Guidance for attorneys handling matters that involve an impaired or insolvent insurer or one of its insureds.
When an insurer becomes insolvent, applicable law may provide for a temporary stay of litigation involving the insurer, its insureds, or claims for which the insurer had a duty to provide a defense. The purpose of the stay is to allow the Receiver, Liquidator, and GIIP sufficient time to evaluate pending matters and determine the appropriate handling of covered claims.
The scope and duration of any stay are governed by applicable law and court orders. During the stay period, legal proceedings may be paused or restricted, depending on the circumstances of the case and the requirements established by the court. Parties involved in pending litigation should consult with their attorney regarding the effect of insolvency on their specific matter.
Legal fees and expenses incurred before an insurer is placed into liquidation or otherwise determined to be insolvent are generally not payable by the Georgia Insurers Insolvency Pool (GIIP). Parties seeking reimbursement for such amounts may need to file a claim with the Receiver or Liquidator administering the insolvent insurer's estate.
Fees and expenses incurred after the insolvency may be subject to GIIP review and approval. Unless expressly authorized by GIIP, post-insolvency legal fees and expenses may not be eligible for reimbursement.
GIIP will communicate with defense counsel regarding the continued handling of pending matters, including whether existing counsel will remain assigned to the case or whether files will be transferred to other counsel. In urgent situations requiring immediate attention, counsel should contact GIIP promptly for guidance and instructions.