State Ex Rel. Neidig v. Superior National Insurance

This ancillary receivership action concerns a $10.6 million deposit that an insurance company made with the Department of Consumer and Business Services (DCBS). The case presents the issue whether DCBS may use the statutory deposit of one insurer to satisfy the statutory liabilities of another insurer that has become insolvent. Our resolution of that issue in this case requires us to consider three legal questions: first, whether an insurer that indirectly reinsures another insurer — by reinsuring the insurer’s direct reinsurer and therefore acting as a “second-level” reinsurer — is a…