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Pennsylvania Lewycka v. Springfield Mutual Ins. Co., 201 Pa. Super. 341, 191 A.2d 925 (1963).
When garnishor obtained judgment before initiation of proceedings against
the insurer, the insurance commissioner could not obtain a stay of the
garnishment.
Texas
Virginia
Fidelity Group Co. v. LeBow, 107 S.W.2d 755 (Tex. Civ. App. 1937) writ dismissed
w.o.j. When law required that insurers maintain a deposit as trust funds for
policyholders and claimants of the insurance company, the question arose
regarding whether or not trust funds on deposit were exempt from
garnishment proceedings by a judgment creditor. The law requires that the
funds may be garnished by a designated creditor only after a final judgment
has been entered. When the insurance company becomes insolvent, the trust
funds become assets for the benefit of all creditors.
Universal Life Ins. Co. v. Binford, 76 Va. 103 (1882). Receivership proceedings
were started in New York against a New York insurer. Eight Virginia
policyholders sued to attach property of the insurer in Virginia, in order to
protect the obligations due them by the company when their policies matured.
Insured held that because company was insolvent at time the suit was filed,
plaintiffs were entitled to recover. Improvement of the company's financial
condition subsequent to the suit did not defeat policyholder's right.
Priorities ‐ Interstate Claimants
Illinois
Malicki v. Bulkley, 107 Ill. App. 595 (1903), affirmed 206 Ill. 249. Subsequent to
an Illinois court order placing the insurance company in receivership, a creditor
was awarded a judgment against the insurance company by the court of
another state. The Illinois Supreme Court affirmed the Appellate Court's
determination that the creditor was not entitled to any preferential interest in
a fund held by the initial receivers of the insurance company because the
creditor obtained the judgment after the company had been adjudged
insolvent and placed into receivership.
People v. Chicago Lloyds, 391 Ill. 492, 63 N.E.2d 479 (1945), reversed, Morris v.
Jones, 329 U.S. 545, rehearing denied, 330 U.S. 854. Disallowance in Illinois of
claim by Missouri claimant was proper because Missouri does not by statute
give that state's creditors priority in an insurer's property located in that state.
Iowa
Schloss v. Metropolitan Surety Co., 149 Iowa 382, 128 N.W. 384 (1910). The
court held that the rights of a foreign receiver to funds in Iowa are not
recognized if the result would be to relegate the domiciliary state's creditors to
whatever relief they could obtain in a foreign jurisdiction where there are in
state assets to satisfy claims.
Michigan Commissioner of Insurance v. Lloyd's Insurance Company of America, Inc., 287
Mich. 599, 288 N.W. 703 (1939). The Supreme Court of Michigan held that the
trial court abused its discretion in ordering the transfer of Michigan assets of
an insolvent New York corporation to the New York liquidator without first
having ascertained that the Michigan creditors would receive adequate
protection in a foreign jurisdiction.
Commissioner of Insurance v. National Life Ins. Co. of United States, 280 Mich.
344, 273 N.W. 592 (1937). Based upon the liquidation and dissolution
proceedings in Illinois, where a principal receiver of the insurance company
was appointed, and in Michigan, where an ancillary receiver was appointed,
the Illinois receiver, except by permission of the Michigan court, could not take
the company's property from Michigan. To protect the claim of the state of
Michigan for taxes, the Michigan court could impose conditions, including the