20-673. Nonduplication of recovery; exhausting all other applicable coverages; rights of fund and member insurer; definition

A. Any person having a claim against an insurer under any provision in an insurance policy that is also a covered claim shall be required to exhaust first all rights under that policy. Any amount payable on a covered claim pursuant to this article shall be reduced by the amount of the recovery under the claimant's insurance policy. Any recovery pursuant to this article shall be reduced by the amount of the recovery under the claimant's insurance policy. A member insurer or other insurer, which pays the insurer's own policy, shall have no right of subrogation or recovery against the insured of an insolvent insurer. A claimant for workers' compensation benefits shall have all rights and obligations conferred under title 23, chapter 6.

B. Any person having a claim that may be recovered under more than one insurance guaranty fund or its equivalent or who is insured under more than one policy shall first exhaust coverage from the fund of the place of residence of the insured or, if it is a first-party claim for damage to property with a permanent location, shall first exhaust coverage from the fund of the location of the property, or shall first exhaust coverage under the other policy, and if it is a workers' compensation claim, recovery shall be sought from the guaranty fund or its equivalent of the place of residence of the claimant. Any recovery pursuant to this article shall be reduced by the amount of the recovery from any other insurance guaranty fund or its equivalent or under another policy. Covered claims by subscribers of an insolvent reciprocal insurer shall not be paid until all subscribers have been assessed pursuant to section 20-791.

C. Where more than one policy may be applicable, a policy issued by the insolvent insurer shall be deemed to be excess coverage. The claimant shall be required to exhaust all rights under other applicable coverage or coverages. Any recovery pursuant to this article shall be reduced by the amount of the recovery under the claimant's insurance policy. Any amount payable on a covered claim shall be reduced by the amount of the recovery under other applicable insurance.

D. Except for workers' compensation claimants, if damages against uninsured motorists are recoverable by the claimant from the claimant's own insurer, the recoverable damages shall reduce the amount of any recovery pursuant to this article if the full amount of the uninsured motorist coverage has been exhausted. The claimant shall have no claim against the insured of the insolvent carrier or the fund if the full amount of uninsured motorist coverage was not recovered by the claimant. A member insurer shall have no right of subrogation against the insured of the insolvent carrier or against the fund for any amount paid by the insurer under uninsured motorist coverage. A member insurer may file a claim for subrogation payments under uninsured motorist coverage against the ancillary or domiciliary receiver of the insolvent insurer.

E. The fund shall receive the proceeds of any amounts recoverable on reinsurance contracts or treaties entered into by the insolvent insurer that cover any of the liabilities incurred by the insolvent insurer in the category or categories involved. The proceeds shall be limited to payments on or loss adjustment expenses or defense costs actually incurred by the fund on account of claims covered in the contracts or treaties. The director, as receiver or ancillary receiver, shall receive the proceeds of any reinsurance recoverable to the extent of payment on claims, loss adjustment expenses or defense costs made before the order of liquidation.

F. If a covered claim arises out of two or more policies to which this article applies, a recovery under one policy reduces the amount that is payable under the other policy. The fund is not liable for the payment of more than one policy on a covered claim.

G. For the purposes of this article, " exhaustion of all rights under any other policy of insurance" means the payment of the applicable policy limits or an adjudication by a court of record that no benefits are owed.