Download PDF - Goodmans

Alabama
Arizona
California
Moody v. State ex rel. Payne, 344 So.2d 160 (Ala. 1977). In rejecting insolvent
insurer's motion to introduce evidence to establish its solvency, the court ruled
that the record contained ample evidence upon which the trial court could
have determined that rehabilitation was no longer viable and that reinsurance
was necessary to prevent the loss of all policyholder benefits. Thus, the trial
court did not abuse its discretion in ordering liquidation and approving the
reinsurance treaty.
State v. Aliana Hispano‐Americana, 60 Ariz. 1, 130 P.2d 910 (1942). The Arizona
Supreme Court's central holding was that it was not sufficient for the insurance
commissioner to show merely that any or all of the particular grounds set forth
in the insurance code relating to liquidation had been satisfied. It must also
have appeared that under the existing circumstances it was better for the
policyholders, creditors, stockholders and the general public that the affairs of
the defendant were administered under receivership by the state rather than
that the defendant continue its own affairs under such terms and conditions as
may be imposed by the court. The Arizona Supreme Court further held that
the trial court had not abused its discretion in finding that, notwithstanding the
many derelictions in duty of defendant's previous management, its present
management should be given an opportunity to demonstrate that it could
restore the impaired financial condition better than a receiver.
Financial Indemnity Company v. Superior Court In and For Los Angeles County,
45 Cal.2d 395, 289 P.2d 233 (1955). The California Supreme Court denied the
appellant's application for leave to produce additional evidence. In dicta, the
court stated that the primary purpose of the provision which gave the
insurance commissioner title to an insurer's assets was to prevent dissipation
of the assets of the company after the insurance commissioner had
determined that a hazardous condition existed. According to the court, the
only requirement for judicial action upon the application of the commissioner
was the commissioner's determination that a hazardous condition existed
which jeopardized the future of the company.
Rhode Island Ins. Co. v. Downey, 95 Cal. App.2d 220, 212 P.2d 965 (1950). In
order for an insurance company to have the appointment of a receiver
vacated, the company must prove that the insurance commissioner abused its
discretion and acted arbitrarily. A prime consideration in determining whether
action of insurance commissioner is procuring appointment as receiver was
arbitrary, was whether such appointment was for the protection of
policyholders and the public.
Colorado
Florida
Atlantic and Pacific Ins. Co. v. Barnes, 666 P.2d 163 (Colo. App. 1983). The
commissioner of insurance appealed from the trial court's judgment that
contrary to the commissioner's ruling, the insurer was not impaired. The court
held that it was error for the trial court to place the burden of proof on the
commissioner and that the evidence, weighing equally for both sides,
supported the entering of judgment in favor of the commissioner.
In Re Southland Insurance Co., 535 So.2d 648 (Fla. Dist. Ct. App. 1988). The
Florida Department of Insurance, as receiver for an insolvent insurer for the
purpose of rehabilitation, must produce some evidence of compliance with its
duties under the Florida Statute in order to convert the rehabilitation into a
liquidation proceeding. Consequently, evidence of either the department's
attempts to rehabilitate or the futility of rehabilitation efforts must be
presented.