Download PDF - Goodmans

of the company, and the estate of the policy beneficiary would be awarded the
actual cash value of the $5,000 as of the date of the insolvency of the
company.
Maryland
Minnesota
Md. Ins. Guar. Assn. v. Muhl, 66 Md. App. 359, 504 A.2d 637 (1986). State
guaranty fund was not barred from making reimbursement claims against the
insolvent insurer after the date specified in a court order as "the last date' for
filing claims. Thus, the guaranty fund was entitled to retain its statutory
preferred creditor status with regard to the assets of the insolvent insurer.
Gray v. Merriman, 56 Minn. 171, 57 N.W. 463 (1894). The court held that as the
policy had not matured as of the date of dissolution, the policyholder was only
entitled to share in the assets of the company as a member after the payment
of the company's debts and not as a creditor of the company.
New York In re Consolidated Indemnity & Insurance Co., 255 A.D. 501, 8 N.Y.S. 2d 217
(1938). The workers' compensation law states that a payment in whole or in
part of compensation award by an employer or an insurance carrier bars
recovery against the other. The court held that this could not be applied to
recovery after the carrier went into liquidation. The status of the claim on that
date fixed the claimant's rights to share in the distribution of the estate.
In re Lawyers Title & Guaranty Co., 266 A.D. 322, 42 N.Y.S.2d 177 (1943) appeal
denied, 268 A.D. 773, 50 N.Y.S.2d 172, appeal dismissed, 298 N.Y. 675, 56 N.E.2d
293. The court held that the date of the order of liquidation is the date of the
determination of the respective rights attaching to the guaranteed mortgage
participation certificates sold to the general public and certificates of the same
issue retained by the mortgage company and subsequently pledged as
collateral.
Matter of Lawyers Mortgage Co., 163 Misc. 680, 298 N.Y.S. 113 (1937). The
rights of creditors are fixed under the insurance law relating to rehabilitation,
liquidation, conservation, and dissolution of delinquent insurers and thus, a
plan of reorganization of a mortgage company in rehabilitation would not
affect the determination of creditors' claims in a subsequent liquidation
proceeding.
Pennsylvania Commonwealth v. State Ins. Co., 4 Dauph. 104, 25 C.C. 283, 10 Dist. 339 (1901).
The rights of all parties are fixed when the receiver of an insolvent corporation
takes possession of its assets. Each creditor becomes entitled to that portion
of the debtor's estate as the debt due the creditor bears to all of the debts.
Parties who are not creditors have no claim on the insolvent estate and cannot
acquire one by later becoming creditors.
South Carolina Parris v. Carolina Mutual Fire Ins. Co., 91 S.C. 344, 74 S.E. 1010 (1912). All
obligations of a mutual company and of its members become fixed on the date
the company is placed in the hands of a receiver, and a court taking charge of
the company through the institution of receivership proceedings is to enforce
these obligations and adjust all the equities of the parties.
Tennessee State ex rel. Williams v. Cosmopolitan Ins. Co., 217 Tenn. 8, 394 S.W.2d 643
(1965). The Tennessee Supreme Court found that some rights and liabilities
can be fixed at a date earlier than the decree ordering liquidation, which, in this
case, was the date of adjudication of insolvency by an Illinois court and an
order of rehabilitation. In this case, a general agent in Tennessee filed a claim
in Tennessee against an insolvent insurer for the agent's costs in obtaining
substitute coverage for the insurer's policyholders upon the agent's learning
that the company's authority to do business in Tennessee had been revoked.