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New Jersey
Washington
Ballesteros v. New Jersey Property Liability Insurance Guaranty Association,
530 F. Supp. 1367 (D. N.J. 1982), affirmed, 696 F.2d 980. The court held that
due process is not violated when the insurer fails to give notice to its
policyholders of rehabilitation proceedings against it, because the
policyholders' interest is represented by the insurance commissioner and
protected by the state court.
Wash. Life & Disability Ins. Guar. Ass'n. v. Adams, 47 Wash. App. 213, 734 P.2d
932 (1987). The Washington Insurance Commissioner, as receiver, was not
required to give notice to each individual shareholder that an insurer's capital
stock was impaired. Under RCW 48.08.050(1), the Insurance Commissioner
was only required to serve notice upon the insurer to require its stockholders
to make good the deficiency within ninety days after service of such notice.
Duties of Agents
Alabama M. Diane Koken, as Ins. Commissioner of the Commonwealth of Pennsylvania v.
Preferred Underwriting Alliance, No. 2:04CV03282 JEO, 2007 WL 521254 (N.D.
Ala. Feb. 7, 2007). The collection of insurance premiums by an insurer from an
agent or broker is materially different from other claims or debts. Premiums
belong to the insurer. Premiums are merely collected by the agent or broker for
the insurer, held by the agent or broker in trust for the insurer, as the insurer's
property. Under Pennsylvania and Alabama law, insurance producers such as
the defendant are responsible for maintaining premium funds in a fiduciary
capacity without co‐mingling them with the broker's operating funds. 2007 WL
521254 at 4 (citations omitted).
Arkansas
Johnson & Cotnam v. Baxter, 108 Ark. 350, 157 S.W. 387 (1913). Where a fire
insurance agent presented a policyholder's claim for allowance in insolvency
proceedings after a receiver had been appointed for the insurer and notified
insured of the disallowance of the claim and reasons therefore, it was the duty
of the policyholder and not the insurance agent to appear from such
disallowance if desired to further urge the claim.
California Garamendi v. HIH America Compensation and Liability Ins. No. A098515, 2003
WL 1931866 (Cal. Ct. App. Apr. 24, 2003). Liquidation order requiring immediate
payment of collected funds to Insurance Commissioner did not require
insurance agent to remit uncollected premiums, where agent and company
agreed by contract that agent would act as company's fiduciary only with
respect to premiums that were paid and where the agent was merely guarantor
of unpaid premiums.
Nowlon v. Koram Ins. Center, Inc., 1 Cal. App. 4th 1437 (1991). Plaintiff Koram
sued his insurance broker for obtaining insurance from a non‐admitted insurer
which became insolvent. The trial court sustained the broker's demurrer
without leave to amend, on the ground that plaintiff's negligence theory did
not state a cause of action. The Court of Appeal reversed, finding that the
plaintiff could amend his complaint to state a cause of action against the
broker. Specifically, the court indicated that plaintiff could proceed on a
negligence per se theory by alleging that the broker placed the insurance in
violation of the Insurance Code. In particular, the court noted that the plaintiff
could amend his complaint to allege that the broker violated §§ 703, 1761, and
1776 of the Code ‐‐ which sections prohibit placement of insurance with
nonadmitted companies except through a surplus line broker.