31A-27a-511 - Assessments.
31A-27a-511. Assessments.
(1) As soon as practicable but not more than four years from the day on which an orderof receivership of an insurer issuing assessable policies is entered, the receiver shall make areport to the receivership court setting forth:
(a) the reasonable value of the assets of the insurer;
(b) the insurer's probable total liabilities;
(c) the probable aggregate amount of the assessment necessary to pay all claims ofcreditors and expenses in full, including expenses of administration and costs of collecting theassessment; and
(d) a recommendation as to:
(i) whether or not an assessment should be made; and
(ii) what amount of assessment.
(2) (a) Upon the basis of the report provided in Subsection (1), including any supplementor amendment to the report, the receivership court may approve, solely on application by thereceiver, one or more assessments against all members of the insurer who are subject toassessment.
(b) An order approving an assessment under this Subsection (2) shall provideinstructions regarding:
(i) notice of the assessment;
(ii) deadlines for payment; and
(iii) other instructions to the receiver for collection of the assessment.
(3) Subject to any applicable legal limit on an ability to assess and with due regard givento assessments that cannot be collected economically, the aggregate assessment shall be for theamount by which the sum of the following exceeds the value of existing assets:
(a) probable liabilities;
(b) the expenses of administration; and
(c) the estimated cost of collection of the assessment.
(4) (a) After levy of an assessment under Subsection (2), the receiver shall petition thereceivership court for an order directing each member who has not paid the assessment pursuantto the levy to show cause why a judgment for the failure to pay the assessment should not beentered.
(b) At least 20 days before the return day of the order to show cause described inSubsection (4)(a), the receiver shall give notice of the order to show cause by:
(i) publication or by first-class mail to each member liable on the assessment mailed tothe member's last-known address as it appears on the insurer's records; or
(ii) such other method of notification as the receivership court may direct.
(c) Failure of the member or subscriber to receive the notice of the assessment or of theorder to show cause either within the time specified in the order or at all, is no defense in aproceeding to collect the assessment.
(5) If a member does not appear and serve verified objections upon the receiver on orbefore the return day of the order to show cause under Subsection (4):
(a) the receivership court shall make an order adjudging the member liable for the sumof:
(i) the amount of the assessment against the member pursuant to Subsection (4); and
(ii) the costs; and
(b) the receiver has a judgment against the member for the amount described inSubsection (5)(a).
(6) If on or before the return day in the order to show cause described in Subsection (4)the member appears and serves verified objections on the receiver, the receivership court may:
(a) (i) hear and determine the matter; or
(ii) appoint a referee to hear the matter; and
(b) make such order as the facts warrant.
(7) The receiver may enforce an order or collect a judgment under Subsection (5) by anylawful means.
(8) An assessment of a subscriber or member of an insurer made by the receiver is primafacie correct if it is pursuant to the order of receivership court:
(a) fixing the aggregate amount of the assessment against all members or subscribers;and
(b) approving the classification and formula made by the receiver under this section.
(9) A claim filed by an assessee who fails to pay an assessment, after the conclusion of alegal action by the assessee objecting to the assessment, is considered a late filed claim underSection 31A-27a-701.
Enacted by Chapter 309, 2007 General Session