SENATE BILL NO. 377

INTRODUCED BY S. STANG

A BILL FOR AN ACT ENTITLED: "AN ACT SUBMITTING TO THE QUALIFIED ELECTORS A PROVISION SETTING THE MONTANA INSURANCE GUARANTY ASSOCIATION ASSESSMENT AT 2 PERCENT OF NET DIRECT WRITTEN PREMIUMS; AMENDING SECTION 33-10-116, MCA; AND PROVIDING AN EFFECTIVE DATE."

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Section 33-10-116, MCA, is amended to read:

"33-10-116. Assessment. (1) The association shall assess insurers amounts necessary to pay the obligations of the association under 33-10-105(1)(a) subsequent to an insolvency, the expenses of handling covered claims subsequent to an insolvency, the cost of examinations under 33-10-108, and other expenses authorized by this part.

(2) The assessments of each member insurer must be in the proportion that the net direct written premiums of the member insurer for the preceding calendar year bear to the net direct written premiums of all member insurers for the preceding calendar year. Each member insurer must be notified of the assessment not later than 30 days before it is due. Each year, the association shall assess 2% of that member insurer's net direct written premiums for the preceding calendar year.

(3) If the maximum assessment, together with the other assets of the association, does not provide in any 1 year an amount sufficient to make all necessary payments, the funds available must be prorated and the unpaid portion must be paid as soon as funds become available.

(4) The association may exempt or defer, in whole or in part, the assessment of any member insurer, if the assessment would cause the member insurer's financial statement to reflect amounts of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance.

(5) Each member insurer may set off against any assessment authorized payments made on covered claims and expenses incurred in the payment of claims by the member insurer."

NEW SECTION. Section 2. Submission to electorate. This amendment shall be submitted to the qualified electors of Montana at the tax election to be held in 1999 by printing on the ballot the full title of this act and the following:

SHALL THE MONTANA INSURANCE GUARANTY ASSOCIATION ASSESSMENT FEE TAX BE INCREASED ANNUALLY TO 2% OF NET DIRECT WRITTEN PREMIUMS IN THE FOLLOWING MANNER?

[]	FOR setting the Montana insurance guaranty association assessment at an annual 2% of net direct written premiums.

[]	AGAINST setting the Montana insurance guaranty association assessment at an annual 2% of net direct written premiums.

NEW SECTION. Section 3. Effective date. If approved by the electorate, this act is effective July 1, 1999.

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