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UCJF Fund. This dispute is currently pending decision from the New Jersey
Superior Court, Appellate Division. It has been consolidated with the below
referenced matter.
In the Matter of the Appeal by American Millennium Insurance Company
Regarding Its 2005 And 2006 UCJF Assessments, Order No. A07‐102 (State of
N.J., Dep’t of Banking and Ins. January 17, 2007). This dispute is currently
pending decision from the New Jersey Superior Court, Appellate Division. It
involves the same issues as the above mentioned dispute and has been
consolidated with it.
Keehn v. Laubach, 22 N.J. Misc. 380, 39 A.2d 73 (1944), appeal dismissed, 133
N.J.L. 227, 43 A.2d 857. The law of the domiciliary state governs as to the
validity of an assessment made in connection with the liquidation of an
insolvent mutual insurance company.
Matter of American Reliance Ins. Co., 251 N.J. Super 541, 598 A.2d 1219 (App. Div.
1991). Several New Jersey property and casualty insurance companies appealed
the New Jersey Property‐Liability Insurance Guaranty Association’s (“NJPLIGA”)
assessments under the Fair Automobile Insurance Reform Act (“FAIR Act”)
claiming the assessments were an unconstitutional taking and violated their
equal protection rights and due process rights. The court held that the act did
not violate the insurance companies’ constitutional rights. Specifically, it held
that imposition of assessments upon all the members of the NJPLIGA to create
revenue to pay for the New Jersey Full Insurance Underwriting Association
(“JUA”) did not damage the contractual right of the insurance companies.
Further, even if the companies contractual rights were impeded, it would be
justified because the Act focuses on an important public purpose. The court
noted that all insurers benefit from a stable insurance market and the plaintiffs
could not reasonably resist payment of the assessments because they might
not have derived a direct economic benefit.
Meley v. Whitaker, 61 N.J.L. 602, 40 A. 593, 68 Am. St. Rep. 719 (1898). The
promissor on a premium note was required to pay an assessment on the note
levied by the receiver of an insolvent insurance company where the
promisor‐insured had promised to pay the directors and the power of the
directors has passed, upon appointment, to the receiver.
New York
Beha v. Weinstock, 247 N.Y. 221, 160 N.E. 17 (1928), motion for reargument or to
amend remittitur denied, 247 N.Y. 584, 161 N.E. 191. The court concluded that
Section 63 of the Insurance Law of 1909 (now Section 7430) governs the
assessment by a liquidator of an insolvent insurance corporation. Section 346
of the same law (now Sections 4111 and 4114) governs assessments made by a
corporation as a going concern.
Conway v. North Side Lumber Co., 141 Misc. 231, 252 N.Y.S. 476 (1931). A cause
of action to recover assessments levied against policyholders of an insurance
company in liquidation accrues not when the company is ordered into
liquidation, but when the order is procured confirming the amount of the
assessment fixed by the insurance commissioner.
Conway v. Plank, 136 Misc. 403, 243 N.Y.S. 215 (1930). The court held that the
right of action to recover for an assessment made by the liquidator of a mutual
casualty insurance company did not accrue until the assessment was
determined and levied.
Dutchess & Columbia Co‐Operative Ins. Co. v. State, 43 A.D.2d 769, 530
N.Y.S.2d 766 (1973), aff’d 36 N.Y.2d 835, 370 N.Y.S.2d 907, 331 N.E.2d 686. The
provisions of the insurance code which provides for the judicial levy of