Prudential Reinsurance Co. v. Superior Court

KLINE, J.,* Dissenting.

The majority’s allowance of setoff—which elevates the economic interests of reinsurers over the legislatively preferred and *1145equitably superior rights of policyholders, injured claimants and other creditors—results from a fundamental misunderstanding of the insurance insolvency statutes and contravenes clear legislative intent.

Permitting reinsurer setoff will result in the disallowance of many justifiable claims and have a ruinous effect on many individual policyholders, who reasonably believed they were protected against injury. As a consequence, policyholders, injured…