646.325 Recovery of amounts paid to 3rd parties.
(1) Definition. In this section, “net worth" means the amount of an insured's total assets less the insured's total liabilities at the end of the insured's fiscal year immediately preceding the date the liquidation order was entered, as shown on the insured's audited financial statement or other substantiated financial information acceptable to the fund in its sole discretion. “Net worth" includes the consolidated net worth of all of the corporate affiliates, subsidiaries, operating divisions, holding companies, parent entities, and, if the insured is privately owned, natural persons who have an ownership interest, shown as insureds or additional insureds on the policy issued by the insurer. If the insured is a natural person, “net worth" means the insured's total assets less the insured's total liabilities on December 31 immediately preceding the date the liquidation order was entered.
(2) Recovery from certain insureds and affiliates. Except as provided in sub. (3), the fund may recover from a person the costs and expenses incurred in defending a claim against the person by a 3rd party and the amount of any claim paid on behalf of the person to a 3rd party, if all of the following conditions are satisfied:
(a) The person on whose behalf the claim was defended or paid is any of the following:
1. An insured whose net worth exceeds $25,000,000.
2. An affiliate of the insurer in liquidation.
(b) Adjudication of the claim resulted in no liability obligation on the person to pay the claim of the 3rd party or payment of the claim satisfied all or part of the person's liability obligations to 3rd parties.
(3) Limitation. The total amount recovered from an insured described in sub. (2) (a) 1. plus the amount of the insured's claims that satisfy s. 646.31 (1) to (7), (9) and (9m) but are not eligible for payment under s. 646.31 (12) may not exceed 10 percent of the insured's net worth.
(4) Costs and fees. In addition to recovery under sub. (2), the fund may recover reasonable attorney fees, disbursements, and all other actual costs expended in pursuing recovery under sub. (2), plus interest calculated at the legal rate under s. 138.04, which shall begin to accrue on all amounts not paid within 30 days after the date of the fund's written notification to the insured of the amount due.
History: 1987 a. 325; 2003 a. 261; 2009 a. 342.
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