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Notice to Creditors and Others ‐ In General
denied the creditor’s motion seeking relief from an injunction entered in
ancillary proceeding to continue with an arbitration proceeding, and would
defer to a foreign insolvency proceeding that stayed the arbitration. The court
held that payment by the reinsurer of security required by the arbitration panel
would have the effect of transforming an unsecured creditor into a secured
creditor.
Alaska
California
Williams v. Wainscott, 974 P.2d 975 (Alaska 1999). The receiver's decision to
deny as untimely a ceding company's claims against an insolvent reinsurer
was not upheld when notice of the deadline to file claims had not been
properly served upon ceding company.
Abraugh v. Gillespie, 203 Cal. App. 3d 462, 250 Cal. Rptr. 21 (1988). The court
held that absent a showing of failure to receive statutory notice by a claimant
or any showing that the Insurance Commissioner was responsible for late filing
of a claim, a court cannot grant relief from provisions of the Insurance Code
requiring a claim against an insolvent insurer to be filed within six months.
Bunner v. Imperial Ins. Co., 181 Cal. App. 3d 14, 225 Cal. Rptr. 912 (1986). An
orthopedic surgeon had a malpractice insurance policy with an insurer which
later became insolvent. The Insurance Commissioner was appointed liquidator
and, as required in the Insurance Code, published notice that claims against the
insurer were required to be filed within six months and mailed individual
notices to all insureds. The surgeon never received the notice since he had
moved to a different address. The appellate court held that under the statute,
actual notice is required to be given by the Commissioner to insureds and the
Commissioner's compliance with the mailing requirements of the statute
created only a rebuttable presumption of receipt of notice which was
overcome by the surgeon's testimony before the trial court. Since the
surgeon's non‐receipt of the notice was through no fault of his own, the
surgeon was allowed to file a late claim against the insolvent insurer.
Fitzgibbons v. Low, 2002 Cal. App. Unpub LEXIS 6191. Notice by publication did
not deny claimant due process.
Middleton v. Imperial Ins. Co., 34 Cal.3d 134, 193 Cal. Rptr. 144, 666 P.2d 1
(1983). The California Supreme Court held that the insurance commissioner's
failure to give notice to a doctor and a nurse of the insolvency and the time
limits for filing claims against the insurer, estopped the commissioner from
asserting that they were barred from filing their claims. The court held that
they were entitled to such notice both as "persons known or reasonably
expected to have or be interested in claims against the insurer," and as
"insureds," even though their policies had expired prior to the insurer's
insolvency, since the policies covered occurrences of alleged malpractice
committed during the policy period regardless of when a malpractice claim
might be made. The doctor and nurse received notice of the malpractice
claims two years after the expiration date for filing in liquidation.
Illinois Cork v. Associated International Insurance Managers, Inc., 58 Ill. App. 2d 331,
208 N.E.2d 4 (Ill. App. 1965). The court held that the authority of defendant
insurance broker to make any further disbursements from the bank account of
an insolvent British insurer was effectively revoked by the notice sent it by
British liquidators. Thus, the court held that in dispensing funds without the