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filed claims seeking recovery of their deferred compensation benefits as Class
3 claims under the liquidation provisions of the Iowa Code which are patterned
after the NAIC Model Act. In denying the claims, the Supreme Court of Iowa
found that the third‐priority status "is aimed at the insolvent insurance
company's obligation to its insureds and not to employee claims." 430 N.W.2d
at 422. The Court also found that the officers of the Company were prohibited
from invoking a second‐priority (claims of employees) status. The Court
concluded that the officers' deferred compensation benefits were Class 4,
general creditor claims.
State v. American Bonding & Cas. Co., 238 N.W. 726, 213 Iowa 200 (1931). An
insolvent Illinois insurer consolidated with a solvent Iowa insurer, which later
became insolvent. Creditors of the former Illinois insurer, who had not been
paid in full in the Illinois proceeding, filed for balances owed to them in the
second receivership in Iowa. The Iowa receiver argued that by filing their
claims in the Illinois receivership the claimants were now precluded from
relying on the Iowa company, although it was the successor company. The
Supreme Court of Iowa held that the creditors of the former Illinois insurer did
not waive their rights against the consolidated company. The consolidated
Iowa insurer assumed the liabilities of the Illinois insurer and thus took with it
notice of the claims of the creditors to the original deposits with the Iowa
commissioner.
Kansas
Bartee v. R.T.C. Transp., Inc. v. Kansas Fire & Cas. Co., 245 Kan. 499, 781 P.2d
1084. Automobile occupants injured in collision with truck sued driver and
owner of truck. Insurer of driver and truck became insolvent and Georgia
Insurers Insolvency Pool assumed defense. The court concluded that the
existence of a state insolvency fund for protection of its insureds did not
prevent a motorist from being uninsured. Therefore, plaintiffs are required
to exhaust their uninsured motorist coverage from their insurer before
insurer may enforce an obligation of the insolvency pool. Then the fund is
liable only for the difference between the limits of a plaintiff’s uninsured
motorist coverage and the limits of a defendant’s policy issued by the
insolvent insurer.
Hetzel v. Clarkin, 244 Kan. 698, 772 P.2d 800 (1989). An injured motorist
exhausts his rights under the uninsured motorist provisions of his insurance
policy, so as to be entitled to make claim against Guaranty Association,
whenever he makes a claim against his own insurer. However, the
motorist’s recovery from Guaranty Association is limited to the difference
between the Association’s liability limits and policy limits of the motorist’s
uninsured motorist coverage, regardless of the motorist’s good faith in
settling with uninsured motorist carrier for a sum less than policy limit.
Louisiana LeBlanc v. Bernard, 554 So.2d 1378 (La. App. 1st Cir. 1989), writ denied, 559
So.2d 1357 (La. 1990). Plaintiff sold immovable property to an individual who
immediately transferred the property to Commonwealth Securities
Corporation ("Commonwealth"), which was wholly owned by the purchaser.
The Act of Sale recited that the purchase price had been paid in full.
Thereafter, Commonwealth was placed in liquidation. Plaintiff sued for
dissolution of the sale for the failure of purchaser to pay the purchase price, a
fact which was not disputed by the liquidator at trial. Plaintiff claimed that the
liquidator stood in the shoes of the buyer/transferee and was therefore
charged with knowledge that the purchase price had not been paid. The Court
relied upon the comprehensive and exclusive statutory scheme developed for
insurer insolvencies and held that the liquidator did not stand in the shoes of
the insurer for all purposes. Accordingly, in furtherance of his statutory duty to
marshal all assets of the insolvent's estate for the benefit of the public, the