Download PDF - Goodmans

Florida
Florida Ins. Guar. Ass’n. v. Dolan, 355 So.2d 141 (Fla. Dist. Ct. App. 1978). The
insured gave the claimant an independent guaranty of payment of a judgment
and the court held the claim was no longer unpaid.
Massachusetts Ferrani v. Toto, 9 Mass. App. Ct. 483, 402 N.E.2d 107 (1980), aff’d, 383 Mass. 36,
417 N.E.2d 427 (1981). The purpose of requiring that a claim is unpaid is to
prevent duplicative payments.
North Carolina
Ruhlen Agency v. North Carolina Guar. Ass’n, (N.C. Gen. Ct. 1991). The insured
no longer had an unpaid claim when the agent reimbursed the insured.
Ohio P.I.E. Mut. Ins. Co. v. Ohio Guar. Ass’n, 66 Ohio St. 3d 209, 611 N.E.2d 313 (1993).
Where there were other insurers liable on the claim, payments by the two
solvent insurers rendered the claim paid and the solvent insurers were denied
recovery from the Association.
Covered Claim – Within the Coverage
Arkansas
Harold Ives Trucking Co. v. Pickens, 355 Ark. 407, 139 S.W.3d 471 (2003). The
Arkansas Supreme Court, as a matter of first impression, interpreted the
Property and Casualty Insurance Guaranty Act and held that an insured was an
“affiliate” of its parent corporation within the meaning of Act which defines
“covered claim” to exclude an unpaid claim if the aggregate net worth of the
insured or third party liability claimant and all of its “affiliates” as calculated on a
consolidated basis exceeds $50 million.
California Kortmeyer v. California Ins. Guar. Ass’n, 9 Cal. App. 4th 1285, 12 Cal. Rptr. 2d 71
(1992). A claim must meet the requirements of the policy’s coverage before it is
to be paid.
Illinois Illinois Ins. Guar. Fund v. Santucci, 384 Ill. App. 3d 927, 894 N.E.2d 801 (2008).
The Illinois Insurance Guaranty Fund’s obligation are limited to “covered claims”
under 215 Ill. Comp. State. 5/537.2, which include unpaid claims for a loss arising
out of and within the coverage of an insurance policy to which the Fund applies
and which is in force at the time of the occurrence giving rise to the unpaid claim
under 215 Ill. Comp. State. 5/534.3(a). Under these provisions, where an
individual is not the “person insured” under his insolvent insurance company’s
policy, the individual’s claim is not a covered claim for which the Fund is
obligated. Additionally, as a matter of first impression, the Fund is not bound by
assumption of defense without reservation of rights by an insurer on same day
the insurer is found insolvent. The Fund assumes policy obligations of insolvent
insurers only to the extent that those obligations are statutorily defined covered
claims.
Pennsylvania Univ. Health Services, Inc. v. Pennsylvania Prop. & Cas. Ins. Guar. Ass’n, 67 Pa. D.
& C. 4th 56, 2004 WL 1005011 (Pa. Com. Pl. 2004). University Health Services,
Inc. (“UHS”) had a claims‐made policy with PHICO Insurance Company
(“PHICO”) with a reporting tail option. The reporting tail option provided
coverage after the policy expired for claims‐made relating to events that took
place during the policy period. PHICO was declared insolvent and the
Pennsylvania Property and Casualty Insurance Guaranty Association (“PPCIGA”)
assumed PHICO’s coverage obligations. UHS received several claims that took
place during the policy period, but were not reported until more than thirty days
after the determination of PHICO’s insolvency. PPCIGA denied coverage of the
claims, reasoning that its obligations extended no further than claims that arose
within thirty days after the determination of the insolvency. The court found
that since the policy was a claims‐made policy, the occurrences happened
during the policy period, and prior to the insolvency, the claims were thus