Liquidator May Not Use Assets from Insolvent Insurers’ Estates to Pay Certain Claims, Pa. Court Rules

HARRISBURG, Pa. — The Commonwealth Court of Pennsylvania has ruled en banc that state law bars the liquidator of two insolvent insurers from using assets from their estates to pay policyholder claims that exceed applicable statutory guaranty association limits and accrue more than 30 days after the policies were terminated by the liquidations.

In a Dec. 22 opinion, the court also rejected the liquidator’s argument that that the termination of a policy mandated by Sections 520 and 521 of Article V gives rise to a breach of contract claim entitled to class (b) priority, noting that damages for breach of …