Wells Fargo Bank v. California Insurance Guarantee Ass'n

Opinion

PARRILLI, J.

In this case we examine the specific terms of the insurance policies before us to determine whether a third level insurer “drops down” to assume the obligations of a second level insurer when the second level insurer becomes insolvent. We agree with the trial court that the third level policy incorporates an endorsement that unambiguously precludes it from “dropping down" to provide second level coverage upon the underlying insurer’s insolvency. Consequently, we affirm the summary judgment entered in favor of the insurer.

I. Facts

In 1985, 12 former managers who were fired…