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companies to execute an agreement providing for the reinsurance and
assumption of liabilities of an insolvent insurer's worker compensation policies.
The court concluded that the receiver of the insolvent insurer was obligated
first to transfer to the reinsurers, which had undertaken such workman's
compensation obligations, the funds collected in liquidation, to the extent of
the liabilities under the workers compensation policies. This was to be done
before the claims of general creditors of the defunct insurer were satisfied.
Colorado
Georgia
Colo. Ins. Guar. Ass’n v. Menor, 166 P.3d 205. (Colo. App. 2007). An uninsured or
underinsured motorist (UM/UIM) insurer is not a third‐party tortfeasor under
Colorado Statute. The UM/UIM insurer does not step into the shoes of the
tortfeasor and an workers’ compensation insurer does not have subrogation
rights against UM/UIM insurers.
Kuhl v. General American Life Ins. Co., 56 Ga. App. 424, 192 S.E. 831 (1937). The
court held that the judicial declaration of insolvency of a life insurer cancels its
executory contracts, and the insured's sole recourse is an action for breach of
contract. If the insured accepts an assumption certificate offered by a
company which is assuming the liabilities of the insolvent company, the insured
is bound by the terms of the assumption contract.
Illinois AAA Disposal Systems, Inc. v. Aetna Cas. & Sur. Co., 355 Ill.App.3d 275, 821
N.E.2d 1278 (2005). Risk of insurance carrier becoming insolvent is placed on
insured, not another carrier that was a stranger to the insurance process.
Insolvency of successor excess carrier does not increase the liability of
previous carrier. Accordingly, in a coverage dispute, court errs where it
excludes from a pro rata allocation years covered by polices written by
insolvent carriers.
American Serv. Ins. Co v. Pasalka, 363 Ill.App.3d 385, 842 N.E.2d 1219 (2006).
Automobile liability insurer’s policy requiring insureds to request arbitration of
uninsured motorist coverage claim within two years of accident violates public
policy of proving uninsured motorists coverage as applied to insureds who
seek arbitration more than two years after accidents and after tortfeasors’
insurers are in liquidation because insureds could not have know about such
insolvencies and denial of coverage would undermine public policy to make
such coverage available.
Argonaut Ins. Co. v. Safway Steel Prods., Inc., 355 Ill.App.3d 1, 822 N.E.2d 79 (Ill.
App. Ct. 2005). General contractor’s excess insurer may not seek equitable
contribution from sub‐contractor’s excess insurer following the insolvency of
sub‐contractor’s primary insurer because of lack of commonality of insureds.
Harrell v. Reliable Ins. Co., 258 Ill. App. 3d 728, 631 N.E.2d 296 (Ill. App. Ct.
1994). Plaintiff was injured when he was struck by a uninsured motorists.
Plaintiff was insured by Reliable Insurance Company, and his wife was
insured by Safeway Insurance Company. After their injuries, the plaintiffs
filed a declaratory judgment action against both Reliable and Safeway
seeking a determination as to how much each insurance company owed.
Both policies contained identical "other insurance" clauses. The trial court
determined that both companies were liable for identical amounts. Reliable
became insolvent after this finding. The Illinois Insurance Guaranty Fund
then intervened in the action and filed a complaint for declaratory judgment
arguing that Reliable no longer remained liable for their portion because
after insolvency the policy no longer constituted "other insurance." The trial
court granted the intervenor's summary judgment motion and found