Code of the District of Columbia

§ 31–5501. Definitions.

For the purposes of this chapter, the term:

(1) “Account” means any 1 of the 3 accounts created by § 31-5503.

(2) “Affiliate” means a person who, directly or indirectly, through 1 or more intermediaries, controls, is controlled by, or is under common control with an insolvent insurer on December 31st of the year next preceding the date the insurer becomes an insolvent insurer.

(3) “Association” means the District of Columbia Insurance Guaranty Association created pursuant to § 31-5503.

(4) “Claimant” means any insured making a first-party claim or any person instituting a liability claim, provided that no person who is an affiliate of the insolvent insurer may be a claimant.

(5) “Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10% or more of the voting securities of any other person. This presumption may be rebutted by a showing that control does not exist in fact.

(6) “Covered claim” means an unpaid claim, including one for unearned premiums, submitted by a claimant, which arises out of and is within the coverage and is subject to the applicable limits of an insurance policy to which this chapter applies issued by an insurer, if such an insurer becomes an insolvent insurer after October 21, 1993, and:

(A) The claimant or insured is a resident of the District at the time of the insured event, provided that for entities other than an individual, the principal place of business of the claimant or insured is located in the District at the time of the insured event; or

(B) The property from which the claim arises is permanently located in the District. The term “covered claim” shall not include any amount awarded as punitive or exemplary damages, sought as a return of premium under any retrospective rating plan, or due any reinsurer, insurer, insurance pool, or underwriting association as subrogation recoveries or otherwise.

(7) “District” means the District of Columbia.

(8) “Insolvent insurer” means an insurer licensed to transact insurance in the District of Columbia, either at the time the policy was issued or when the insured event occurred, and against whom an order of liquidation with a finding of insolvency has been entered after October 21, 1993, by a court of competent jurisdiction in the insurer’s state of domicile or of the District under § 31-1316, and which order of liquidation has not been stayed or been the subject of a writ of supersedeas or other comparable order.

(9) “Member insurer” means any person who:

(A) Writes any kind of insurance to which this chapter applies under § 31-5502, including the exchange of reciprocal or interinsurance contracts; and

(B) Is licensed to transact insurance in the District.

(10) “Net direct written premiums” means direct gross premiums written in the District on insurance policies to which this chapter applies, less return premiums and dividends paid or credited to policyholders on the direct business. The term “net direct written premiums” does not include premiums on contracts between insurers or reinsurers.

(11) “Person” means any individual, corporation, partnership, association, or voluntary organization.

(Oct. 21, 1993, D.C. Law 10-51, § 2, 40 DCR 6120; May 16, 1995, D.C. Law 10-255, § 33, 41 DCR 5193.)

Prior Codifications

1981 Ed., § 35-3901.

Section References

This section is referenced in § 31-5503.

Delegation of Authority

Delegation of authority pursuant to D.C. Law 10-51, the Property and Liability Insurance Guaranty Association Act of 1993, see Mayor’s Order 94-54, March 7, 1994 ( 41 DCR 1433).