50.54—Payment of Federal share of compensation.
(a) Timing.
Treasury will
promptly pay to an insurer the Federal share of
compensation due the insurer for its insured
losses. Payment shall be made in such installments
and on such conditions as determined by the
Treasury to be appropriate. Any overpayments by
Treasury of the Federal share of compensation will
be offset from future payments to the insurer or
returned to Treasury within 45 days.
(b) Payment process.
Payment of
the Federal share of compensation for insured
losses will be made to the insurer designated on
the Initial Notice of Loss required by § 50.52. An
insurer that requests payment of the Federal share
of compensation for insured losses must receive
payment through electronic funds transfer. The
insurer must establish either an account for
reimbursement as described in paragraph (c) of
this section (if the insurer only seeks
reimbursement) or a segregated account as
described in paragraph (d) of this section (if the
insurer seeks advance payments or a combination of
advance payments and reimbursement). Applicable
procedures will be posted at www.treasury.gov/trip or otherwise will be
made publicly available.
(c) Account for reimbursement.
(ACH)
shall designate an account for the receipt
of reimbursement of the Federal share of
compensation at an institution eligible to receive
payments through the Automated Clearing House
(ACH) network.
(d)
Segregated account for advance
payments. An insurer that seeks advance
payments of the Federal share of compensation as
certified according to § 50.53(b)(2)(i)(B) shall
establish an interest-bearing segregated account
into which Treasury will make advance payments as
well as reimbursements to the insurer.
(1)
Definition of segregated
account. For purposes of this section, a
segregated account is an interest-bearing separate
account established by an insurer at a financial
institution eligible to receive payments through
the ACH network. Such an account is limited to the
purposes of:
(iii)
Transferring payments to the insurer or
affiliated insurers for insured losses reported on
the bordereau as already paid.
(2) Remittance of interest.
All
interest earned on advance payments in the
segregated account must be remitted at least
quarterly to Treasury's Office of Financial
Management or as otherwise prescribed in
applicable procedures.
(e)
Denial or withholding of advance
payment. Treasury may deny or withhold advance
payments of the Federal share of compensation to
an insurer if Treasury determines that the insurer
has not properly disbursed previous advances of
the Federal share of compensation or otherwise has
not complied with the requirements for advance
payment as provided in this subpart.
(f) Affiliated group.
In the case
of an affiliated group of insurers, Treasury will
make payment of the Federal share of compensation
for the insured losses of the affiliated group to
the insurer designated in the Initial Notice of
Insured Loss to receive payment on behalf of the
affiliated group. The designated insurer receiving
payment from Treasury must distribute payment to
affiliated insurers in a manner that ensures that
each insurer in the affiliated group is
compensated for its share of insured losses,
taking into account a reasonable and fair
allocation of the group deductible among
affiliated insurers. Upon payment of the Federal
share of compensation to the designated insurer,
Treasury's payment obligation to the insurers in
the affiliated group with respect to any insured
losses covered on the applicable bordereau is
discharged to the extent of the payment.