1996 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

1-18-1996

H. K. Porter Co., Inc. v. Pennsylvania Ins. Guar.

Assn.

Precedential or Non-Precedential:

Docket 95-3182

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Recommended Citation

"H. K. Porter Co., Inc. v. Pennsylvania Ins. Guar. Assn." (1996). 1996 Decisions. Paper 249.

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1 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

 

No. 95-3182 

 

H. K. PORTER COMPANY, INC., a Corporation 

 Appellant

v. 

PENNSYLVANIA INSURANCE GUARANTY ASSOCIATION, 

an unincorporated association 

 

On Appeal from the United States District Court 

for the Western District of Pennsylvania 

(D.C. Civil No. 93-0212) 

 

Argued October 30, 1995 

BEFORE: NYGAARD, ALITO and 

SAROKIN, Circuit Judges 

 

(Opinion filed January 18, 1996) 

 Frederick J. Francis (argued) 

 Meyer, Unkovic & Scott 

 1300 Oliver Building 

 Pittsburgh, PA 15222 

 Attorneys for Appellant

 John W. Jordan IV (argued) 

 Gaca, Matis & Hamilton 

 300 Four PPG Place 

 Pittsburgh, PA 15222 

 

 Attorneys for Appellee
2 

 

OPINION OF THE COURT 

 

SAROKIN, Circuit Judge: 

 Plaintiff H.K. Porter Company, Inc. ("Porter") filed suit in 

federal district court against the Pennsylvania Insurance 

Guaranty Association ("PIGA") seeking a declaration that PIGA was 

legally obligated to indemnify Porter under the terms of three 

insurance policies issued to Porter by an insolvent insurance 

company. Porter claimed that each of the approximately 100,000 

lawsuits filed against it constitutes a separate "covered claim" 

for which Porter is entitled to the statutory limit of $300,000 

on each claim, subject to the $5 million coverage limit of each 

policy. The district court entered an order for partial summary 

judgment in favor of PIGA, holding that Porter was only entitled 

to indemnity for three covered claims -- one for each policy that 

Porter held with the insolvent insurance company -- on the theory 

that Porter, rather than those claiming against it, was the 

claimant. We disagree and reverse. 

I. 

 Beginning in 1958, H.K. Porter was engaged in the 

manufacture and sale of various types of asbestos-containing 

products. These products were sold for use in shipyards and the 

ship-building industry across the country and around the world. 
3 

 In 1984, Porter began to be inundated with lawsuits by 

individuals alleging bodily injury or death as a result of 

exposure to asbestos-containing products. By 1991 Porter was 

being sued at the rate of approximately 2,000 separate cases per 

month. The sheer volume of these lawsuits eventually forced 

Porter into Chapter 11 bankruptcy, by which time there had been 

approximately 100,000 lawsuits filed against Porter. Porter 

settled or disposed of many of these claims through payment of 

$30 million of its own funds. At the time of the bankruptcy, the 

estimated value of identified pending lawsuits against Porter was 

approximately $590 million. 

 During its operational years, Porter had maintained several 

different insurance policies, including three "commercial 

catastrophe liability" policies issued by Integrity Insurance 

Company. These policies had indemnity limits of $5 million per 

occurrence/$5 million annual aggregate, resulting in a total 

aggregate of $15 million under the three policies. All parties 

agree that the policies cover liability and indemnity for bodily 

injury arising from Porter's manufacture and sale of asbestos 

products. 

 When the flood of lawsuits began in the late 1980s, Porter 

sought indemnity from Integrity for all amounts which Porter had 

paid in the process of settling lawsuits or would become legally 

obligated to pay in the future. In March of 1987, however, 

Integrity Insurance Company was declared insolvent. Porter thus 

turned to PIGA for indemnity. PIGA is an unincorporated 

association created by statute for the purpose of providing means 
4 

for payment of covered claims when the insurance company 

responsible for those claims has become insolvent, and for the 

purpose of avoiding financial loss to claimants and policy 

holders. See 40 P.S. § 1701.102(1) (repealed 1994).1

 PIGA persistently refused to indemnify, defend, or in any 

way become involved in Porter's asbestos lawsuits, despite 

Porter's continual requests starting in 1987. As a result, 

Porter filed suit against PIGA on February 12, 1993, seeking a 

declaration that PIGA could be required to pay Porter up to $15 

million -- the $5 million aggregate limit for each of the three 

Integrity policies -- as well as counsel fees and expenses for 

the defense of the lawsuits.2

 The parties filed cross motions for summary judgment. One 

of the issues presented in the motions was whether the $299,900 

statutory limit3 set forth in section 201 of the PIGA Act for 

each "covered claim" applied to three claims (one claim 

supposedly made by Porter under each Integrity policy), or 

 

1The PIGA Act was repealed on December 12, 1994, see 1994, Dec. 

12, P.L. 1005, No. 137, § 2, and replaced by the Pennsylvania 

Property and Casualty Insurance Guaranty Association Act, 40 P.S. 

§ 991.1801 et seq. The PIGA Act, however, applies in the instant 

matter. 

2Porter has already paid approximately $30 million to defend and 

settle lawsuits thus far, $18 million of which was for the cost 

of defense, and the remaining $12 million for the actual 

disposition and settlement of the claims. See H.K. Porter 

Company, Inc. v. Pennsylvania Insurance Guaranty Association, No. 

93-212, typescript at 2 (W.D. Pa. Jan. 3, 1995); Appellant's 

Brief at 2. The issue of whether PIGA must indemnify Porter for 

the $18 million dollars it paid for the defense of lawsuits is 

before the district court and not at issue in this interlocutory 

appeal. 

3The statutory limit is actually $300,000, subject to a $100 

deductible. See 40 P.S. § 1701.201(b)(1)(i). 
5 

whether it applied to each separate, individual claimant lawsuit 

submitted by Porter to PIGA. This section provides, in relevant 

part, as follows: 

(1) The association shall: 

(i) Be obligated to make payments to the extent of the 

covered claims of an insolvent insurer existing prior 

to the determination of said insurer's insolvency, and 

covered claims arising within thirty days after the 

determination of the insolvency, or before the policy 

expiration date if less than thirty days after such 

determination . . . but such obligation shall include 

only that amount of each covered claim which is in 

excess of one hundred dollars ($100), and is less than 

three hundred thousand dollars ($300,000). In no event 

shall the association be obligated on a covered claim 

in an amount in excess of the obligation of the 

insolvent insurer under the policy under which the 

claim arises. 

40 P.S. § 1701.201(b)(1)(i). 

 The district court held that the $299,900 statutory limit 

applied to each of the three claims it determined Porter had made 

(one under each of the Integrity policies), for a total maximum 

recovery of $899,700, far below Porter's $15 million indemnity 

claim against Integrity. H.K. Porter Company, Inc. v. 

Pennsylvania Insurance Guaranty Association, No. 93-212, 

typescript at 11-12 (W.D. Pa. Jan. 3, 1995). 

 Porter filed a Motion for Reconsideration, but the district 

court denied the motion. Porter then filed a motion requesting 

that the district court amend its Order regarding the statutory 

limit to acknowledge the existence of a controlling question of 

law as to which there is substantial ground for difference of 

opinion, which was granted. Subsequently, Porter filed a 

Petition for Permission to Appeal from an Interlocutory Order, 
6 

pursuant to 28 U.S.C. § 1292(b). This court granted Porter's 

Petition, and we now decide this appeal. 

II. 

 The district court had jurisdiction over the instant action 

under 28 U.S.C. § 1334(b), which provides federal district courts 

with original and exclusive jurisdiction over all cases under 

Title 11 of the United States Code. This court has jurisdiction 

pursuant to 28 U.S.C. § 1292(b). Our review of a grant or denial 

of summary judgment by the district court is plenary. See Rappa 

v. New Castle County, 18 F.3d 1043, 1050 (3d Cir. 1994). 

III. 

 In November of 1970, Pennsylvania adopted the Pennsylvania 

Insurance Guaranty Association Act in order to provide insurance 

policy holders with a means to receive payment of claims covered 

against insolvent insurance companies. 40 P.S. § 1701.102(1). 

The Act and the statutory creation of PIGA were based on a model 

bill created by the National Association of Insurance 

Commissioners in response to the social harm that results from 

insurance companies becoming insolvent. See Sands v. 

Pennsylvania Insurance Guaranty Ass'n, 423 A.2d 1224, 1225-26 

(Pa. Super. Ct. 1980). 

 One of the stated purposes of Pennsylvania's Act is: 

(1) To provide a means for the payment of covered 

claims under certain property and casualty insurance 

policies, to avoid excessive delay in payment of such 

claims, and to avoid financial loss to claimants or 
7 

policyholders as a result of the insolvency of an 

insurer. 

40 P.S. § 1701.102(1). 

 Under section 201 of the Act, PIGA is obligated to make 

payments for each "covered claim" against the insolvent insurance 

company, subject to a $299,900 statutory limit per "covered 

claim." 40 P.S. § 1701.201(b)(1)(i). In no instance is PIGA 

obligated to pay a covered claim in excess of the maximum amount 

the insolvent insurance company would have paid under the terms 

of the policy. Id. 

 The resolution of this case rests on the determination of 

what, exactly, constitutes a "covered claim." The Act defines it 

as follows: 

"Covered claim" means an unpaid claim, including a 

claim for unearned premiums, which arises under a 

property and casualty insurance policy of an insolvent 

insurer and is: 

(i) The claim of a person who at the time of the 

insured event resulting in loss or liability was a 

resident of this Commonwealth, or 

(ii) A claim arising from an insured event 

resulting in loss or liability to property which 

was permanently situated in this Commonwealth. 

40 P.S. § 1701.103(5)(a). 

 The district court concluded that the "covered claims" for 

which Porter was entitled to indemnity from PIGA included only 

one claim under each Integrity policy, for a total of three 

claims. H.K. Porter v. PIGA, No. 93-212, typescript at 11-12. 

The district court's rationale focused upon the word "person" in 

the phrase of the statutory definition of "covered claim" which 

reads: "'Covered claim' means . . . [t]he claim of a person who 
8 

at the time of the insured event resulting in loss or liability 

was a resident of this Commonwealth." 40 P.S. §1701.103(5)(a)(i) 

(emphasis added). The district court noted that under the 

statute "person" is defined as "an individual, a corporation, a 

partnership, an association, or any other holder of or claimant 

under a property and casualty insurance policy." H.K. Porter v. 

PIGA, No. 93-212, typescript at 11 (citing 40 P.S. § 

1703.103(8)). The court thus concluded that by "[a]pplying that 

language to the claims of Porter, it is clear that the claims at 

issue are the claims of a person (Porter) for indemnification 

under the three Integrity policies," H.K. Porter v. PIGA, No. 

93-212, typescript at 11, and therefore Porter is limited to 

indemnification for only $899,700, or $299,900 for each of the 

three Integrity policies. 

 Upon Porter's Motion for Reconsideration of this 

determination, the Court succinctly clarified its position as 

follows: 

This Court is aware that "person" is defined by statute 

as, among other things, a holder of or claimant under a 

property and casualty insurance policy. However, that 

is not the issue. The issue is who is the "person" 

making the claim in this case. Clearly, the "person" 

making the claim in this case is Porter. . . . 

* * * 

[T]he clear language of the PIGA Act dictates that the 

covered claim is the claim of Porter for 

indemnification. We find no support in either the 

statute or the case law of this jurisdiction for 

Porter's assertion that its claims somehow encompass 

the claims of the underlying asbestos claimants. We 

believe that the reading of such a concept into the 

statute would violate the clear and express language of 

the Act. 
9 

H.K. Porter v. PIGA, No. 93-212, typescript at 4-5 (W.D. Pa. Feb. 

9, 1995). 

 Porter submits that the "salient question is not whether 

Porter has 'covered claims' within the meaning of the PIGA Act, 

but how many covered claims Porter is able to assert." 

Appellant's Brief at 18 (emphasis in original). We agree. 

 The district court's analysis appears to rest on the faulty 

premise that if the insured submits numerous claims of others, 

such claims are to be treated as one covered claim per policy. 

Such a position, however, is untenable. As clearly illustrated 

by an analogy presented to the district court by Porter, there 

are circumstances in which one person is entitled to receive 

indemnity for more than one covered claim per policy: 

Let's suppose, Your Honor, that you, yourself, are 

insured with Acme Automobile Insurance Company and 

that, unfortunately, in one month you have two separate 

accidents, each magically causing a $300,000 damage to 

each victim in each accident. Two lawsuits arrive at 

your house on the same day. You tender them to your 

insurance company. But on the same day your insurance 

company goes insolvent. So you tender them to PIGA. 

* * * 

Now, let's suppose that . . . PIGA does not step up to 

the plate to defend Your Honor and to indemnify Your 

Honor. . . . Your Honor then is left at the plate. Your 

Honor will have to reach into your pockets to pay each 

$300,000 claim. Now Your Honor is out $600,000 and 

Your Honor files a lawsuit against PIGA. Under Your 

Honor's construction of the statute, you would only be 

entitled to $300,000. But aren't the two claims that 

Your Honor has presented to PIGA separate covered 

claims? If they are separate covered claims and if 

PIGA has to pay out $300,000 on each claim, it doesn't 

make sense to reward PIGA for refusing to pay each of 

those claims, wait for PIGA to be sued, and then for 

PIGA to assert in the lawsuit that Your Honor brought, 
10 

ah ha, there is only one covered claim here because 

Your Honor is the "person" who's making the claim. 

Appendix at 145-46. Unlike the district court, we find this 

analogy instructive and persuasive. 

 Accordingly, we reject the district court's conclusion that 

the PIGA Act only allows insureds to receive indemnity for one 

covered claim per policy. Rather, we conclude that the PIGA Act 

must be read to provide insureds with indemnity for each claim 

raised by underlying claimants. Each "covered claim" to which 

the $299,900 statutory cap applies is appropriately read to 

encompass the claims of the underlying tort victims, i.e. the 

underlying claimants. There are four bases upon which we reach 

our conclusion. 

 First, contrary to the district court's conclusion, the 

plain language of the PIGA Act militates that the "covered 

claims" to which the statutory cap applies include the claims of 

underlying claimants. Under the PIGA Act, a "covered claim" is 

"[t]he claim of a person who at the time of the insured event 

resulting in loss or liability was a resident" of Pennsylvania. 

40 P.S. § 1701.103(5)(a)(i) (emphasis added).4 A "person" is 

defined as "an individual, a corporation, a partnership, an 

association, or any other holder of or claimant under a property 

and casualty policy." 40 P.S. § 1701.103(8) (emphasis added). 

Therefore in Pennsylvania a "covered claim" for which PIGA must 

pay up to $300,000 is: 

 

4There is an additional debate as to whether PIGA must pay the 

underlying claims of asbestos victims who are not residents of 

Pennsylvania. That issue is not before us on this appeal and we 

do not address it here. 
11 

The claim of a [holder of or claimant under a property 

and casualty insurance policy] who at the time of the 

insured event resulting in loss or liability was a 

resident of [Pennsylvania]. 

40 P.S. § 1701.103(5)(a)(i) (emphasis added). 

 Second, as stated above, the intent of the Pennsylvania 

legislature in passing the PIGA Act was to "provide a means for 

payment of covered claims . . . , to avoid excessive delays in 

payment of such claims, and to avoid financial loss to 

policyholders as a result of the insolvency of an insurer." 40 

P.S. § 1701.102(1). While we recognize that the Pennsylvania 

legislature did not intend for all insureds in all cases to be 

placed in the same position they would have been if their insurer 

had not become insolvent, see Blackwell v. Pennsylvania Insurance 

Guaranty Ass'n, 567 A.2d 1103, 1106 (Pa. Super. Ct. 1989), the 

result that the district court's decision would bring, whereby 

Porter could only recover $899,700 -- a mere 6% of the $15 

million Porter would have been able to obtain from Integrity --is 

inconsistent with the stated policy goals of the legislation. 

 Third, it is only logical that the covered claims for which 

Porter seeks indemnity be viewed as comprised of the individual 

claims of the underlying tort victims. When multiple persons 

have been injured in an accident, each injured person has a 

separate covered claim even if their individual claims are 

asserted by the insured -- in this case Porter -- rather than the 

individuals themselves. Indeed, under Pennsylvania's "direct 

action" statute, tort victims may sue an insurer directly if the 
12 

insured has gone bankrupt or become insolvent.5 Therefore, 

provided the relevant residency requirements are met, it makes 

logical sense that PIGA indemnify Porter for each claim of the 

injured tort victims, given that these tort victims could have 

instituted claims against Integrity themselves. 

 Finally, the district court's conclusion that PIGA need only 

indemnify Porter once for each of the three policies would have 

grave policy consequences if allowed to stand. The district 

court's conclusion would encourage PIGA or a carrier insuring 

"covered claims" to limit its liability by wrongly refusing to 

honor the individual injury claims presented by the insured. When 

the insured filed suit to compel payment, the numerous claims of 

those injured suddenly would be converted into a single claim by 

the insured and be subject to the maximum limit. As a result, 

 

5This statute reads as follows: 

No policy of insurance against loss or damage resulting 

from accident to or injury suffered by an employee or 

other person and for which the person insured is liable 

. . . shall hereafter be issued or delivered in this 

State by any corporation, or other insurer, authorized 

to do business in this State, unless there shall be 

contained within such policy a provision that the 

insolvency or bankruptcy of the person insured shall 

not release the insurance carrier from payment of 

damages for injury sustained or loss occasioned during 

the life of such policy, and stating that in case 

execution against the insured is returned unsatisfied 

in an action brought by the injured person, or his or 

her personal representative in case death results from 

the accident, because of such insolvency or bankruptcy, 

then an action may be maintained by the injured person, 

or his or her personal representative, against such 

corporation, under the terms of the policy, for the 

amount of the judgment in the said action, not 

exceeding the amount of the policy. 

40 P.S. § 117. 
13 

insureds would receive virtually no coverage for their claims 

and, even if the victims were ultimately able to obtain coverage 

through the direct action statute, extensive delays and 

litigation would result. 

 Our conclusion that the "covered claims" at issue encompass 

the claims of the underlying tort victims finds further support 

from several cases which present a similar issue and which 

interpret insurance statutes from other states that, like 

Pennsylvania's Act, are based upon the model bill. 

A. 

 The case which most closely parallels this action is the 

Connecticut Supreme Court case, Connecticut Insurance Guaranty 

Association v. Union Carbide Corp., 585 A.2d 1216 (Conn. 1991). 

Union Carbide grew out of the 1984 chemical disaster in Bhopal, 

India, which resulted in the deaths of 2,300 people and injuries 

to more than 200,000 others. Id. at 1219. Union Carbide brought 

a declaratory judgment action against the Connecticut Insurance 

Guaranty Association (CIGA) to resolve numerous issues relating 

to CIGA's obligation to reimburse Union Carbide for claims 

arising out of the disaster. Union Carbide had reached a 

settlement agreement with the Indian government and had then 

approached its insurance companies for reimbursement. The 

insurance companies had become insolvent, and Union Carbide thus 

approached CIGA for indemnity. Id. 

 One of the primary claims raised in Union Carbide was 

whether a "covered claim" referred to the claim of each victim 

who filed an action against Union Carbide or whether Union 
14 

Carbide presented only one covered claim which was subject to the 

$300,000 limit. Just as PIGA argues in the instant action, CIGA 

argued that the only covered claims were Union Carbide's six 

claims, each under one of six insurance policies issued by the 

insolvent insurers, limiting Union Carbide to a maximum recovery 

of $1,800,000. Id. at 1220. 

 The Connecticut Supreme Court disagreed and held that CIGA 

was required to pay the claims presented up to the total limits 

of the underlying policies. The Supreme Court based its 

conclusion on several grounds, each of which is equally 

applicable in the instant case. 

 First, the Connecticut Supreme Court concluded that, under 

the Connecticut statute, the Bhopal victims could sue Union 

Carbide's insolvent insurance companies directly under a 

Connecticut statute. Id. This direct action statute allows a 

tort victim to file an action directly against an insurer if the 

victim has obtained a judgment against an insured that remains 

unsatisfied for thirty days. Id.; see also C.G.S.A. § 38-175. 

Thus, sheer logic dictated that CIGA be held liable for the 

claims of the individual tort victims. As explained above, 

Pennsylvania also has a "direct action" statute allowing tort 

victims to sue an insurer directly if the insured has become 

bankrupt or insolvent. 40. P.S. § 117. Therefore, the 

Connecticut Supreme Court's reasoning applies to the instant 

action. 

 Second, the Connecticut Supreme Court rejected CIGA's 

argument that the definition of "covered claim" only encompassed 
15 

the claim of the insured Union Carbide, rather than the claims of 

the underlying tort victims. Union Carbide, 585 A.2d at 1221. 

The Court recognized that under the statute a "covered claim" 

encompasses the claims of "the claimant or insured." C.G.S.A. 

§38-275(4) (emphasis added). The Court thus concluded that under 

this language either the insured resident of Connecticut or the 

underlying claimant, in that case the Bhopal victims, might 

present a "covered claim" to CIGA. Id. 

 While the language in Pennsylvania's statute is not 

identical to that in Connecticut's statute,6 it, too, suggests 

the same conclusion. As explained above, when the definition of 

"person" from 40 P.S. § 1701.103(8) is inserted in the definition 

of "covered claim" the resulting definition makes clear that the 

Connecticut Supreme Court's conclusion that a "covered claim" may 

be presented by either the insured or a claimant is equally true 

in Pennsylvania: 

 The claim of a [holder of or claimant under a property 

and casualty insurance policy] who at the time of the 

insured event resulting in loss or liability was a 

resident of [Pennsylvania]. 

 

6We recognize that the definition of a "covered claim" in the 

Connecticut statute at issue in Union Carbide differs in some 

respects from the definition in the Pennsylvania statute at issue 

here. For example, under the Connecticut statute, a claim 

against a Connecticut resident insured could qualify as "covered" 

even if asserted by a non-resident based on an event occurring 

outside of the state of Connecticut. See Union Carbide, 585 A.2d 

at 1220. Under the Pennsylvania statute, by contrast, a claim can 

qualify as "covered" only if it is either "(i) The claim of a 

person who at the time of the insured event resulting in loss or 

liability was a resident of this Commonwealth, or (ii) A claim 

arising from an insured event resulting in loss or liability to 

property which was permanently situated in this Commonwealth." 

46 P.S. §1701.103(5)(a). This difference, however, is not 

significant for present purposes. 
16 

 

40 P.S. § 1701.103(5)(a)(i) (emphasis added). 

 Third, the Connecticut Supreme Court ruled as it did because 

it concluded that such a ruling was consistent with the intent of 

the legislature: 

Apart from our conclusion that the text of the act does 

not support the imposition of a $300,000 limit upon 

[Union Carbide's] claim for indemnification under each 

of the six policies whose insurers have become 

insolvent, we are also persuaded that the remedial 

purpose of this legislation would be largely defeated 

by such a restriction. Although this case involves a 

substantial indemnification claim of $32,500,000 

presented by a large corporate enterprise, it is not 

exceptional today for individuals to carry liability 

insurance with limits far in excess of $300,000. The 

recovery of $300,000 by a single victim of an 

automobile accident is not extraordinary, and when 

there are multiple victims the total liability of the 

insured can readily exceed that amount. If we were to 

accept CIGA's argument that only an insured may present 

a covered claim and that such a claim for 

indemnification from a single occurrence is limited to 

$300,000, the protection of Connecticut residents 

against losses resulting from insolvency of insurance 

carriers, which the legislature intended to provide, 

would often prove illusory. 

Union Carbide, 585 A.2d at 1222-23. There can be no doubt that 

this same rationale applies in the context of Pennsylvania. As 

mentioned above, Connecticut's Insurance Guaranty Act is based 

upon the same model bill as the Act in Pennsylvania, and the 

purpose of Pennsylvania's Act is to "provide a means for the 

payment of covered claims . . . and to avoid financial loss to 

claimants or policyholders as a result of the insolvency of an 

insurer." 40 P.S. § 1201.102(1). 

 A case recently decided by this court involving a similar 

issue suggests that the reasoning in Union Carbide may be 
17 

appropriately adopted by this court. In T & N v. Pennsylvania 

Ins. Guaranty Ass'n, 44 F.3d 174 (3d Cir. 1994), we were 

presented with the question of whether an insured company who had 

entered into one settlement agreement for all underlying claims 

with its now-insolvent insurer and sought recovery from PIGA, 

presented one covered claim for recovery or multiple covered 

claims. T & N argued that under the reasoning of Union Carbide

it presented separate covered claims for each of the underlying 

claimants. We considered Union Carbide and determined that the 

facts of Union Carbide were different from T & N's scenario: 

Union Carbide settled with the underlying claimants. 

The settlement agreement can thus be viewed as the 

embodiment of each claim which was filed against Union 

Carbide. However, in the present case, T & N settled 

with the insurance company. The settlement agreement 

is not the embodiment of claims filed by the underlying 

claimants . . . . Payment was not related to the 

individual claims which had been filed. As a result, 

we find that in light of the fact that T & N had 

entered into a single settlement agreement with [its 

insurer] which encompassed all of its claims against 

the insurance company, it only has one covered claim 

which is subject to the $300,000 statutory limit. 

Id. at 184 (emphasis added). We did not discredit Union 

Carbide's reasoning in any way. To the contrary, this court's 

language in T & N indicates that, had T & N entered into a 

settlement agreement with the underlying claimants rather than 

the insurance company, we would have followed Union Carbide's 

lead. 

 The facts in this case are very similar to those in Union 

Carbide. Porter has entered into settlement agreements with 

underlying claimants, and those settlements "can thus be viewed 
18 

as the embodiment of each claim which was filed," id., against 

Porter. 

B. 

 Our construction of the statute is supported by cases from 

other jurisdictions as well. These cases all grow out of 

insurance disputes involving state Guaranty Agencies and statutes 

that are based on the model bill, and their reasoning is very 

much applicable to the instant case. See, e.g., Plymouth Rubber 

Co. v. Massachusetts Insurers Insolvency Fund, No. 87-440, slip 

op. (Mass. Super. Ct. May 24, 1988); Commercial Union Insurance 

Company v. Sepco Corp. 1989 U.S. Dist. LEXIS 18378 (S.D. Alab. 

1989), aff'd, 918 F.2d 920 (11th Cir. 1990); Oglesby v. Liberty 

Mutual Insurance Company, 832 P.2d 834 (Okla. 1992). 

 For example, in Plymouth Rubber Co., the Massachusetts 

Superior Court held that each underlying claim raised against 

Plymouth Rubber Company, for which Plymouth Rubber sought 

indemnification from Massachusetts's Guaranty Fund, was a covered 

claim separately subject to the statutory $300,000 limit. 

Plymouth Rubber Co., No. 87-440, slip op. at 5. The court 

explained as follows: 

Under the Ideal Mutual insurance policy . . . the 

covered claims which arose out of the policy were the 

obligations to "indemnify the insured for all sums 

which the insured shall become legally liable to pay as 

damages arising out of claims made" against the insured 

in excess of the policy's $250,000.00 aggregate annual 

deductible. According to this language in the policy, 

Ideal Mutual was obligated to indemnify the plaintiff 

for all customer claims. . . . As such, every demand 

for indemnification was a covered claim. 
19 

Id. The language of the insuring obligations in the policies 

issued by Integrity to Porter is substantially similar to the 

above quoted language in Plymouth Rubber's policy: 

. . . [Integrity Insurance] Company hereby agrees . . . 

to pay all sums, as more fully defined by the term 

ultimate net loss, for which the insured shall become 

obligated to pay by reason of liability 

(a) imposed upon the insured by law or 

(b) assumed under contract or agreement by 

the insured 

arising out of personal injury, property damage or 

advertising liability caused by an occurrence. 

App. at 29. Therefore, the reasoning of Plymouth Rubber applies 

in the instant case as well. 

 Guidance in this area is also offered by Sepco Corp. There 

the district court analyzed the purpose of the Alabama Insurance 

Guaranty Association Act, which is substantially the same as 

Pennsylvania's Act, and it concluded that the Alabama Insurance 

Guaranty Association (AIGA) was responsible for paying each of 

the underlying 2,000 claims made against Sepco by persons 

claiming bodily injury from exposure to Sepco's asbestoscontaining products: 

AIGA argues there is one aggregate claim, limiting 

AIGA's liability to $149,900.00. This argument is 

without merit. Each of the over 2,000 underlying cases 

produces a separate claim. To accept this specious

argument would defeat the intent of the liability 

policy which [the insolvent insurer] issued Sepco and 

would leave Sepco substantially without insurance for 

the year's time during which [the insolvent insurer] 

supposedly covered its liability. . . . This 

interpretation would defeat the intent of the Alabama 

Legislature when it enacted "The Act" to protect the 

public against insolvency of insurance carriers. 

Sepco Corp., 1989 U.S. Dist. LEXIS 18378 at *13 (footnote 

omitted) (emphasis added). When the Eleventh Circuit reviewed 
20 

and affirmed this case on appeal, it declined to even address 

this specific claim by AIGA, noting it was "without merit and 

warrant[s] no discussion." Sepco Corp., 918 F.2d at 923 n.3. 

 Finally, Porter's position is supported by the Oklahoma 

Supreme Court's decision in Oglesby v. Liberty Mutual. There, 

the Oklahoma Supreme Court held that the wife and two minor 

children of a man killed in an industrial accident each presented 

their own separate covered claim for which they were entitled to 

Oklahoma's $150,000 statutory cap of recovery from the Oklahoma 

Guaranty Association. The Court noted that the portion of 

Oklahoma's statute in which the obligations of the Oklahoma 

Guaranty Association are laid out requires that "such obligations 

shall include the amount of each covered claim which is less than 

One Hundred Fifty Thousand Dollars ($150,000.00) . . . ." 36 

Okla. Stat. § 2007 (emphasis added). The Court explained, "[t]he 

Legislature's use of the word 'each' rather than 'all' covered 

claims indicates that it anticipated the possibility of multiple 

recoveries." Oglesby, 832 P.2d at 840. The same logic applies 

in the context of Pennsylvania where the statute explains that 

PIGA's "obligation shall include only that amount of each covered 

claim which is in excess of one hundred dollars ($100), and is 

less than three hundred thousand dollars ($300,000)." 40 P.S. 

§1701.201(b)(1)(i) (emphasis added). 

 We find that the rationale applied by these other courts is 

equally applicable to the facts of the instant case. We find it 

all the more persuasive and compelling because PIGA has not 
21 

pointed to any case in any other court, nor have we found any, in 

which this issue was decided differently. 

IV. 

 We now briefly address PIGA's argument that Porter is only 

entitled to recover $299,900 for each of its three Integrity 

policies because the policies cover liability per "occurrence," 

and injuries caused by the ongoing manufacture and sale of 

asbestos are all deemed to be part of the same "occurrence." 

 PIGA asserts that when two Pennsylvania superior court 

cases, Vickodil v. Pennsylvania Insurance Guaranty Ass'n, 514 

A.2d 635 (Pa. Super. Ct. 1986), allocatur denied, 523 A.2d 346 

(1987), and Donegal Mutual Insurance Co. v. Long, 564 A.2d 937 

(1989), aff'd, 597 A.2d 1124 (1991), are read together a rule 

emerges requiring that in instances where an insurance policy has 

a "per occurrence" limit but has no "per person" limit, the 

statutory limit of $299,900 applies to and substitutes for the 

occurrence limit, thus entitling the insured to only one covered 

claim under the policy. We have reviewed both of these cases at 

length and conclude there is no merit to PIGA's argument 

whatsoever. 

 Furthermore, there is no support in the language of the Act 

itself that suggests that it is appropriate for PIGA to consider 

a "covered claim" to be all claims arising out of one occurrence. 

The language of the statute provides that PIGA's "obligation 

shall include only that amount of each covered claim" up to the 
22 

statutory limit. 40 P.S. § 1701.201(b)(1)(i). The legislature 

used the phrase "each covered claim," not "each occurrence." This 

plain language in and of itself indicates that PIGA is obligated 

to pay up to the statutory cap on a per claim basis, not a per 

occurrence basis. See, e.g., Ramage v. Alabama Insurance 

Guaranty Association, 919 F.2d 1010, 1012 (5th Cir. 1990) 

(holding that "the statutory language places a limit on the 

liability amount for a claim . . . but does not limit the number 

of claims which can be asserted from a particular occurrence"); 

Union Carbide, 585 A.2d at 1222 (holding that in context of 

Connecticut statute "[t]here is no basis for substituting the 

word 'occurrence' for the word 'claim'"); Florida Insurance 

Guaranty Association v. Cole, 573 So.2d 868, 870 (Fla. Dist. Ct. 

App. 1990) (holding that each injured person is entitled to file 

a claim regardless of whether injuries arose from the same 

occurrence); Trans Louisiana Gas Company v. Louisiana Insurance 

Guaranty Association, 652 So.2d 686, 691 (La. Ct. App. 1st Cir. 

1995) (holding that the claims of two injured children arising 

from one occurrence constituted two covered claims for which LIGA 

was responsible to the statutory limit). 

V. 

 One might well argue that the Pennsylvania legislature never 

intended to compensate claims of this magnitude. Mass tort 

claims may not have been considered or contemplated. However, 

the statute makes clear that individual claims are subject to the 

statutory limitations and those limitations are not further 
23 

limited when asserted by the insured seeking indemnification for 

claims paid to or pending by others entitled to assert them. 

 Our interpretation carries out the legislative policy of 

protecting the insured and other claimants when an insurance 

carrier becomes insolvent and is unable to honor its commitments. 

 For the foregoing reasons, we hereby reverse the order of 

the district court granting partial summary judgment in favor of 

PIGA.