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Guaranty Association (“NJPLIGA”) was entitled to receive because of the
Pennsylvania Property and Casualty Insurance Guaranty Association’s
(“PPCIGA") primary liability. The plaintiff had several actions filed against it and
sought coverage from its insurance companies, three of which became
insolvent. As a result, NJPLIGA and PPCIGA were added as defendants to the
action. The court held that NJPLIGA was entitled to a credit equal to the
statutory maximum amount payable by PPCIGA. It reasoned that the holding
was in conformity with the New Jersey Legislature’s intent in creating NJPLIGA
George Dapper, Inc. v. New Jersey Prop. Liab. Ins. Guar. Ass’n., 2008 WL
2445261 (N.J. Super. A.D. 2008) (Unpublished opinion). Dapper appealed from a
trial court order granting summary judgment to New Jersey Property‐Liability
Insurance Guaranty Association (“NJPLIGA”), the Appellate Court affirmed.
Legion Insurance Company had been declared insolvent in 2003 and NJPLIGA
assumed its obligations. NJPLIGA’s liability was capped at $300,000 and it was
required to reduce its coverage by the amount of uninsured motorist (“UM”)
coverage benefits received by the injured party. As a result, NJPLIGA was only
liable for $50,000 dollars. The Supreme Court held that NJPLIGA would no
longer be entitled to set‐offs against its cap and the UM benefits received by the
injured party. NJPLIGA argued that its obligation should be determined by the
state of law as of the date of the settlement. As a result, it argued the
calculation of $50,000 should not change. The Appellate court upheld this
argument that the settlements are not invalidated by subsequent changes in
the law.
Newman v. Hatfield Wire & Cable Co., 113 N.J. 484, 174A. 491 (1934). When a
insurance company's policies are canceled upon its insolvency, unearned
premiums paid on the policies are properly set‐off against the receiver's claims
for premiums due from an insured on other policies. However, an insured's
counterclaim for estimated damages it might have to pay its employees for
injuries sustained before the insurer's insolvency was properly stricken as
unliquidated and presently unprovable losses in an action by the insurer's
receiver for premiums due on policies other then those covering liability for
such damages.
Sheeran v. Sitren, 168 N.J. Super. 402, 403 A.2d 53 (Ch. 1979). The court held
that an agent‐broker of an insurance company in liquidation is required to
remit all earned premiums which in the ordinary course of business would have
been remitted to the company. Allowing the agent‐broker to keep the earned
premiums would be to the disadvantage of others. An agent‐broker, who was
neither a debtor nor a creditor of the liquidated insurer, but was rather an
agent of both the insured and insurer and a mere conduit for premium
payment and refunds, was not entitled to set off premiums which were
unearned against premiums earned by the insurer but not yet paid by the
agent‐broker, where the unearned premiums ultimately belonged to the
insured.
Tuttle v. State Mutual Liability Ins. Co., 2 N.J. Misc. 973, 127 A. 682 (1925). When
a mutual insurance company is liquidated, policyholders are entitled to a return
of unearned premiums, but the receiver should not permit a set‐off of such
claims against assessments levied or to be levied by the receiver.
New Mexico Aztec Well Servicing Co. v. Property & Cas. Ins. Guar. Assoc. of the State, 115
N.M. 475, 853 P.2d 726 (1993). Payment from primary insurer cannot be used
to offset pecuniary obligations of property and casualty insurance guaranty
association for insolvent excess insurer under the statute governing
nonduplication of recovery. This interpretation complies with the intent of
the Property and Casualty Insurance Guaranty Law, because the Law’s