Download PDF - Goodmans

failed to demonstrate to the contrary, the Commissioner's determination was
sufficient to grant the rehabilitation order.
In the Matter of the Liquidation of Integrity Insurance Company, 231 N.J. Super.
143 (Ch. Div. 1988). Integrity's creditors sought a policyholders' committee to
enable the policyholders to protect their interest in the liquidation of the
company. The policyholders claimed that they had not been informed as to
the progress of the liquidation nor had they been given the opportunity to
participate in negotiations and were unaware of the status of commutations.
The court held that it is empowered and authorized to create a policyholders'
committee pursuant to its equitable powers as Chancery Court and the
Uniform Insurers Liquidation Act. The court, however, concluded that
policyholders had no right to notice of all the proceedings regarding the
liquidation of Integrity under the Uniform Insurers Liquidation Act. Moreover,
the court concluded that the creation of a policyholders' committee would
inevitably result in the inefficient administration of the Integrity estate,
increased litigation, depletion of the assets of Integrity's estate and would
have an adverse impact upon the interests of all other creditors. Thus, the
court denied the motion to appoint a policyholders' committee.
New York Corcoran v. AIG Multi‐Line Syndicate, Inc., No. 4835‐85 (N.Y. Sup. Ct. Mar. 6,
1989) (LEXIS, Insrlw library, NY file). The court held that the Convention on the
Recognition and Enforcement of Foreign Arbitral Awards, which became
effective on December 29, 1970, is the "supreme law of the land" and thus
would take precedence over the New York statutory scheme concerning the
liquidation of insurance companies and vesting exclusive jurisdiction of a
liquidation proceeding in the New York Supreme Court. Consequently, the
reinsurance dispute satisfies the requirements of the Convention and is
arbitrable. The court, however, indicated that as supervisor of the liquidation
proceedings it would retain jurisdiction with respect to the award rendered in
the arbitration.
In re Application for an Order Staying Arbitration, No. 24632, slip op. (N.Y. App.
Div., 1st Dept. December 3, 1985). When an insurance company is in liquidation
and a court order prohibits any action or proceeding from being brought
against it, a preliminary trial to determine whether coverage by the liquidated
company existed should be assigned to the court supervising the liquidation.
An insurer, from whom uninsured motorist coverage was sought, applied for a
preliminary trial to determine whether the company in liquidation had in fact
covered any of the parties to the accident. The trial, however, should not be
assigned to the Trial Term court because the insurance law provides for the
exclusive operation and procedure of companies in liquidation.
In re Lawyer Mortgage Co., 169 Misc. 802, 9 N.Y.S.2d 127 (1938), affirmed, 256
A.D. 974, 11 N.Y.S.2d 250. The court, in the exercise of its inherent equity
powers, could approve a plan for the reorganization of a domestic insurer if it
was acceptable to the insurance commissioner and was fair to all concerned.
In re National Surety Co., 286 N.Y. 216, 36 N.E.2d 119 (1941). Only the court may
allow or forbid claims on the assets of a dissolved insurance company.
In re National Surety Co., 248 A.D. 111, 288 N.Y.S. 1014 (1936). An order
disapproving the acceptance bid by the insurance commission of the highest
for the stock of a new surety company organized under a plan of rehabilitation
on the ground that the bid was inadequate and that acceptance of an