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policies were delivered, the state where the insured was incorporated and the
state where the policies were negotiated, rather than Missouri, where the
insurer was in receivership, govern the receivership court’s allocation of
asbestos‐related claims against insured amongst the policies. Under
Pennsylvania law, the “all sums” method was a proper method by which to
allocate among excess liability policies. Further, the court held that insurance
insolvency statutes prevail over any general statutes or common law; however,
where the insurance insolvency code is silent, courts apply the general statutes
and common law.
New Jersey
Failach v. New Jersey Prop. Liab. Ins. Guar. Ass’n, 2007 WL 2262907 (App. Div.
2007) The defendant, the New Jersey Property‐Liability Insurance Guaranty
Association (“NJPLIGA”), appealed a summary judgment order holding
NJPLIGA liable and stating the co‐defendant, Allstate, did not owe the plaintiff
underinsured motorist (“UIM”) benefits or personal injury protection (“PIP”).
Plaintiff was insured by a company who went insolvent after the plaintiff
presented UIM and PIP benefit claims to it. The plaintiff’s father had a policy
with Allstate, but on a different car than the plaintiff was in when the accident
occurred. NJPLIGA argued that the plaintiff must first exhaust Allstate’s policy
before NJPLIGA pays. This argument was denied by the court. The court
reasoned that at the time of the accident, plaintiff was covered by the insolvent
insurer’s policy. Since the company was declared insolvent, NJPLIGA was
deemed the insurer under the NJPLIGA Act and had the responsibility to pay,
subject to the statutory limits on NJPLIGA’s liability amount.
Hudson Env’t. Services, Inc. v. New Jersey Prop. Liab. Ins. Guar. Ass’n, 372 N.J.
Super. 284, 858 A.2d 39 (Law Div. 2004). The insured had a policy with an insurer
that was declared insolvent. The insured brought an action against the New
Jersey Property‐Liability Insurance Guaranty Association (“NJPLIGA”) seeking a
declaratory judgment that NJPLIGA must pay for past and future environmental
clean‐up costs associated with the covered claim. At issue was whether
NJPLIGA had immunity from causes of action, alleging that NJPLIGA acted in
bad faith in processing and/or paying the insurance claim under an insolvent
insurance company’s policies. The court held that NJPLIGA was immune as a
matter of law under the Guaranty Association Act and the immunity only affects
potential liability outside the obligation to pay covered claims, such as
negligence in claims adjustment, processing, and payment.
In the Matter of the Liquidation of Integrity Insurance Company, 231 N.J. Super.
143 (Ch. Div. 1988). Integrity's creditors sought a policyholders' committee to
enable the policyholders to protect their interests in the liquidation of the
company. The policyholders claimed that they had not been informed as to
the progress of the liquidation nor had they been given the opportunity to
participate in negotiations and were unaware of the status of commutations.
The court held that it is empowered and authorized to create a policyholders'
committee pursuant to its equitable powers as a Chancery Court and the
Uniform Insurers Liquidation Act. The court, however, concluded that
policyholders had no right to notice of all the proceedings regarding the
liquidation of Integrity under the Uniform Insurers Liquidation Act. Moreover,
the court concluded that the creation of a policyholders' committee would
inevitably result in the inefficient administration of the Integrity estate,
increased litigation, depletion of the assets of Integrity's estate and would
have an adverse impact upon the interests of all other creditors. Thus, the
court denied the motion to appoint a policyholders' committee.
Newman v. Hatfield Wire & Cable Co., 113 N.J. 484, 174 A. 491 (1934). When an
insurance company's policies are cancelled upon its insolvency, unearned
premiums paid on the policies are properly set‐off against the receiver's claims
for premiums due from an insured on other policies. However, an insured's