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Wetmore v. Scalf, 85 S.C. 285, 67 S.E. 298 (1910). Court conducting receivership
of insolvent South Carolina domestic mutual insurer had jurisdiction over all
members of the company to collect assessments, regardless of their residence.
Tennessee Flowers v. Tennessee Trucking Ass’n Self Ins. Group Trust, 209 S.W.3d 602, 2006
Tenn. App. LEXIS 251 (2006). Members of a self‐insured group trust were held in
civil contempt for their willful disobedience of a court ordered payment plan.
The members had objected to the initial assessment made by the Deputy
Liquidators and after a petition by the Liquidator to hold the members in
contempt for failure to pay, the members proposed payment plans which were
approved by the trial court. Despite the court ordered payment plan, the
members still failed to pay and the court held each nonpaying member in civil
contempt for willfully failing to comply with the court ordered payment plan.
Texas
Archie v. Knox, 224 S.W.2d 504 (Tex. Civ. App. 1949) writ ref. n.r.e. When the
receiver of a reciprocal insurance exchange sued the subscribers for an
assessment, the main issue was the question of calculation of the loss payable
reserve and whether that should be based on past loss experience or on a per
case basis in determining solvency. The court found that after the period when
the loss was incurred, the per case basis using actual facts should prevail over
historical experience. The assessment against the subscribers was proper.
Howell v. Knox, 211 S.W.2d 324 (Tex. Civ. App. 1948) writ ref. n.r.e. The
subscribers challenged the assessment receiver of a reciprocal insurance
exchange to recover an assessment against its subscribers. The subscribers
had contractually agreed to pay an additional premium as a contingent liability
for expenses, claims and reserves. The reciprocal was insolvent based on the
evidence that the balance sheet showed liabilities in excess of assets. The
action to levy an assessment was upheld.
Hurley v. Knox, 244 S.W.2d 557 (Tex. Civ. App. 1951), writ ref. n.r.e. When the
receiver of reciprocal insurance exchange brought suit against policyholder to
recover assessment the court held that judgment of receivership court which
fixes period of insolvency of insurer and amount of assessment is binding on all
who were subscribers of the exchange during the period involved.
Nichols v. Wheeler, 304 S.W.2d 229 (Tex. Civ. App. 1957), writ ref. n.r.e. More
than one year after automobile liability policy of mutual insurer had been
cancelled, a former policyholder received notice of assessment from the
receiver of the insurer who had been appointed subsequent to the
cancellation. It was held that the judgment of the receivership court
authorizing the assessment was not res judicata, since the notice provided was
not authorized by statute and former policyholder did not appear at hearing,
and that the 1955 amendment of a provision giving receiver four years
following order of rehabilitation to apply for assessment would not be given
retroactive effect.
Wilson v. Marshall, 218 S.W.2d 345 (Tex. Civ. App. 1949). When the receiver of
an insolvent insurance exchange filed a class action suit against the subscribers
of a reciprocal exchange, the defendant subscriber claimed res judicata based
on a prior settlement of another case. At the time of the earlier case, the
receiver did not know the full extent of subscriber liabilities. The court held
that the release in the earlier case was not a bar to this action.
Virginia Morrow v. Vaughn‐Bassett Furniture Co., Inc., 173 Va. 417, 4 S.E.2d 399 (1939).
A Virginia member of an insolvent Texas mutual insurer was assessed.
Although the Virginia resident was not a party to the Texas suit, the court held
that the assessment was valid as the Virginia resident was a party by