Interstate Bankers Casualty Company
Interstate Bankers Casualty Company in Illinois was placed into liquidation effective August 19, 2015. The Illinois Insurance Guaranty Fund is now responsible for all obligations related to claims against Interstate Bankers insureds that had been pending. In terms of subrogation, the relevant portion of the Insurance Code states as follows:
(b) “Covered Claim” does not include…
(v) any claim for any amount due any reinsurer, insurer, insurance pool, or underwriting association as subrogated recoveries, reinsurance recoverables, contribution, indemnification or otherwise. No such claim held by a reinsurer, insurer, insurance pool, or underwriting association may be asserted in any legal action against a person insured under a policy issued by an insolvent company other than to the extent such claim exceeds the Fund obligation limitations set forth in Section 537.2 of this Code.
Subrogation is likely barred
This being the case, any claims against Interstate Bankers Casualty and their insureds that are pending should be dismissed and any claims not filed to date should not be pursued in court. It is possible to recover some or all of the insureds deductible by sending proofs of payment to the Guaranty Fund (as our office has begun to do in winding these suits down). Still, as the fund is created by and for such companies going out of business, and all carriers in the state pay into the Fund, subrogation is barred.
If you have any questions about Interstate Bankers Casualty Company, liquidation, or other pending claims, schedule a consultation with one of our Illinois subrogation lawyers.