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1 insurance policies to avoid excessive delay in payment and 2 to avoid financial loss to claimants or policyholders because 3 of the insolvency of an insurer, to assist in the detection and 4 prevention of insurer insolvencies, and to provide an asso5 ciation to assess the cost of such protection among insurers. 6 SEC. 103. This title shall apply to all kinds of direct 7 insurance, except life, title, disability, and mortgage guaranty

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(1) The term "Commissioner" means the Commissioner

11 of the District of Columbia or his designated agent.

12 (2) The term "covered claim” means an unpaid claim, 13 including one for unearned premiums, which arises out of and

14 is within the coverage and not in excess of the applicable

15 limits of an insurance policy to which this title applies issued

16 by an insurer, if such insurer becomes an insolvent insurer

17 after the effective date of this title and (a) the claimant

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or insured is a resident of the District of Columbia at the

19 time of the insured event; or (b) the property from which

20 the claim arises is permanently located in the District of

21 Columbia. Such term shall not include any amount due any

22 reinsurer, insurer, insurance pool, or underwriting associa

23 tion, as subrogation recoveries or otherwise.

24 (3) The term “insolvent insurer” means (a) an insurer 25 authorized to transact insurance in the District of Columbia 1 either at the time the policy was issued or when the insured 2 event occurred and (b) determined to be insolvent by a 3 court of competent jurisdiction. 4 (4) The term “member insurer” means any person 5 who (a) writes any kind of insurance to which this title 6 applies, including the exchange of reciprocal or interinsur7 ance contracts, and (b) is licensed to transact insurance in

8 the District of Columbia. .

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(5) The term “net direct written premiums” means

10 direct gross premiums written in the District on insurance

11 policies to which this title applies, less return premiums there

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on and dividends paid or credited to policyholders on such

13 direct business. Such term does not include premiums on con

14 tracts between insurers or reinsurers.

15 (6) The term “person” includes individuals, corpora16 tions, associations, exchanges, and partnerships. 17 SEC. 105. There is created a nonprofit unincorporated 18 legal entity to be known as the District of Columbia Insur

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ance Guaranty Association (hereafter in this title referred

20 to as the “Association”). All member insurers shall be and

21 remain members of the Association as a condition of their

22 authority to transact insurance in the District of Columbia.

23 The Association shall perform its functions under a plan 24 of operation established and approved by the Commissioner

25 and shall exercise its powers through a Board of Directors

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(hereafter in this title referred to as the “Board”). For

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purposes of administration and assessment, the Association

3 shall be divided into three separate accounts: (a) the work4 men's compensation insurance account; (b) the automobile

5 insurance account; and (c) the account for all other in

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surance to which this title applies.

SEC. 106. (a) The Board of the Association shall

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8 consist of not less than five nor more than nine persons

9 serving terms as established in the plan of operation. The

10 members of the Board shall be selected by member insurers

11 subject to the approval of the Commissioner. Vacancies

12 on the Board shall be filled for the remaining period of the 13 term in the same manner as initial appointments. If no 14 members are selected within sixty days after the effective

15 date of this title, the Commissioner may appoint the initial

16 members of the Board.

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(b) In approving selections to the Board, the Commis

18 sioner shall consider among other things whether all member

19 insurers are fairly represented. 20 (c) Members of the Board may be reimbursed from the 21 assets of the Association for expenses incurred by them

22 as members of the Board.

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SEC, 107. (a) The Association shall

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(1) be obligated to the extent of the covered claims

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existing prior to the determination of insolvency and arising within thirty days after the determination of insolvency, or before the policy expiration date if less than thirty days after the determination, or before the insured replaces the policy or causes its cancellation, if he does so within thirty days of the determination, but such obligation shall include only that amount of each covered claim which is in excess of $100 and is less than $300,000,

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except that the Association shall pay the full amount of any covered claim arising out of a workmen's compensa

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tion policy; except in no event shall the Association be obligated to a policyholder or claimant in an amount in excess of the obligation of the insolvent insurer under the

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policy from which the claim arises ;

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(2) be deemed the insurer to the extent of its obligation on the covered claims and to such extent shall

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have all rights, duties, and obligations of the insolvent

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insurer as if the insurer had not become insolvent;

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(3) allocate claims paid and expenses incurred among the three accounts separately, and assess member insurers separately, according to subsection (b) of this section, for each account amounts necessary to pay the

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obligations of the Association under paragraph (1) of

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this subsection subsequent to an insolvency, the expenses

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of handling covered claims subsequent to an insolvency,

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the cost of examinations under section 112, and other

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expenses authorized by this title;

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(4) investigate claims brought against the Associa

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tion and adjust, compromise, settle, and pay covered claims to the extent of the Association's obligation and

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deny all other claims and may review settlements, releases and judgments to which the insolvent insurer or its insureds were parties to determine the extent to which

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such settlements, releases and judgments may be prop

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(5) notify such persons as the Commissioner directs

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(6) handle claims through its employees or through

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one or more insurers or other persons designated, sub

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ject to the approval of the Commissioner, as servicing facilities, except such designation may be declined by a

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(7) 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 title.

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(b) The assessments of each member insurer under

25 paragraph (2) of subsection (a) of this section shall bo

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