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exhaust the pro rata shares of solvent insurers before LIGA would be obligated
to assume responsibility for the pro rata share of the exposure attributed to the
insolvent insurer of Southern Silica (“Reliance”). LIGA relied on LSA‐R.S. 22:1386
stating, “Any person having a claim against an insurer under any provision in an
insurance policy other than a policy of an insolvent insurer which is also a
covered claim, shall be required first to exhaust his rights under such policy. . . .”
The supreme court held that, under the exposure theory, the solvent insurers
would only be liable for their pro rata shares of coverage for the years that they
provided insurance to the tortfeasor. At the same time, LIGA would be
responsible for the pro rata share of Southern Silica’s exposure for the years
that the insolvent insurer (“Reliance”) provided coverage to Southern Silica.
Maryland Maryland Insurance Guaranty Association v. Muhl, 671, September Term, 1985,
slip op. (Md. Ct. Spec. Appeals, February 10, 1986). The court held that
retroactive effect should be given to the section of the liquidation statute
which grants a priority to claims of Maryland's guaranty fund because to do so
created no basic unfairness or manifest injustice and the remedial nature of the
statute supported a finding of retroactivity.
Oklahoma
State ex rel. Crawford v. Guardian Life Ins. Co. of Am., 1997 Okla. 10, 954 P.2d
1235 (1998). A statute eliminating reinsurer’s right to offset obligation to pay
claims against right to receive premiums where reinsurance agreement did
not truly transfer risk could not be applied retroactively so as to deprive
reinsurer of contractual right of offset under reinsurance agreement made
before effective date of amendment with respect to policies bought before
passage of amended statute. However, this ruling was subject to the
requirements that the policy owners continued to pay premiums after
effective date and the transactions giving rise to claims arose after passage.
Welch v. Union Mut’l Life. Ins. Co. of Providence, 1989 Okla. 117, 776 P.2d 847
(1989). An amendment to the Property and Casualty Insurance Guaranty
Association Act exempting uninsured motorist coverage from exhaustion
requirement for bringing claim against Guaranty Association did not apply to
an accident that occurred before the amendment was passed.
Rhode Island
Langdeau v. Naragansett Ins. Co., 96 R.I. 276, 191 A.2d 28 (1963). The court held
that the insurance liquidation provisions enacted after the decision in this case
were procedural in nature and should be applied retroactively if doing so
would not impair the obligations to the insurance company's policyholders.
Transferring the contents of a liquidated special trust fund held by the General
Treasurer to the receiver would not impair the vested rights of policyholders or
beneficiaries since the receiver would take the funds subject to and be
impressed with a trust.
Texas Tapiador v. North American Lloyds of Texas, 778 S.W.2d 207 (Tex. Civ. App. ‐‐
Houston [1st Dist.]1989). After appeal was filed, insurance carrier was declared
insolvent. Appellants sought to add the receiver as a party on appeal, and
receiver resisted claiming that the court lacked jurisdiction over him until such
time as an administrative claim had been filed and rejected. The court held
that the receiver was properly added as a party on appeal, noting that the
administrative claim provision of the insurance code applies to claims which
arise after the insolvency and not to lawsuits which are pending at the time of
insolvency. Similarly, the provision which allows the receiver a one year period
after his appointment to appear in a lawsuit is applicable to suits begun at the
trial level, not on appeal. A contrary holding would cause unreasonable delays
in resolving suits which are pending prior to the appointment of the receiver.