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Carpenter Technology Corp. v. Admiral Insurance Co.6/17/2002
in a final adjudication of his claim against another guaranty association before recovering from PPCIGA). McMahon, in interpreting an analogous provision of Pennsylvania's insurance guaranty act, determined that because the plaintiff's claim had been denied by the guaranty association of the insured's residence (Texas), the plaintiff had satisfied his requirement to "exhaust first his right of recovery from the association of the place of residence of the insured." 40 Pa. Stat. Ann. ยง 991-1817(a). McMahon, however, is distinguishable from the instant matter because the guaranty association of the insured, PPCIGA, has not denied Carpenter's claims, but in effect has acknowledged an obligation to Carpenter by settling with it for an undisclosed sum.
D.
A few jurisdictions have decided questions pertaining to insurance guaranty associations. Although the facts in those cases are not analogous to the facts in this appeal, and therefore provide only limited guidance, they are useful in our analysis. Specifically, those cases demonstrate how the national network of insurance guaranty associations interacts to provide relief to claimants as well as to apportion equitably the risk among the guaranty associations. Moreover, in three of those cases the guaranty associations paid their statutory maximum obligation, suggesting, as noted below, that they paid their maximum because they recognized that was their obligation.
For example, in Moiser v. Oklahoma Property and Casualty Insurance Guaranty Ass'n, 890 P.2d 878, 879 (Okla. 1995), the plaintiff filed a products liability suit against two manufacturers. The plaintiff settled with one manufacturer for $30,000 and with the other manufacturer for $270,000. The insurer for the second manufacturer became insolvent and the $270,000 settlement remained unpaid. Under Oklahoma law the plaintiff was required to seek recovery first from the Texas Guaranty Association (TGA), the insolvent insurer's home state guaranty association. Ibid. At the time, the maximum recoverable amount by the plaintiff from TGA was $100,000. Id. at 879 n.1.
The plaintiff and TGA settled the claim for $75,000. Thereafter, the plaintiff filed a claim against the Oklahoma Property and Casualty Insurance Guaranty Association (OPCIGA) seeking $150,000 - the maximum recoverable under Oklahoma law.
The Oklahoma Court of Appeals determined that OPCIGA was entitled to offset its $150,000 obligation by TGA's statutory limit, $100,000, rather than the amount actually received by the plaintiff from TGA, $75,000. Id. at 879. Thus, the court "held that this amount [$150,000] must be reduced by the amount . . . could have been required to pay." Ibid. Because the TGA maximum was $100,000, OPCIGA's obligation "was reduced from $150,000 to $50,000." Ibid. OPCIGA sought review by the Oklahoma Supreme Court. Plaintiff did not and therefore the court did not review the appellate court's holding in respect of whether OPCIGA was entitled to offset its obligation to the plaintiff by TGA's statutory limit or the amount actually recovered by the plaintiff.
In Palmer v. Montana Insurance Guaranty Ass'n, 779 P.2d 61 (Mont. 1989), the Supreme Court of Montana held that the Montana Insurance Guaranty Fund (MIGA) was entitled to offset its obligation to the plaintiff by the maximum amount recoverable by the plaintiff from the Idaho Insurance Guaranty Fund (IIGF), the primarily-liable insurance guaranty association. Pointedly, the court observed that MIGA "was not adopted as a form of reinsurance for every insurer who becomes insolvent. Rather, it is clear the Association was established to soften resulting hardship which may be encountered, under limited circumsta
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