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PA Supreme Court Ranks Subrogation Rights Arising Out of Insurer’s Liquidation.

October 15, 2009

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In the case of <i>Ario v. Reliance Insurance</i>, the PA Supreme Court was called upon to decide, under Section 544 of the Insurance Department Act, 40 P.S. § 221.44, what priority classification “ought to be assigned to a subrogation claim held by an insurance company against an insolvent insurer under the Act.” The court held, in a case of first impression, that subrogation claims should be assigned a section “g” classification, which puts the subrogating insurer seventh in line for payment. In other words, the subrogating insurer would likely have better luck getting blood from a stone.
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