Download PDF - Goodmans

Texas
Op. Att'y. Gen. 0‐3910 (Tex. 1941). A court‐appointed receiver for insurance
company may be removed upon motion of interested party, supported by
competent evidence as to the desirability and necessity of the change, and the
court may appoint the statutory liquidator of the Board of Insurance or any
other person as receiver.
State Board of Ins. v. Betts, 158 Tex. 83, 308 S.W.2d 846 (1958). When the State
Insurance Board failed to appoint a successor to an attorney who had
resigned, the court found that it was not arbitrary and capricious of the judge
to remedy this defect by reappointing the attorney previously discharged by
the Board. The court noted that the insurance code provides for the
establishment of a statutory liquidator appointed by the Board but operating
under extensive judicial control. The authority of the court extends to all
powers essential to effective exercise of the authority delegated by the code
and this can extend to appointment of an attorney. The code does not give the
Board and Commissioner sole and exclusive authority to appoint counsel under
all conditions.
State Board of Ins. v. Betts, 158 Tex. 624, 315 S.W.2d 286 (1958). The court held
that the provisions of the statute giving Board power to appoint and fix
compensation of the liquidator and his counsel is mandatory and judge's order
increasing compensation in disregard of statute was void. The fact that
numerous transactions incident to receivership are under the supervision of
the court does not destroy all discretionary powers of the insurance
department.
Tapiador v. North American Lloyds of Texas, 778 S.W.2d 207 (Tex. App. ‐‐
Houston [1st Dist.]1989). After appeal was filed, insurance carrier was declared
insolvent. Appellants sought to add the receiver as a party on appeal, and
receiver resisted claiming that the court lacked jurisdiction over him until such
time as an administrative claim had been filed and rejected. The court held
that the receiver was properly added as a party on appeal, noting that the
administrative claim provision of the insurance code applies to claims which
arise after the insolvency and not to lawsuits which are pending at the time of
insolvency. Similarly, the provision which allows the receiver a one year period
after his appointment to appear in a lawsuit is applicable to suits begun at the
trial level, not on appeal. A contrary holding would cause unreasonable delays
in resolving suits which are pending prior to the appointment of the receiver.
Williams v. Knox, 207 S.W.2d 151 (Tex. Civ. App. 1947), writ ref. n.r.e. In a suit by
receiver of reciprocal insurance exchange to recover sum alleged to be owed
by a policyholder of the exchange, the policyholder argued that court had no
jurisdiction to appoint a receiver. The court held that Art. 5068c (repealed;
now Art. 21.28) authorizing appointment of a liquidator for an insurer to act as
a receiver, the court had jurisdiction to appoint a receiver.
Virgin Islands
In the Matter of Dome Ins. Co., 592 F. Supp. 1219 (D. V.I. 1984). The Governor of
the Virgin Islands signed legislation which amended the Uniform Insurers'
Liquidation Act to provide for eight different classes of creditors. However,
since the legislation was signed after Dome Insurance Company was placed in
receivership, the amendment did not apply in this case, and it was up to the
discretion of the Court to establish the order of priority for payments of claims
among general creditors of Dome.
Washington Kueckelhan v. Federal Old Line Ins. Co., 69 Wash.2d 392, 418 P.2d 443 (1966).
The court held that the court's sole and proper function is to supervise and