44-2403. Terms, defined.

918 words·~4 min read·/ne/chapter-44/44-2403

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

As used in the Nebraska Property and Liability Insurance Guaranty Association Act, unless the context otherwise requires:

(1)Account means any one of the three accounts created by section 44-2404 ;

(2)Director means the Director of Insurance or duly authorized representative;

(3)Association means the Nebraska Property and Liability Insurance Guaranty Association created by section 44-2404 ;

(4)(a) Covered claim means an unpaid claim as provided in the Nebraska Insurers Supervision, Rehabilitation, and Liquidation Act which arises out of, and is within the coverage of, an insurance policy to which the Nebraska Property and Liability Insurance Guaranty Association Act applies issued by a member insurer that becomes insolvent after May 26, 1971, and

(i)the claimant or insured is a resident of this state at the time of the insured event or

(ii)the property from which the claim arises is permanently located in this state. For entities other than an individual, the residence of a claimant, insured, or policyholder is the state in which the principal place of business is located at the time of the insured event. Covered claim includes the policyholder's unearned premiums paid by the policyholder on an insurance policy to which the act applies issued by a member insurer that becomes insolvent on or after July 9, 1988. Nothing in this section shall be construed to supersede, abrogate, or limit the common-law ownership of accounts receivable for earned premium, unearned premium, or unearned commission;

(b)Covered claim includes claim obligations that arise through the issuance of an insurance policy by a member insurer, which are later allocated, transferred, merged into, novated, assumed by, or otherwise made the sole responsibility of a member or nonmember insurer, if:

(i)The original member insurer has no remaining obligations on the policy after the transfer;

(ii)a final order of liquidation with a finding of insolvency is entered against the insurer that assumes the member's coverage obligations by a court of competent jurisdiction in the insurer's state of domicile;

(iii)the claim would have been a covered claim, as defined in subdivision (4)(a) of this section, if the claim had remained the responsibility of the original member insurer and the order of liquidation had been entered against the original member insurer, with the same claim submission date and liquidation date; and

(iv)in cases where the member's coverage obligations are assumed by a nonmember insurer, the transaction receives prior regulatory or judicial approval;

(c)Covered claim does not include any amount due any reinsurer, insurer, liquidator, insurance pool, state or federal government program, or underwriting association, as a subrogation or assignment recovery or otherwise, a self-insured portion of the claim, a claim for any premium calculated on a retrospective basis, a premium subject to adjustment after the date of liquidation, or any amount due to an attorney or adjuster as a fee for services rendered to the insolvent insurer. Covered claim also does not include any amount as punitive or exemplary damages or any amount claimed for incurred but not reported damages. Covered claim also does not include any claim filed with the guaranty fund after the earlier of twenty-five months after the date of the order of liquidation or the final date set by the court for the filing of claims against the liquidator or receiver. Nothing in this subdivision shall prevent a person from presenting the excluded claim to the insolvent insurer or its liquidator, but the claim shall not be asserted against any other person, including the person to whom benefits were paid or the insured of the insolvent insurer, except to the extent that the claim is outside the coverage or is in excess of the limits of the policy issued by the insolvent insurer;

(5)Insolvent insurer means a member insurer licensed to transact the business of insurance in this state, either at the time the policy was issued or when the insured event occurred, and against whom a final order of liquidation, with a finding of insolvency, has been entered by a court of competent jurisdiction in the company's state of domicile after September 2, 1977;

(6)Member insurer means a person licensed to write any kind of insurance to which the Nebraska Property and Liability Insurance Guaranty Association Act applies pursuant to the provisions of section 44-2402 , including the exchange of reciprocal or interinsurance contracts, that is licensed to transact insurance in this state, except assessment associations operating under Chapter 44, article 8, and also excepting unincorporated mutuals;

(7)Net direct written premiums means direct gross premiums written in this state on insurance policies to which the Nebraska Property and Liability Insurance Guaranty Association Act applies, less return premiums thereon and dividends paid or credited to policyholders on such direct business. Net direct written premiums does not include premiums on contracts between insurers or reinsurers;

(8)Person means any individual, corporation, partnership, limited liability company, association, voluntary organization, or reciprocal insurance exchange;

(9)Insurance means those contracts defined in section 44-102 ; and

(10)Cybersecurity insurance means first-party and third-party coverage in a policy or endorsement, written on a direct, admitted basis for losses and loss mitigation arising out of, or relating to, data privacy breaches, unauthorized information network security intrusions, computer viruses, ransomware, cyber extortion, identity theft, and similar exposures.

A claim need not be a "covered claim" as defined in subsection (4)(a) of this section to be barred by subsection (4)(b) of this section. Alsobrook v. Jim Earp Chrysler-Plymouth, 274 Neb. 374, 740 N.W.2d 785 (2007).