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Since the plaintiff received an amount greater than the limit of the defendant’s
insurance policy limits, PPCIGA’s obligation for payment of the plaintiff’s claim
was extinguished.
Brostoski v. Lucchino, M.D., 2003 Pa. Super. 406, 835 A.2d 751 (2003). The
Pennsylvania Property Insurance and Casualty Guaranty Association (“PPICGA”)
assumed the obligations of Dr. Lucchino’s insolvent insurer. The medical
malpractice case settled for $35,000. PPICGA argued that its obligation should
be reduced to $29,308.15 to reflect an offset of monies that was paid on behalf
of the plaintiff’s health insurer. At issue was the non‐duplication of recovery
provisions of 40 P.S. § 991.1817. The court held that monies recovered by a
patient from his health insurance did not constitute an offset against the
amount payable by the PPICGA. It reasoned that the settlement monies
awarded to the plaintiff were for pain and suffering and not for his medical
expenses covered by his health insurer. Additionally, the plaintiff’s claim for
medical expenses had been withdrawn prior to settlement.
Commonwealth v. Guardian Fire Ins. Co. v. Pennsylvania, 65 Pa. Super. 208
(1916). Local agents, possessing premiums paid but not remitted to the
company before it was placed in receivership, could not set them off against
dividends on claims for return premiums due policyholders of which the agents
had become assignees.
Corrigan v. Methodist Hosp., 234 F. Supp. 2d 494 (E.D. Pa. 2002). In a
malpractice action the defendant’s primary malpractice insurer was declared
insolvent and the Pennsylvania Property Insurance and Casualty Guaranty
Association (“PPCIGA”) assumed its obligations. The defendants asserted that
pursuant to the PPCIGA Act (“Act”) they were entitled to an offset for the
amounts paid on behalf of the plaintiff’s workers’ compensation carrier
covering the plaintiff’s employment. The court stated that the Act does not
intend to place a claimant in the same position they would have been had their
insurance company remained solvent. Instead, the Act creates a way by which
limited recovery can be had when no recovery could have been possible due to
the insolvency. Consequently, the court found that where a claimant receives
insurance benefits under workers’ compensation, a court may shape the verdict
by applying the offset provision.
Cynthia Maleski, Insurance Commissioner of the Commonwealth of
Pennsylvania, as Liquidator of World Life and Health Insurance Company of
Pennsylvania v. Landberg, 93 Civ. 5318 Z(JSM), 1995 U.S. Dist. LEXIS 154. The
Pennsylvania Insurance Commissioner as Liquidator of World Life and Health
Insurance Company of Pennsylvania, commenced an action against parties
alleging fraud and unjust enrichment arising from a series of land
transactions by the defendants to World Life and its affiliates. The
defendants counterclaimed for amounts allegedly due them from World
Life’s corporate parent for the land transactions. The Commissioner moved
to dismiss the counterclaim on the ground that it should be adjudicated in
the Pennsylvania liquidation proceeding rather than in the federal court. The
motion to dismiss was granted on the basis of New York Insurance Law §
7412(a), that requires claims against the estate of an insolvent insurer to be
made either in an ancillary proceeding commenced in New York or in the
out‐of‐state liquidation proceeding. The court concluded from New York
case law that Insurance Law § 7412(a) bars counterclaims, as well as direct
actions, against an insurer undergoing liquidation in a jurisdiction other than
New York. To allow a counterclaim to go forward would afford the
defendants a preference over similarly situated creditors. Although the
court dismissed the counterclaim on the ground that the defendants could
not seek affirmative relief, it ruled that because the facts in issue in the
counterclaims were precisely those put in issue by the Commissioner’s