inthe payment of such claims by the member insurer. In addition, the association shall havethe authority to levy an administrative assessment of not more than fifty dollars per yearper member insurer on a non pro rata basis, which assessment shall be credited against anyfuture insolvency assessment. Such assessment shall be used to pay authorized expensesnot directly attributable to any particular insolvency or insolvent insurer. All overdue andunpaid assessments shall draw interest at the rate of seven percent per annum. (2) The association shall also have the right to pursue and retain for its own account salvage and subrogation recoverable on paid covered claim obligations. An obligation of theassociation to defend an insured shall cease upon the association’s payment or tender to anexcess insurer of an amount equal to the lesser of the association’s covered claim obligationor the applicable policy limits.

fend an insured shall cease upon the association’s payment or tender to anexcess insurer of an amount equal to the lesser of the association’s covered claim obligationor the applicable policy limits. d. Investigate claims brought against the association and adjust, compromise, settle, and pay covered claims to the extent of the association’s obligations on covered claims anddeny all other claims. The association may review settlements, releases, and judgments towhich the insolvent insurer or its insureds were parties to determine the extent to whichsettlements, releases, and judgments may properly be contested, and, to that end, any Sat Dec 23 00:48:12 2023 Iowa Code 2024, Section 515B.5 (18, 1) §515B.5, INSURANCE GUARANTY ASSOCIATION 2 uncontested or default judgment against the insolvent insurer or its insured shall not bebinding on the association. The association shall have the right to appoint or substitute legalcounsel retained to defend insureds on covered claims. e. Notify such persons as the commissioner directs under section 515B.7, subsection 2, paragraph 'a'. f. Process claims through its employees or through one or more member insurers or other persons designated as

ch persons as the commissioner directs under section 515B.7, subsection 2, paragraph 'a'. f. Process claims through its employees or through one or more member insurers or other persons designated as servicing facilities. Designation of a servicing facility is subject to theapproval 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 pay the other expenses of the association authorized by this chapter. 2. The association may:a. Appear in, defend, and appeal any action on a claim brought against the association.b. Employ or retain persons necessary to handle claims and perform other duties of the association. c. Borrow funds necessary to effect the purposes of this chapter in accord with the plan of operation. d. Sue or be sued.e. Negotiate and become a party to contracts necessary to carry out the purpose of this chapter. f. Perform such other acts necessary or proper to effectuate the purposes of this chapter. g.

be sued.e. Negotiate and become a party to contracts necessary to carry out the purpose of this chapter. f. Perform such other acts necessary or proper to effectuate the purposes of this chapter. g. The board of directors, in its discretion, may from time to time refund excess amounts to member insurers that are not needed for current or projected liabilities of a particularinsolvency. The amount of each refund is equal to the net direct written premiums of themember insurer for the preceding calendar year divided by the net written premiums ofall member insurers for the preceding calendar year, multiplied by the total amount to berefunded to all members. Any assessments or refunds of any member insurer in amountsnot to exceed twenty-five dollars may, at the discretion of the board of directors, be waived. h. Request that all future payments of workers’ compensation weekly benefits, medical expenses, or other payments under chapter 10A, subchapter III, chapter 85, 85A, 85B, or 87be commuted to a present lump sum and upon the payment of which, either to the claimant orto a licensed insurer for purchase of an annuity or other periodic payment plan for the benefitof the claimant,

commuted to a present lump sum and upon the payment of which, either to the claimant orto a licensed insurer for purchase of an annuity or other periodic payment plan for the benefitof the claimant, the employer and the association shall be discharged from all further liabilityfor the workers’ compensation claim. Notwithstanding the provisions of section 85.45, anyfuture payment of medical expenses, weekly compensation benefits, or other payment bythe association under this chapter pursuant to chapter 10A, subchapter III, chapter 85, 85A,85B, or 87, is deemed an undue expense, hardship, or inconvenience upon the employer forpurposes of a full commutation pursuant to section 85.45, subsection 1, paragraph 'b', and theworkers’ compensation commissioner shall fix the lump sum of the probable future medicalexpenses and weekly compensation benefits capitalized at their present value upon the basisof interest at the rate provided in section 535.3 for court judgments and decrees. [C71, 73, 75, 77, 79, 81, §515B.5; 82 Acts, ch 1051, §2]86 Acts, ch 1184, §6; 88 Acts, ch 1112, §507; 91 Acts, ch 26, §44; 92 Acts, ch 1162, §40, 41; 97 Acts, ch 186, §15, 16; 98 Acts, ch 1061, §11; 2001 Acts,

75, 77, 79, 81, §515B.5; 82 Acts, ch 1051, §2]86 Acts, ch 1184, §6; 88 Acts, ch 1112, §507; 91 Acts, ch 26, §44; 92 Acts, ch 1162, §40, 41; 97 Acts, ch 186, §15, 16; 98 Acts, ch 1061, §11; 2001 Acts, ch 69, §32; 2002 Acts, ch 1111, §20,21; 2008 Acts, ch 1032, §200; 2010 Acts, ch 1063, §26; 2012 Acts, ch 1023, §157; 2023 Acts, ch19, §2024 Referred to in §515B.6, 515B.9Subsection 2, paragraph h amended Sat Dec 23 00:48:12 2023 Iowa Code 2024, Section 515B.5 (18, 1)