Bonura v. United Bankers Life Ins. Co.

• Decision Date: 27 May 1987
• Docket Number: No. CW,CW
• Citation: 509 So.2d 8
• Parties: Carlo J. BONURA, et al. v. UNITED BANKERS LIFE INSURANCE COMPANY, et al. 86 1486.
• Court: Court of Appeal of Louisiana — District of US

Page 8

509 So.2d 8

Carlo J. BONURA, et al. v. UNITED BANKERS LIFE INSURANCE COMPANY, et al.

No. CW 86 1486.

Court of Appeal of Louisiana First Circuit.

May 27, 1987.

Writ Denied Sept. 25, 1987.

Jeff C. Calmes, Baton Rouge, for plaintiffs Carlo J. Bonura and Ann M. bonura.

Robert J. Vandaworker, Baton Rouge, for defendant Hill Country Life Ins. Co.

Charles W. Nelson, Jr., New Orleans, for Anthony G. Harris, Temporary Receiver of United Bankers Life Ins. Co.

Before GROVER L. COVINGTON, C.J., and LANIER and ALFORD, JJ.

GROVER L. COVINGTON, Chief Judge.

We granted writs in this case to determine jurisdictional questions, apparently of first impression.

This case arose from a claim for benefits under a policy of health and accident coverage issued to plaintiffs, Carlo J. Bonura and Ann M. Bonura (the latter is now deceased). The policy was issued by United Bankers Life Insurance Company, a foreign insurer authorized to do business in Louisiana, on November 21, 1980. ¹ On March 8, 1982, Mrs. Bonura was diagnosed as having infiltrating ductal carcinoma of the left breast. Although the record is unclear as to dates, the Bonuras thereafter filed periodic claims upon United Bankers for the costs of the treatment undergone by Mrs. Bonura. Coverage was denied on the basis that the cancer was a pre-existing condition. Sometime in October, 1982, United Bankers was placed in receivership in Texas. Thereafter, plaintiffs contend that the contractual liability of United Bankers was assumed by Hill Country Life Insurance Company, also a foreign insurer. Plaintiffs also filed claims for benefits with Hill Country, to no avail. This suit was filed on March 19, 1984.

Thereafter, plaintiffs added as defendants the temporary receiver in the Texas proceedings, Anthony G. Harris, and the Life, Accident, Health, and Hospital Service Insurance Guaranty Association ², an entity created by the Texas Insurance Code which plaintiffs assert "steps into the shoes" of insurance companies in receivership and assumes their liabilities under issued policies. Hill Country was dismissed with prejudice on the motion of plaintiffs, who reserved their rights against the remaining defendants.

The Texas Life Accident and Hospital Service Insurance Guaranty Association ("IGA") filed peremptory and declinatory exceptions raising the objections of no cause of action and lack of personal and subject matter jurisdiction, respectively. Harris excepted only as to subject matter jurisdiction. After a hearing on the exceptions, the trial judge denied them, stating: "Louisiana residents have the right to sue in Louisiana where an insurance policy was ... issued in Texas but delivered in Louisiana, and where the premiums are paid in Louisiana by Louisiana residents." We granted defendants' application for writs of certiorari to consider whether this state has jurisdiction over a Texas statutory entity and a Texas receiver in a claim by Louisiana residents against a foreign insurer, where that insurer has been placed in receivership in Texas, but not in Louisiana.

Subject Matter Jurisdiction

Both IGA and Harris contend that this court lacks jurisdiction over this matter because of the provisions of the Uniform Insurers Liquidation Act as adopted in Louisiana, La.R.S. 22:757 et seq., specifically, § 760(B). They argue that this statute requires that when no receivership proceedings have been initiated in Louisiana, residents of Louisiana must assert their claims in the proceedings of the domiciliary state of the foreign insurer--in this case, Texas.

Section 760, entitled "Claims against foreign insurers," provides as follows:

A. In a delinquency proceeding in a reciprocal state against an insurer domiciled in that state, claimants, against such insurer, who reside within this state may file claims either with the ancillary receiver, if any, appointed in this state, or with the domiciliary receiver. All such claims must be filed on or before the last date fixed for the filing of claims in the domiciliary delinquency proceeding.

B. Controverted claims belonging to claimants residing in this state may either (1) be proved in the domiciliary state as provided by the law of that state, or (2) if ancillary proceedings have been commenced in this state, be proved in those proceedings. In the event that any such claimant elects to prove his claim in this state, he shall file his claim with the ancillary receiver in the manner provided by the law of this state for the proving of claims against insurers domiciled in this state, and he shall give notice in writing to the receiver in the domiciliary state, either by registered mail or by personal service at least forty days prior to the date set for hearing. The notice shall contain a concise statement of the amount of the claim, the facts on which the claim is based, and the priorities asserted, if any. If the domiciliary receiver, within thirty days after the giving of such notice, shall give notice in writing to the ancillary receiver and to the claimant, either by registered mail or by personal service, of his intention to contest such claim, he shall be entitled to appear or to be represented in any proceeding in this state involving the adjudication of the claim. The final allowance of the claim by the courts of this state shall be accepted as conclusive as to its amount, and shall also be accepted as conclusive as to its priority, if any, against special deposits or other security located within this state.

[Emphasis added.]

We find Section 760 to be inapplicable here. This section does not stand alone in our statutes, but is one of the seven sections of Title 22 which comprise the Uniform Insurers Liquidation Law. As stated in Section 763, this law "shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states that enact it." [Emphasis added.] Each section contains one or more times the phrase "reciprocal state," which is defined in Section 757(7) as "any state other than this state in which in substance and effect the provisions of this law are in force, including the provisions requiring that the insurance commissioner or equivalent insurance supervisory official be the receiver of a delinquent insurer." As shown by the Table of Jurisdictions immediately following Section 757 in which the Act has been adopted, Texas is not a reciprocal state. Therefore, the provisions of the Uniform Insurers Liquidation Law, and specifically Section 760, cannot be applicable in this instance. See Martin v. General American Casualty Company, 226 La. 481, 76 So.2d 537 (1954).

However, two other sections of the Insurance Code do apply to this situation. La.R.S. 22:629 ³ provides that no insurance contract delivered or issued for delivery in this state which covers Louisiana residents may contain any provision which deprives the courts of this state of jurisdiction of action against the insurer. The jurisprudence construing and applying this statute is both consistent and too voluminous to require citation. Together, the statute and cases announce the unequivocal policy of this state that no foreign insurer may enjoy the benefits of a source of business in this state without being prepared to answer any claims based on that business by a Louisiana resident in the Louisiana courts. This policy comports with due process requirements and the insurer suffers no undue hardship thereby. We find no sufficient reason to abrogate that policy here.

Moreover, La.R.S. 22:1021 and 1022 ⁴ require that all foreign insurers deposit $20,000.00 in cash or U.S. bonds in a bank or savings and loan association...