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insurer, sued former owner of insurer, who had allegedly stolen premiums,
and other individuals, under North Carolina Racketeer Influenced and
Corrupt Organizations Act. The court held that North Carolina Insurance
Commissioner, as receiver of insolvent insurer, had standing to sue former
president of insurer, under North Carolina’s Racketeer Influenced and
Corrupt Organizations Act (“RICO”), for allegedly stealing insurance
premiums. Furthermore, the court held that the Commissioner’s allegation
that the former president of insurer had stolen premiums sent by
policyholders, while leaving insurer obligated to pay claims, through scheme
which involved use of fraudulent mailing, embezzlement, and willful filing of
a false annual statement, stated claim for violation of North Carolina’s RICO.
The court also noted that a Commissioner “assumes the identity” of an
insolvent insurer when he becomes a receiver.
State ex rel. Long v. Petree Stockton, L.L.P., 499 S.E.2d 790 (1998). State of
North Carolina, acting as life insurer’s liquidator, brought action against
Petree Stockton, L.L.P., insolvent insurer’s attorneys, for negligence and
constructive fraud in connection with loans by insolvent insurer. In addition,
liquidator alleged former attorney’s breach of duty of loyalty by defending
new clients in suit by insolvent insurer. The court concluded that a two‐year
statute of limitations for legal malpractice actions applied to liquidator’s
action on behalf of insolvent insurer. The statute permits liquidator to bring
the suit on behalf of insurer within two years or subsequent time period
permitted by applicable law, and term “applicable law” referred to law
applying to insolvent insurer’s malpractice action. The court dismissed the
liquidator’s actions.
State of North Carolina v. Alexander & Alexander Services, Inc., 680 F. Supp.
746 (E.D.N.C. 1988). The State of North Carolina brought an action for RICO
violations and state unfair business and trade practice violations against
alleged defrauders of an insolvent insurer. The court held that the
Commissioner of Insurance, acting as the rehabilitator for the insolvent
insurance company, could not assert claims on behalf of creditors or policy
holders of the insolvent insurance company as this exceeded its statutory
authority to conduct the business of the insurer. The court did find that the
Insurance Commissioner could bring an action under the RICO statute in his
capacity as insurance commissioner and rehabilitator of the insolvent
insurance company as the claims were claims the company would have had if
not for its insolvency.
Ohio Benjamin v. Ernst & Young, LLP, 167 Ohio App.3d 350 (2006). The State
Superintendent of Insurance, as liquidator of an insurance company, filed an
action claiming an accounting firm negligently audited the insurance company’s
financial statements. The defendants failed in their attempt to remove the
action to the Ohio Court of Claims. The action ultimately remained in the state
liquidation court. The court explained that the superintendent wears two
different hats—one as liquidator of insolvent insurance companies and one as
regulator of the Ohio Department of Insurance—and, when serving as
liquidator, steps into the shoes of the insolvent insurance company.
Benjamin v. Sawicz, 159 Ohio App.3d 265 (2004). The State Superintendent of
Insurance, as liquidator of an insurance company, challenged the state
liquidation court’s ruling requiring her to respond to discovery requests. The
court held that she held vital information and therefore, responding to
discovery was proper. The court also held that a rehabilitator or liquidator of an
insolvent insurance company has the power to: 1) file legal claims on behalf of