(Formerly Sec. 38-457) - Special claims.

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(a) Claims made under employment contracts by directors, principal officers, or persons in fact performing similar functions or having similar powers are limited to payment for services rendered prior to the issuance of any order of rehabilitation or liquidation pursuant to section 38a-915 or 38a-920.

(b) When a liquidation order has been entered in a proceeding against an insurer, any insured, reinsured, third party person who has a cause of action against an insured of the insurer, or any other person or entity that has a claim or cause of action against the insurer, shall have the right to file a claim in the proceeding, regardless of the fact that the claim may be contingent, unliquidated or immature. For purposes of this section: (1) A claim is contingent if the accident, casualty, disaster or loss insured or reinsured against occurred on or before the date fixed under section 38a-920 but the act or event triggering the insurer's obligation to pay has not occurred as of that date; (2) a claim is unliquidated if the amount of the claim has not been determined; and (3) a claim is immature if payment on the claim is not yet due.

(c) Except as provided in this section, a claim may not share in a distribution of assets pursuant to this chapter unless it has been definitely determined, proved and allowed. A contingent, unliquidated or immature claim may share in a distribution of assets provided, as of the time of the allowance or disallowance of the claim by the court: (1) If the claim was a contingent claim against the insurer as of the date established under section 38a-920, the claimant has presented proof of the insurer's obligation to pay reasonably satisfactory to the receiver; (2) if the claim was a contingent claim as of the date established under section 38a-920 and was based upon a cause of action against an insured of the insurer, (A) it may be reasonably inferred from proof presented upon the claim that the claimant would be able to obtain a judgment, (B) the person has furnished suitable proof, unless the court for good cause shown shall otherwise direct, that no further valid claims can be made against the insurer arising out of the cause of action other than those already presented, and (C) the total liability of the insurer to all claimants arising out of the same act shall be no greater than its total liability would be were it not in liquidation. In those cases under subparagraph (C) of this subdivision, insureds may include in contingent claims reasonable attorney's fees for services rendered after the date of liquidation, in defense of claims or suits covered by the insured's policy, provided the attorney's fees have been paid by the insured and evidence of payment is presented to the receiver; (3) if the claim was unliquidated as of the date established under section 38a-920, its amount has been determined, provided such determination does not prejudice the orderly administration of the liquidation proceeding; or (4) if the claim was immature as of the date established under section 38a-920, it shall be discounted at the higher of the legal rate of interest accruing on judgments or the rate of interest available on United States Treasury securities of approximately the same maturity.

(d) Notwithstanding the provisions of subsections (a) to (c), inclusive, of this section, any insured shall have the right to file a claim for the protection afforded under the insured's policy, irrespective of whether a claim is then known, if the policy is an occurrence policy. Thereafter, at such time that a specific claim is made by or against the insurer, the insured shall supplement his claim and the receiver shall treat the same as a contingent, unliquidated or immature claim. Any such claims of policyholders for the protection under an occurrence policy remaining at or near the closing of the estate shall be disposed of in accordance with section 38a-945.

(e) The estimation and allowance of a contingent claim under this section shall not provide a basis to compel payment from a reinsurer of estimated incurred but not reported losses and, except with respect to claims made under subsection (c) of section 38a-939, outstanding reserves, unless the reinsurance contract specifically provides for the payment of such losses or reserves.

(P.A. 79-382, S. 37; P.A. 98-214, S. 18; P.A. 17-15, S. 89.)

History: Sec. 38-457 transferred to Sec. 38a-939 in 1991; P.A. 98-214 deleted former Subsecs. (a), (b) and (c), redesignated former Subsec. (d) as Subsec. (a), added new Subsec. (b) re claims when a liquidation order has been entered, added new Subsec. (c) prohibiting a claim from sharing in a distribution of assets pursuant to chapter except as provided in section, added new Subsec. (d) allowing any insured to file a claim for protection offered under his policy, and added new Subsec. (e) providing that the estimation and allowance of a contingent claim under section shall not be a basis to compel payment from reinsurer of certain losses; P.A. 17-15 made a technical change in Subsec. (c).


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