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Garamendi v. SDI Vendome, No. CV 02‐5983, 2003 U.S. Dist. LEXIS 13438 (C.D.
Cal. July 29, 2003) [modified, but not for this point]. Under California law, a
commissioner need not know specific facts necessary to establish a cause of
action for the statute of limitation to accrue. Suspicion of wrongdoing is
sufficient to start the statute running.
In re Imperial Ins. Co., 157 Cal. App. 3d 290, 203 Cal. Rptr. 664 (1984). The court
held that the deductibles paid to the insurers by policyholders, with respect to
claims against them, were held in trust for the insureds and were not available
to the insurance commissioner to satisfy the claims of the insurer's general
creditors. Furthermore, the court held that the deductibles were not merely
disguised premiums and that the guaranty fund was therefore entitled to the
deductibles in accordance with its statutory duty to administer the claims of the
insolvent companies insureds.
Sierra National Ins. v. Altus, No. CV 01‐01339, 2001 U.S. Dist. LEXIS 22301 (C.D. Cal.
June 20, 2001). Insolvent insurer and receiver brought suit against corporation
for fraudulently purchasing assets from the California Commissioner in
connection with another insolvency. Plaintiff was a rival bidder for the assets.
Defendants argued California law and federal preemption immunize them from
liability because all remedies must be brought under the insolvency statutes.
The court held Cal. Ins. Code § 12919 does not immunize a defendant from
liability for fraudulently inducing the commissioner to accept bids for assets of
insolvent insurer. While §12919 makes communications involving the
commissioner regarding a certificate or license under the code confidential and
prevents liability from attaching, it does not apply to false statements to the
commissioner by licensees and applicants about themselves. However, Cal. Ins.
Code § 47 prevented plaintiffs from pursuing state claims as the privilege
includes actions related to a judicial or quasi judicial proceeding
State of California v. Altus Finance, 36 Cal. 4th 1284 (Cal. 2005). Assets of an
insolvent insurer held by the Commissioner do not become part of the public
treasury, but are held in trust for the benefit of private parties.
Colorado Herstam v. Bd. of Dir. of Silvercreek Water Sanitation Dist., 895 P.2d 1131
(Colo. App. 1995). Insolvent Arizona life insurer’s security interest as deed of
trust beneficiary with regard to property in state was “asset” within
meaning of Insurers’ Rehabilitation and Liquidation Act and, therefore, was
subject to receivership. The fact that a deed of trust is a security interest,
rather than an ownership interest in real property, does not mean that it is
not an asset.
Connecticut
District of Columbia
Reliance Ins. Co. v. Ransom, No. CV030829611S, 2004 WL 3090643 (Conn. Super.
Nov. 29, 2004). Based on decisions from other states and the Model Insurers
Rehabilitation and Liquidation Act, a subrogation action brought by an insurer in
liquidation was time barred. The Connecticut limitations statute providing that
the liquidator may, upon or after an order for liquidation, within two years bring
an action on behalf of the insurer’s estate, only applies to actions brought by
the liquidator rather than suits brought by the insolvent insurer itself.
Consumers United Insurance Company v. Smith, et al., 644 A.2d 1328 (D.C.
1994). Consumers United Insurance Company (“CUIC”), a Delaware insurer
with its main office in the District of Columbia, sued its D.C. landlord in D.C.
Superior Court to rescind its lease, alleging asbestos issue. The landlord
countersued for rent and was awarded a judgment of $2.5 million. After the
landlord attempted to execute on the judgment, the Delaware Insurance
Department seized CUIC’s assets and obtained an injunction in Delaware
state court against further claims. The landlord ignored the Delaware