Multi-State insurance company insolvencies for the most part have been few and far between in the property & casualty insurance world for the past several years. However, on March 11, 2021 Bedivere Insurance Company was declared insolvent and ordered liquidated by a court of competent jurisdiction in Pennsylvania. The company (including the companies that merged into it prior to liquidation) was licensed in all fifty states, and presents us with an opportunity to remind those in the insurance & legal community of some basic provisions of state guaranty funds.

The various Guaranty Funds are created by statute and have statutory duties and obligations should a member insurance company be declared insolvent and ordered liquidated by a court, as was the case of Bedivere Insurance Company recently in Pennsylvania. The liquidation order with a finding of insolvency triggers the limited protection offered by the applicable Guaranty Fund.

What this basically means is that the Guaranty Association will respond to the timely filed claims of an insolvent insurance company, as there is both a final date set by the liquidation court for the filing of claims, (which in this case is December 31, 2021) and under the individual guaranty fund statutes (generally whichever is less, but there are some variations of what constitutes a timely filed claim by a state). In addition, there are further statutory provisions that one must be aware of should they be a policyholder or have a claim against a policyholder of the insolvent insurer, or the insurer themself (i.e. vendor claims).