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payment by the California Insurance Guarantee Association ("CIGA").
Argonaut Insurance Company ("Argonaut") sought reimbursement from a
tortfeasor's insurer of workers' compensation benefits paid by Argonaut to an
injured employee. When the tortfeasor's insurer became insolvent, CIGA
sought a declaratory judgment that it could not be required to reimburse
Argonaut, because California Insurance Code Section 1063.1 explicitly excludes
both claims of insurers and claims for subrogation from "covered claims"
which CIGA is required to pay. Relying on Burrow v. Pike, 190 Cal. App.3d 384
(1987), the trial court sustained a demurrer and dismissed CIGA's complaint on
the grounds that special policy considerations weighing in favor of the
reimbursement of workers' compensation benefits created an implicit
exception to the statutory exclusions. The Court of Appeal declined to follow
Burrow v. Pike, ruling that the definition of "covered claims" in Section 1063.1 is
unambiguous and therefore not susceptible to the creation of implicit
exceptions by judicial construction.
California Insurance Guarantee Assn. v. Workers Comp. App. Bd., No. B189208,
2006 Cal. App. Unpub LEXIS 11252 (Ct. App. December 14, 2006). UC Medical
center provided health care to disabled worker and filed a lien for
reimbursement with the Workers' Compensation Appeals Board (WCAB). The
worker’s compensation insurer became insolvent and WCAB sought to recover
the lien from CIGA. The Court held that a University of California lien is an
obligation to the state under Cal Ins. Code § 1063.1(c)(4) and thus CIGA is not
obligated to pay the lien as UC is an agency of the State of California.
California Insurance Guarantee Assn. v. Workers’ Comp. App. Bd., 112 Cal. App.
4th 358 (Ct. App. 2003). The court held that, under Cal. Ins. Code § 1063.1, CIGA
was entitled to credit for payments claimant received from underinsured
motorist benefits.
CD Investment Co. v. California Insurance Guarantee Assn., 84 Cal. App. 4th 1410
(Ct. App. 2000). Insured had five insurers; two became insolvent. Upon settling
a claim, the solvent insurers paid insured $500,000 towards the settlement and
insured paid the remainder include legal costs. Insured attempted to recover in
the insolvency proceedings and was rejected by CIGA on the grounds that the
amount sought, when combined with the amounts paid by the solvent insurers,
exceeded the $500,000 statutory cap. The California Court of Appeal held
where insured had multiple insurers, the statutory cap applied separately to
each policy.
Cole v. California Insurance Guarantee Association, 122 Cal. App. 4th 552 (Ct.
App. 2004). The California Court of Appeal held that Social Security Disability
Insurance (SSDI) and unemployment compensation insurance (UCI) benefits
should not offset insurance recovery when the insured’s disability was a
consequence of injury in the same accident.
In re Imperial Ins. Co., 157 Cal. App. 3d 290, 203 Cal. Rptr. 664 (1984). The court
held that the deductibles paid to the insurers by policyholders, with respect to
claims against them, were held in trust for the insureds and were not available
to the insurance commissioner to satisfy the claims of the insurer's general
creditors. Furthermore, the court held that the deductibles were not merely
disguised premiums and that the guaranty fund was therefore entitled to the
deductibles in accordance with its statutory duty to administer the claims of
the insolvent companies' insureds.
Parkwood Community Assoc. v. California Insurance Guarantee Association, 141
Cal. App. 4th 1362 (2006). Five subcontractors were insured by insolvent
insurer. CIGA assumed their defense for construction defects, which ultimately
was resolved by a settlement whereby payments were made to the injured