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the tortfeasors to recover its payments. The court held that the employer
was not an insurer under the Connecticut Insurance Guaranty Association
Act, and therefore the employer’s claim was a “covered claim” within the
meaning of the Act. In so ruling, the court relied upon a 1983 NAIC Study
Committee Report permitting self‐insurers to recover from insurance
guaranty funds in certain circumstances.
Eastern Press, Inc. v. Peterson Eng. Co., Inc., No. 25 60 63, 1991 Conn. Super.
LEXIS 3002 (December 4, 1991). An insurance company may not exercise its
rights of subrogation against a defendant directly when the defendant's
insurer has become insolvent, because such action would be in contravention
of the general legislative intent to protect Connecticut residents from loss
associated with insolvent insurance carriers. The Connecticut Insurance
Guaranty Association ("CIGA") was created to provide a resource for persons
insured by or with claims against policies issued by an insurance company that
has become insolvent. The CIGA, which was intended to protect insolvent
insurers and their insureds, therefore provides a substantive alternative to
subrogation right which have been eliminated.
Massa v. American Mutual Ins. Co., No. 30 88 20, 1990 Conn. Super. LEXIS 104
(May 29, 1990). The entry of an insolvency decree "triggers" the obligations of
the various guaranty funds. The guaranty funds are thereupon obligated to
honor certain unpaid claims arising from the insurance policies of the insolvent
insurer, including claims for unearned premiums, subject to certain deductibles
and per‐claim limits which vary by state.
District of Columbia District of Columbia Insurance Guaranty Association v. Algernon Blair, Inc., 565
A.2d 564 (D.C. 1989). The District of Columbia Insurance Guaranty Association
is statutorily required to pay claims covered by a policy of an insolvent
Guaranty Association member where the claim arises from property located in
the District of Columbia. The D.C. Court of Appeals held that claims "arising
from" property permanently located in the District of Columbia included the
claimed losses of a nonresident contractor under surety bonds executed by an
insolvent Guaranty Association member on behalf of a subcontractor.
(Although excluded by the Guaranty Association Model Act, the D.C. Insurance
Guaranty Association Act covers surety business.) The contractor's losses
resulted from the subcontractor's failure to perform its contractual obligations
to the contractor at a construction project on land located in the District. The
court interpreted "claims arising from" as including claims substantially
connected with the contract work on another's property located in the District,
even if the property itself was not the insured object. Direct causation was not
required; it was sufficient that the loss would not have occurred but for the
contractor's participation in the project in the District of Columbia.
District of Columbia Insurance Guaranty Association v. National Railroad
Passenger Corporation, 721 F. Supp. 1378 (D.D.C. 1989), aff'd, App. D.C., 925
F.2d 488 (1991). Before the District of Columbia Insurance Guaranty
Association is statutorily required to pay claims under a policy issued by an
insolvent member, a claimant must exhaust his right to recovery under other
insurance policies covering the same loss. Any amounts recovered from the
other insurers will reduce the amount to be paid by the Guaranty Association.
Relying on the wording of the policies and the purposes of the District of
Columbia Insurance Guaranty Association Act, the U.S. District Court held that
the claimant had exhausted its right to recover under other insurance policies,
where insurers under those policies had paid their contractually‐determined
pro rata share of the claimant's losses in excess of primary insurance coverage
on a several but not joint basis. The court also held that because the primary
insurance policies covered a different loss than the excess policies (in that the
primary layer had to be exhausted before there was a loss under the terms of