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Bills v. Arizona Property and Casualty Insurance Guaranty Fund2/2/1999
th claims against the Fund are governed by the same statutory set of rules. In the absence of the statutes, there would be no Fund and no cause of action against it. See T & N PLC, 800 F. Supp. at 1263 (guaranty fund "is a statutory entity that depends solely on the Insurance Guaranty Act for its existence and for a definition of the scope of its powers, duties and protections"); Isaacson.
Statutorily limiting the Fund's liability to the payment of "covered claims," as defined in the statutes, is neither arbitrary nor irrational. That limitation rationally furthers the state's legitimate interest in preserving the Fund's financial integrity. Attaining that goal, in turn, is important in view of the purpose behind the Fund's creation and continued existence: to provide some protection to an insured who, without fault, becomes uninsured because of his or her insurer's insolvency and to provide some source of compensation to persons who have been damaged by an insured. The statutes are designed to limit the Fund's financial liability while still affording some protection to an insured and some relief to injured victims in that situation.
Moreover, plaintiff postulates, without support in the record, that the Fund's member insurers structure their premiums so as to pass on their costs of contributing to the Fund to their policyholders. If that is true, the legislature might have intended to limit premium increases by prohibiting tort claims against the Fund. See Lerma (court may consider legislature's actual purpose or any hypothetical basis for enacting statute). The statutory mechanism for achieving these goals, although precluding the Fund's exposure to bad faith claims, has a rational basis and, therefore, does not infringe plaintiff's equal protection rights.
DISPOSITION
The trial court's partial summary judgment is affirmed.
JOHN PELANDER, Presiding Judge
CONCURRING: WILLIAM E. DRUKE, Chief Judge M. JAN FLOREZ, Judge
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