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the facts alleged in the complaint, the court felt there was enough evidence to
provide a defense to the motion to dismiss, and thus required the receiver to
answer the defenses to best determine whether the assessments were
proper.
Iowa
Corey v. Sherman, 164 N.W. 828, 96 Iowa 114 (1875). The insolvent insurer had
issued two kinds of policies, cash and assessment. The policyholders of
assessable policies claimed a 25% assessment was illegal. The court held that
the insolvent insurer was a validly organized as a mutual insurance company
and not a stock company and, thus, the cash policies issued by it were invalid
since only assessable policies were permitted to be issued by mutuals. The
court, however, upheld the assessment because the holders of assessable
policies had no reason to believe that the guaranty fund would be used to
relieve them permanently from their assessment obligations. However, the
assessments would not reflect the losses sustained under the invalidly issued
cash policies.
Sherman v. Frasier, 112 Iowa 236, 83 N.W. 886 (1900). A policyholder's defense
to an assessment was that the company's agent had misrepresented the
condition of the company. The court rejected this because the policyholder
had enjoyed the benefits of the insurance for six years. The policyholder was
stopped from alleging fraudulent misrepresentation.
Kansas
Herdman v. Eubank, 158 Kan. 224, 146 P.2d 387 (1944). In an action by an
assignee to collect an assessment on a policy issued by an insolvent mutual
company, the assignee did not sustain the burden of proving that the
assessment was made within one year after termination of the policy as
required by the insurance contract.
Keehn v. Stapleton, 161 Kan. 476, 169 P.2d 811 (1946). In an action against
former policyholders of an insolvent Illinois mutual insurance company to
recover assessments fixed by the Illinois court, the right to plead the Kansas
statute providing that no member shall be liable for any part of a contingent
premium in excess of the amount demanded within one year after termination
of policy, was a defense applicable to all Kansas policyholders, and applied
irrespective of the fact that the right to recover against Kansas policyholders
was thereby lost before the receiver took possession of the company for
liquidation.
Kentucky
Maine
Maryland
Allen v. Thompson, 108 Ky. 476, 56 S.W. 823 (1900); Enterprise Fire Ins. Co.'s
Receiver v. Enterprise Fire Insurance Co., 25 Ky. L. Rep. 1630, 79 S.W. 1180
(1904); Equitable Mutual Fire Ins. Corp. of New York's Receiver v. Murray, 131
Ky. 740, 115 S.W. 816 (1909); White v. Harbeson, 169 Ky. 224, 183 S.W. 475
(1916); Darnell v. Equity Life Ins. Co.'s Receiver, 179 Ky. 465, 200 S.W. 967
(1918); Providence Mining Co. v. Hind, 190 Ky. 445, 227 S.W. 789 (1921); Hind v.
Cook & Co., 220 Ky. 526, 260 S.W. 349 (1924). These cases all involve mutual or
cooperative insurance companies, and address the issues of liability for an
assessment, and where jurisdiction is proper to collect the assessment.
Pink v. Town Taxi Company, 138 Me. 44, 21 A.2d 656 (1941). A New York court
had jurisdiction over an automobile mutual indemnity company organized
under the laws of New York. It could determine the necessity of an
assessment against the policyholders and the amount of the assessment. A
policyholder could set up such personal defenses as non‐membership,
payment or limitations in a subsequent action brought against the policyholder
in a jurisdiction where the policyholder resided.
Joyce v. Abrams, 178 Md. 535, 16 A.2d 296 (1940). The court held that once a
receiver is appointed, the directors of a company are powerless to assess