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insolvent insurer in the interest of not interfering with ongoing insurer
rehabilitation.
Serio v. Rhulen, 815 N.Y.S.2d 320 (App. Div. 2006). In the rehabilitator’s action
against certain directors and officers of the insolvent insurer for breach of
fiduciary duties and diversion of funds, the court ruled that the defendant had
preserved his statutory right to priority of deposition, and the rehabilitator’s
duties, protective statutory role as rehabilitator, and interest in proceeding in
the action did not divest the defendant of priority of deposition. The defendant
would be bound to use reasonable diligence in pursuing the rehabilitator’s
deposition and the court retained broad discretion to issue protective orders.
Superintendent of Insurance of State of New York v. Bankers Life & Casualty
Co., 401 F. Supp. 640 (D.C. N.Y. 1975). The insurance commissioner is entitled
to all the rights of a private litigant in the federal district courts when seeking
to enforce the claims of an insurance corporation in dissolution, and also has
powers to compound or sell all uncollectible or doubtful claims owed the
insolvent insurer, or to settle or discontinue those claims on terms which the
commissioner considers proper.
Van Schaick v. Stevens, 152 Misc. 163, 273 N.Y.S. 748 (1934). The court upheld
an action brought by the insurance commissioner as rehabilitator against the
directors of an insurance company, as in keeping with the statutory purpose of
restoring the company to its prior condition, where the action brought was for
an accounting as to the alleged wrongful acts and for repayment and
restoration of assets to the company which had been diverted, wasted and
misappropriated.
Van Schaick v. Title Guarantee & Trust Co., 252 A.D. 188, 297 N.Y.S. 827 (1937).
The insurance commissioner as a rehabilitator possesses the powers of a
statutory receiver, and can prosecute actions on behalf of creditors.
North Carolina Eastern Appraisal Services, Inc., v. State ex rel. Long, 118 N.C. App. 692, 457
S.E.2d 312 (1995). The court held that actions of Insurance Commissioner as
liquidator of insolvent insurer in obtaining temporary custody of claims files
of private appraiser for insurer, for use by guaranty association in handling
claims, did not constitute a “taking” of appraiser’s property, entitling
appraiser to just compensation under Federal and State constitutions.
Furthermore, the Court noted that under North Carolina law, Commissioner
of Insurance assumes identity of an insolvent insurer when he becomes a
receiver.
Pink v. Henby, 220 N.C. 667, 18 S.E.2d 127 (1942). As the statutory liquidator of
a surety company the New York insurance commissioner could sue in North
Carolina to recover attorney's fees paid pursuant to an application for a tax
abatement bond.
State ex rel. Ingram v. All American Assurance Co., 34 N.C. App. 517, 239 S.E.2d
474 (1977). The rehabilitation court has broad supervisory powers, and
therefore can award fees to insolvent insurer's counsel of record for services
rendered in insolvency proceeding, although statute does not specifically so
allow. The insurance commissioner has both discretionary and ministerial
powers under the statute.
State of North Carolina, ex rel. Long v. Cooper, 14 F. Supp. 2d 767 (E.D.N.C.
1996). North Carolina Commissioner of Insurance, as receiver of insolvent