50.93—Application of pro rata share.
An insurer shall apply the PRLP to determine
the pro rata share of each insured
loss to be paid by the insurer on all insured
losses where there is not an agreement on a
complete and final settlement as evidenced by a
signed settlement agreement or other means
reviewable by a third party as of the effective
date established by Treasury. Payments based on
the application of the PRLP and determination of
the pro rata share satisfy the
insurer's liability for payment under the Program.
Application of the PRLP and the determination of
the pro rata share are the exclusive
means for calculating the amount of insured losses
for Program purposes. The pro rata
share is subject to the following:
(a)
The pro rata share is
determined based on the estimated or actual final
claim settlement amount that would otherwise be
paid.
(b) All policies.
If partial
payments have already been made as of the
effective date of the PRLP, then the pro
rata share for that loss is the greater of the
amount already paid as of the effective date of
the PRLP or the amount computed by applying the
PRLP to the estimated or actual final claim
settlement amount that would otherwise be
paid.
(c)
Certain workers' compensation
insurance policies. If an insurer's payments
under a workers' compensation policy cumulatively
exceed the amount computed by applying the PRLP to
the estimated or actual final claim settlement
amount that would otherwise be paid because such
estimated or actual final settlement amount is
reduced from a previous estimate, then the insurer
may request a review and adjustment by Treasury in
the calculation of the Federal share of
compensation. In requesting such a review, the
insurer must submit information to supplement its
Certification of Loss demonstrating a reasonable
estimate invalidated by unexpected conditions
differing from prior assumptions including, but
not limited to, an explanation and the basis for
the prior assumptions.
(d)
If an insurer has not yet made payments in
excess of its insurer deductible, the rules in
this paragraph apply.
(1)
If the insurer estimates that it will exceed its insurer deductible making
payments based on the application of the PRLP to
its insured losses, then the insurer shall apply
the PRLP as of the effective date specified in §
50.92(b).
(2)
(i)
If the insurer estimates that it will not exceed its insurer deductible
making payments based on the application of the
PRLP to its insured losses, then the insurer may
make payments on the same basis as prior to the
effective date of the PRLP. The insurer may also
make payments on the basis of applying some other
pro rata amount it determines that
is greater than the PRLP, where the insurer
estimates that application of such other pro rata amount will result in it not
exceeding its insurer deductible. The insurer
remains liable for losses in accordance with §
50.95(c).
(ii)
If an insurer estimates that it will not
exceed its insurer deductible and has made
payments on the basis provided in (2)(i), but
thereafter reaches its insurer deductible, then
the insurer shall apply the PRLP to any remaining
insured losses. When such an insurer submits a
claim for the Federal share of compensation, the
amount of the insurer's losses will be deemed to
be the amount it would have paid if it had applied
the PRLP as of the effective date, and the Federal
share of compensation will be calculated on that
amount. However, an insurer may request an
exception if it can demonstrate that its estimate
was invalidated as a result of insured losses from
a subsequent act of terrorism.