APPELLATE COURT REJECTS REINSURER’S PRIORITY CLAIM TO ASSET DISTRIBUTION IN PRIMARY INSURER’S REHABILITATION PROCEEDINGS
In the course of Ideal Mutual Insurance Company’s rehabilitation proceedings, Allstate Insurance Company, one of Ideal’s reinsurers, objected to a referee’s report, which denied Allstate’s claim of a vested, and therefore priority, right to the distribution of assets, by retroactive application of a New York insurance statute. The trial court denied Allstate’s motion to reject the referee’s report. On appeal, the Appellate Division affirmed, disagreeing with Allstate’s reading of the applicable statute, which Allstate argued could not constitutionally be applied retroactively. The appellate court held that the statute could and should be applied retroactively, because the plain language indicated the legislature’s awareness that it would be so applied. In re Ideal Mutual Ins. Co., No. 40275/85 (N.Y. App. Div. March 15, 2011).
This post written by John Pitblado.
