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ecover any assets of the insurer in receivership which could be reached under
New York law.
Levin v. Nat’l Colonial Ins. Co., 774 N.Y.S.2d 465 (N.Y. 2004). The court affirmed
a decision in favor of the insurer in liquidation and ordered that a trust fund
established by the insurer, which had been deposited in New York, be
transferred to the liquidator in Kansas, the insurer’s domiciliary state. The court
ruled that Kansas was the proper forum in which to adjudicate competing
claims to the trust remainder, citing the UILA’s goal of orderly and equitable
liquidation proceeding.
Matter of the Attorney‐General v. Atlantic Mutual Life Ins. Co., 100 N.Y. 279, 3
N.E. 193 (1885). The court held that the word "assets" was defined as all
property, real and personal of any company coming under the provision, and
that title to real or personal property immediately vested in the receiver so that
no conveyance to the receiver was necessary to effect transfer of title. The
court further held that any surplus remaining after the satisfaction of
obligations accrues to the receiver.
Matter of Nemerov, 149 Misc. 797, 268 N.Y.S. 588 (1933). Where a mortgage
company's agency was conditioned on continued performance of guaranties,
the agency did not in the event of a default upon the guaranty terminate
automatically. In the absence of an affirmative election to terminate the
agency, it continues to remain an asset of the guarantor and as such it is a part
of the assets to be taken over by the insurance commissioner as the
rehabilitator of the mortgage company.
New York Ins. Dept., Liquidation Bureau v. Generali Ins. Co., 844 N.Y.S.2d 13
(App. Div. 2007) After paying defense and settlement costs in the underlying
action, the liquidator of an insolvent insurer was entitled to recover half of
defense costs and indemnification costs from another insurer, although the
policy periods were discontinuous.
Ohio
Fabe v. American Druggist's Ins. Co., 70 Ohio App.3d 595 (1990). In American
Druggists', an insurance company acted as a surety by posting a bond to cover
the principal's Pennsylvania workers' compensation obligations. A letter of
credit ("Letter") was issued to secure the bond; it provided that funds not
applied to reimburse the surety's loss under the bond were to be returned to
the account of the principal. Consequently, the court held that any proceeds of
the Letter remaining after distribution were not assets of the liquidated surety.
Ratchford v. Proprietors' Ins. Co., 47 Ohio St.3d 1 (1989). The court held that in a
statutory liquidation of an insolvent insurance company, former Ohio Revised
Code Section 3903.07 authorized a court of common pleas to withhold approval
of the sale, by the statutory liquidator, of real property of the insolvent
company only where there is a finding of fraud or abuse of discretion on the
part of the liquidator.
Oklahoma
Cockrell v. Grimes, 740 P.2d 746 (Okla. App. 1987). The insurance commissioner,
as receiver of an insolvent carrier, was sued by an agent to secure payment of
commissions on renewal premiums for policies issued by the insolvent carrier.
In ordering payment of the commissions, the Court of Appeals of Oklahoma
opined that the language of the agent's contract with the carrier provided the
agent with a vested right to the commission portion of the premium collected
by the receiver. The court noted that, "protection of the policyholders of an
insolvent insurer may not be done at the expense of the vested property rights
of another private citizen." 740 P.2d at 749.