D.C. Mun. Regs. tit. 26, r. 26-A1308
If any Member fails, by reason of insolvency to pay its proportion of any expense or of any loss incurred by the Facility, the unpaid loss or the remaining Members shall pay expense, each contribution in the manner provided for distribution of expenses and losses under the Constitution, deleting thereby the proportion of the defaulting Member.
The Facility shall be subrogated to the rights of the remaining Members in any liquidation proceeding and shall have full authority on their behalf to exercise their rights in any action or proceeding.
In the event of insolvency of a Member, any reinsurance assumed by the Facility with respect to policies issued by such Member pursuant to the previous Plan of Operation shall be payable as follows:
An exception to subsection 1308.3 shall apply when the Facility, with the consent of the insured under the reinsured policy, as evidenced by endorsement, has assumed the policy obligations of the Member as direct obligations of the Facility to the payees under the policy and as a substitute for the obligations of the Member to the payees.
The liquidator, receiver or statutory successor of the Member shall give written notice to the Facility of the pendency of a claim against the Member on the policy reinsured within a reasonable time after the claim is filed in the insolvency proceeding.
During the pendency of a claim, the Facility may investigate the claim and, at its own expense, in the proceeding where the claim is to be adjudicated, interpose any defense or defenses that it may deem available to the Member or its liquidator, receiver or statutory successor.
The expense incurred by the Facility shall be chargeable subject to court approval against the insolvent Member as part of the expense of liquidation to the extent of a proportionate share of the benefit that may accrue to the Member solely as a result of the defense undertaken by the Facility.
D.C. Mun. Regs. tit. 26, r. 26-A1308