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implement the statutory liquidation scheme by denying a settlement reached in
a claim against the insurer in receivership. The liquidator argued that the
settlement violated a stay of actions against the insurer.
In re Consolidated Mutual Ins. Co. (Levy v. Superintendent of Insurance), 154
A.D.2d 592, 546 N.Y.S.2d 420 (2d Dep't 1992), rev'd, 77 N.Y.2d 144, 565 N.Y.S.2d
434, 566 N.E.2d 633 (1990). New York's highest court reversed a finding below
that the Liquidator of Consolidated Mutual Insurance Company could
terminate the group life and health coverage of Consolidated's retired
employees. Although noting that the Employee Benefit Guidebook did not
unambiguously state whether Consolidated intended the benefits to be noncancellable,
extrinsic evidence in the form of letters and memoranda
demonstrated such an intent. The Court concluded that since the Liquidator is
governed by the contractual agreements of Consolidated, the Liquidator was
therefore not authorized to cancel the group benefits of Consolidated's
employees.
In re First Central Ins. Co., 791 N.Y.S.2d 123 (App. Div. 2005). Pursuant to statute,
the Superintendent of Insurance as liquidator is responsible to provide for the
economical liquidation of insolvent insurance companies through the agency of
a state department and to prevent waste of assets. The Superintendent failed
to show, however, a sufficient basis to disclaim coverage where the insolvent
insurer had expressly accepted an insured’s claim for coverage for lead paint
injuries.
In re Kinney, 257 A.D. 496, 14 N.Y.S.2d 11 (1939), certified questions answered
and affirmed, 281 N.Y. 840. 24 N.E.2d 494. The insurance commissioner derives
powers from the legislature. The commissioner acts as a "statutory receiver"
rather than an "officer of the court".
In re Lawyers Mortgage Co., 293 N.Y. 159, 56 N.E.2d 305 (1944). The insurance
commissioner as the liquidator of a delinquent insurer could sell the property
of the insurer subject to court approval. However, the court could not compel
such action, even though it could veto the planned disposal of the delinquent's
assets. The court found that under the reorganization plan the commissioner
was not required to apply to the court for an order approving disposition of
non‐liquid assets to the reorganization managers of the insurer.
In re Lawyers Mortgage Co., 169 Misc. 802, 9 N.Y.S.2d 127 (1938), affirmed, 256
A.D. 974, 11 N.Y.S.2d 280. The court held that the insurance commissioner had
the authority to sell the assets at a court‐approved fair price and did not risk an
allegation that the commissioner had surrendered the trust imposed on the
commissioner as liquidator. The consent of the commissioner was also
necessary for the company's proposed reorganization as it provided for the
sale of the company's assets. If the plan for reorganization did not involve
such a sale and called only for the introduction of new capital and
recapitalization, the commissioner's approval would not have been necessary
for the reorganization to proceed.
In re Lawyers Title & Guaranty Co., 254 A.D. 491, 5 N.Y.S.2d 484 (1938),
reargument denied, 9 N.Y.S.2d 126. The insurance commissioner has the
power to negotiate with interested parties, draw up a plan for the liquidation
of an insolvent company, and then submit the plan for court approval.
In re Lawyers Title & Guaranty Co., 165 Misc. 776, 1 N.Y.S.2d 137 (1938), reversed
on other grounds, 254 A.D. 491, 5 N.Y.S.2d 484, reargument denied, 9 N.Y.S.2d