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Insurance Company, 560 P.2d 560 (Okla. 1977) no longer dispositive on the
priority of claims issue.
South Carolina South Carolina Property and Casualty Insurance guaranty Association v.
Carolinas Roofing and Sheet Metal Contractors Self‐Insurance Fund, 315 S.C.
555, 446 S.E.2d 422 (1994). Guaranty Association sought declaratory
judgment that it was not obligated to cover claim submitted by group selfinsurer.
The Supreme Court of South Carolina held that a group self‐insurer
that engages in a “kind of insurance” is an “insurer under the Guaranty Act
and therefore its claim, following insolvency of its catastrophic insurer, is not
covered by the act. The court reasoned that South Carolina defines
insurance as “a contract whereby one undertakes to indemnify another or
pay a specified amount upon determinable contingencies...” The court
noted that both the arrangement between the group self‐insurer and its
members, and between the group self‐insurer and its catastrophic insurer,
meet the aforementioned statutory definition of insurance. Furthermore,
the Guaranty Association was not estopped from denying partial payment of
the claim, in view of evidence that group self‐insurer repeatedly failed to
disclose relevant facts within its control to the Guaranty Association.
Tennessee McReynolds v. Cont’l Bankers Life Ins. Co., 1993 Tenn. App. LEXIS 465 (1993).
After insurance company was placed into receivership for purposes of
liquidation, the guaranty association filed a claim for administrative expenses.
Because the receiver approved only a portion of administrative expenses, the
guaranty association filed a claim with the chancery court to be paid in full.
While the claim was pending, the receiver filed a motion to authorize final
distribution which was later granted. Then the guaranty association filed a
second claim for expenses and was denied. The court held that the motion to
set aside judgment of the association was properly denied because the
guaranty association was not a party to an insolvency action of an insurance
company of which it claimed it had a right to notice and thus failed to establish a
right to notice.
Virginia
H. Bennet v. Virginia Life, Accident and Sickness Insurance Guaranty
Association, 251 Va. 382, 468 S.E.2d 910 (1996). Trustees for Dynamic
Systems, Inc. Savings Enhancement Plan filed a petition against the Virginia
Life, Accident and Sickness Insurance Guaranty Association (the
“Association”) for declaration that guaranteed interest contracts (“GICs”)
issued by a ember insurer were “annuity contracts” and entitled to coverage
under the Association when insurer became insolvent. The GICs purchased
by the trustees were neither issued to nor owned by individuals.
The Supreme Court of Virginia concluded that GICs with beneficial or
equitable owners were not policies protected by statute from insolvent
insurers because the GICs did not satisfy the “issued to” or “owned by” an
individual requirement of Va. Code § 38.2‐1700(c)(5) (1950), nor did they
provide annuity benefits to individuals.
The Uninsured Employer’s Fund v. Flanary, 27 Va. App. 201, 497 S.E.2d 912
(1998). Albert Flanary was originally awarded weekly compensation
disability benefits for 300 weeks. Upon a change in his condition, he was
awarded lifetime benefits. Mr. Flanary’s employer was required by statute,
Va. Code § 65.2‐801 (1950), to continually maintain liability insurance because
its employees were susceptible to pneumoconiosis. Both of the employer’s
insurance carriers became insolvent. The Virginia Property and Casualty
Insurance Guaranty Association became liable for “covered claims” against
Rockwood Insurance and the Uninsured Employer’s Fund became liable for
claims against the Coal Producers Group. Rockwood Insurance was solvent
when compensation was first awarded and paid its share of the original