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of the Court. The Special Deputy Insurance Commissioner (“Commissioner”)
made a motion to stay the proceedings and to transfer the funds to the
Commissioner for use as approved by the state receivership court. The
Court granted the Commissioner’s motions, holding that insolvency of the
title insurer’s agent warranted a Burford abstention by the federal court
because (1) the title insurer’s agent was in the business of insurance; (2) the
Court had been assured that potential state court review of the pending
action would be both timely and adequate; and (3) the Commissioner was
required by statute to take charge of the transferred funds.
Michigan
Calkins v. Green, 130 Mich. 57, 89 N.W. 587 (1902). Where the defendant took
out one of the certificates issued by the benefit association, payable six years
after date, according to the terms of which the society agreed to pay $1,200 on
the insurer's payments of assessments amounting to $432, in 72 monthly
payments, and the contract was fulfilled, and defendant paid, a receiver
appointed on the insolvency of the association could not recover the payment,
or any portion thereof, for the benefit of others whose certificates remained
unpaid, as the funds paid in did not become a trust fund to be held for all the
members.
Fletcher v. State Treasurer, 16 Mich. App. 87, 167 N.W.2d 594 (Mich. App. Ct.
1969). A trust deposit of securities made by a domestic casualty insurer was not
made for the benefit of a limited class of persons but was a general asset for the
benefit of all policyholders, including their judgment creditors and general
creditors.
Insurance Commission of Michigan v. Arcilio, 221 Mich. App. 54 (Mich. App.
1997). The Court of Appeals of Michigan explained that under MCL 500.8113
(1), a rehabilitator was authorized to take possession of the assets of the
insurer and to administer them under the court’s general supervision. The
court stated that “general assets” included “all property, real, personal, or
otherwise”. The court concluded that included in the insurers assets, was a
cause of action based in tort against a third party whose breach of the
appropriate standard of care was alleged to have defrauded the insurer and
its policyholders.
Whitaker v. Empire Mutual Fire Ins. Co. of Michigan, 262 Mich. 681, 247 N.W. 781
(1933). When a note secured by mortgage was deposited as capital stock in a
mutual insurance company which had no capital, but the evidence showed that
the deposit was made to remedy an inadequacy of the company's assets, the
deposit was to the general assets or working capital of the company and the
decree for its return by the receiver of the company was erroneous.
Mississippi
National Casualty Co. v. Hallam, 163 Miss. 164, 138 So. 572 (1932). When the
receiver of an insolvent company brought an action on fidelity bonds issued to
officers of the company in favor of the company, the court held that the
receiver could collect on the bonds on behalf of all the parties in interest, and
pay out the funds under the court's direction.
Missouri Angoff v. Holland‐America Company Trust, 969 S.W. 2d 351 (Mo. App. 1998).
The Receiver asked the circuit court to approve a plan for distribution
including statutory interest on claims allowed against the trust from the date
of liquidation through payment. The court approved the plan and the
holding company for the insolvent insurer appealed. The Court of Appeals
found it did not have jurisdiction to address the interest issue because the
order did not qualify as final and appealable and the appellant failed to file
the appeal within five days of the judgment as required by the Missouri
Insurance Code.