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directly against manufacturer. The Court of Appeal held an employer providing
workers’ compensation benefits through self‐insurance was an insurer
providing “other insurance” under § 1063.1 and thus was not entitled to
compensation. The court also held the employer could not proceed against the
manufacturer as it would be an indirect conduit to indemnity it is not entitled to.
Colorado
Barr v. Colorado Ins. Guar. Ass’n and W. Guar. Fund Serv., 926 P.2d 102 (Colo.
App.1995). Under Colorado Insurance Guaranty Association (CIGA) Act,
“covered claim” is claim that should have been paid by insurer pursuant to
insurance policy but for insurer’s insolvency. Subject to statutory limits,
CIGA steps into insolvent insurer’s shoes as to claims within insurance
policy’s coverage and limits. CIGA was obligated to pay statutory limits for
only one claim on behalf of insolvent insurer, where policy clearly stated that
only single loss resulted from losses arising out of same wrongful act or
interrelated wrongful acts.
Colorado Ins. Guar. Ass’n v. Harris, 827 P.2d 1139 (Colo. 1992). Claimant’s
settlement for less than full amount of policy coverage did not preclude
further action against Association, because settlement for $2,500 less than
policy limit allowed claimant a greater recovery than if she arbitrated or
litigated uninsured motorist claim and received full policy amount but had to
pay attorney fees. Therefore, she had exhausted her rights as required
under C.R.S. § 10‐4‐512(1) and could assert a claim against the Colorado
Insurance Guaranty Association.
Fontenot v. Haight, 764 P.2d 378 (Colo. App. 1988). The guaranty insurance
association steps into shoes of insolvent insurance company as to claims
within coverage and limits of its insurance policy, subject to statutory
$50,000 maximum. Therefore, automobile accident victim who was
awarded judgment in excess of $145,000 against insured covered by
insolvent insurer was entitled only to statutory $50,000, because only one
covered claim was involved.
Mosley v. Indus. Claim Appeals Office, 119 P.3d 576 (Colo. Ct. App. 2005).
Mosley, a workers’ compensation insurance claimant whose employer’s insurer
became insolvent, sought penalties against the Colorado Insurance Guaranty
Association (“CIGA”) for its alleged misconduct in delaying payment of benefits
after the date of the insurer’s insolvency. The Colorado Court of Appeals held
that “the plain and unambiguous language of [COLO. REV. STAT.] § 10‐4‐517
provides absolute immunity to CIGA from liability of any kind for any action
taken by CIGA in the performance of its powers and duties, including the
handling of claims.” The court observed that this interpretation of the statute
“furthers, rather than hampers, the legislative purpose of § 10‐4‐502, which is to
avoid ‘excessive delay in payment and financial loss to claimants or
policyholders because of the insolvency of an insurer.’” To adopt Mosley’s view
would be directly contrary to the purposes of the CIGA Act, because “requiring
CIGA to pay penalties for post insolvency acts would result in increased
premiums for individual policyholders and depletion of CIGA funds to pay for
covered claims of all claimants whose insurers had become insolvent.”
Northwestern Nat. Ins. Co. v. Kezer, 812 P.2d 688 (Colo. App. 1990). The
Colorado statute classifying claims for preference purposes is specific,
comprehensive and leaves no room for the judiciary to add to the types of
claims to be preferred or to establish a method of preference not created by
statute. Where a reinsurance contract provides that the reinsurer would
become subrogated to "any and all rights of the insured in reference to any
and all payments [the reinsurer] made," the reinsurer does not attain the
status of the Guaranty Association and does not "step into the shoes" of the