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involving an insolvent insurer. Moreover, the receiver agreed to submit to the
jurisdiction of the bankruptcy court in the agreement with the bankruptcy
examiner related to the disposition and sale of the subject receivership
property. After denying the receiver’s challenge to jurisdiction on the basis of
McCarran‐Ferguson, the court denied the receiver’s alternative request that the
bankruptcy court abstain from hearing the bankruptcy examiner’s petition for
adversarial proceeding. The court reasoned that the abstention was within the
sound discretion of the lower court and would not be overturned on appeal.
Van Riper v. Corr. Med. Servs., 44 Fed. Appx. 445 (10th Cir. 2002). Defendant
physicians moved to abate an appeal of summary judgment ruling in their favor
at the trial court level based on said defendants’ liability insurer being declared
insolvent and entering liquidation. The defendants argued that the
Commonwealth Court of Pennsylvania order staying all proceedings in which
the insolvent liability insurer has a duty to defend was entitled to full faith and
credit by the federal appellate court. The Tenth Circuit disagreed noting that
the insurer was not a party to the appeal, and if it were, the state court was
without power to enjoin an action in federal court. The appellate court
explained that the proceeding at issue was not an in rem action implicating the
jurisdiction of the receivership court, but rather was an in personam action with
regard to the defendant insureds. The Tenth Circuit noted that the appellants
did not ask the court to consider whether it should defer to the subject state
liquidation statutes in light of the McCarran‐Ferguson Act.
Arkansas
Baldwin‐United Corp. v. Garner, 283 Ark. 385, 678 S.W.2d 754 (1984). The
insurance commissioner, as receiver of three insolvent insurance companies
owned by one corporation, proposed a rehabilitation plan which was approved
by the court. The parent corporation appealed the plan's provisions that: (i)
the rehabilitation court had exclusive jurisdiction over the assets of the
companies, and (ii) the rehabilitation court would refuse to honor a judgment
obtained in any other forum. In affirming the lower court's decision, the
Supreme Court of Arkansas announced that nothing contained in the
McCarran‐Ferguson Act or the Bankruptcy Act prohibits a state from
determining the rights of an insurance company's creditors. Furthermore, the
appellate court added, the lower court properly ordered that all claims to the
companies' assets be adjudicated in the rehabilitation court.
California Wagner v. Amwest Ins. Group, 285 B.R. 447 (Bankr. C.D. Cal. 2002). The
Nebraska liquidator brought an action for declaratory relief as to the court’s
jurisdiction and rights to a tax refund under a tax allocation agreement between
an insurance holding company and its subsidiary. Citing the McCarran‐Ferguson
Act, a California bankruptcy court held it was reverse preempted from
interpreting the agreement because interpretation would be directly related to
“the business of insurance.”
Colorado Phillips v. Lincoln Nat. Health & Cas. Ins. Co., 774 F. Supp. 1297 (D. Colo. 1991).
The liquidation of an insolvent insurance company is not the "business of
insurance" as that term is used in the McCarran‐Ferguson Act. An arbitration
clause contained in a reinsurance contract is not barred by the McCarran
Ferguson Act as an impairment to Colorado's regulation of the business of
insurance.
In re First Assured Warranty Corp., 383 B.R. 502. (Bankr. D. Colo. 2007). To
determine whether an entity is the substantial equivalent of an insurance
company, courts compare the powers conferred upon or withheld from the