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guaranty plan meets the technical requirements of the Act and to consider
whether the plan is in the public interest.
Discharge of Obligations
California
Illinois
Missouri
Rigney v. National Org. of Life & Health Ins. Guar. Assn’s, No. 102756 (Cal. Dist.
Ct. App. Nov. 4, 1997). Class action plaintiff who opted into enhancement plan
brought suit against NOLHGA and several guaranty associations alleging that
the guaranty associations did not fulfill their statutory obligations, and were
released from their obligations in violation of due process. The court dismissed
the action finding it improper both on procedural grounds and on the merits.
The court went on to conclude that the op‐in/opt‐out process more than
satisfied due process. The dismissal was affirmed on appeal with the court of
appeals going on to state that the plaintiff had failed to appeal the judgment
approving the rehabilitation plan and could not now challenge the Plan in
subsequent litigation.
Illinois Life & Health Ins. Guar. Ass’n v. Boozell, No. 96‐CH‐4219 (Ill. Cir. Ct. Nov.
22, 1996). District Court denied guaranty association petition for administrative
review of Illinois Insurance Department’s finding that participation in the
Executive Life Rehabilitation Plan did not fulfill the Association’s statutory
obligations. Court held that the Insurance Department’s decision was not
against manifest weight of the evidence in light of significantly lowered interest
rates and conditions limiting policyholder access to the funds under the Plan.
Because plan did not discharge statutory obligations, association was obligated
to pay benefits to policyholder who opted out of the plan.
Department of Mental Health v. Continental Sec. Life Ins. Co. v. Missouri Life &
Health Ins. Guar. Ass'n, 835 S.W.2d 349 (Mo. Ct. App. 1992). Although statutes
creating guaranty associations are to be liberally construed to protect against
insolvent insurers, courts may not construe the Association’s responsibility to be
anything beyond the clear wording of the legislative enactment.
Federal Jurisdiction – Standing
Fourth Circuit
North Carolina Life & Accident & Health Ins. Guar. Ass'n v. Alcatel Network
Systems, Inc., 876 F. Supp. 748 (E.D.N.C.), aff'd, 72 F.3d 127 (4th Cir. 1995) (Table
Decision). North Carolina Guaranty Association had no standing to assert ERISA
claims against pension plan trustees because it had not yet paid any benefits to
plan participants. Subrogation claim was not yet ripe.
Intervention
Supreme Court
Underwriters National Assurance Co. v. North Carolina Life & Accident & Health
Ins. Guar. Ass'n, 455 U.S. 691, 102 S. Ct. 1357, 71 L. Ed. 2d 558 (1982). North
Carolina Association which intervened in Indiana rehabilitation proceeding,
submitted itself to Indiana court's jurisdiction and participated in the drafting of
the rehabilitation plan was bound by Indiana court's ruling that the company,
not the Association, was entitled to deposit in North Carolina.
Maryland Maryland Life & Health Ins. Guar. Ass'n v. Perrott, 301 Md. 78, 482 A.2d 9 (1984).
Guaranty association has standing to intervene of right in receivership
proceedings to protect its rights; association must have access to information
necessary to fulfill its statutory duties.
Jurisdiction – Personal