Opinion ID: 1134338
Heading Depth: 1
Heading Rank: 3

Heading: what effect does paragraph 17 of the subject reinsurance agreement have on appellant's action against gerling global?

Text: Paragraph 17 of the insurance agreement now in question provides in relevant part as follows: 17. In the event of insolvency of State Security, the liability of Gerling for claims shall continue to be determined by all of the terms, conditions and limitations under this Agreement, but said Gerling will make settlement of claims. (a) directly to the liquidator, receiver or statutory successor of State Security, and (b) without diminution because of the insolvency of State Security. (Emphasis added) As can clearly be seen, the contract entered into by Gerling Global and State Security explicitly provides that in the event of State Security's insolvency, Gerling Global is liable for payments on claims only to the liquidator, receiver, or statutory successor of State Security. Where an insurance contract is clear and unambiguous, it should be construed as written just as any other contract. Insurance Company of North America v. Deposit Guaranty National Bank, 258 So.2d 798, 801 (Miss. 1972). As previously stated, State Security was declared insolvent by the insurance commissioner on October 12, 1984, and was placed in receivership by the Chancery Court of Rankin County. Thus, under the plain language of paragraph 17 of the insurance agreement, Gerling Global is obligated to make payments on the claims of appellant, as well as other similarly insureds only to the receiver of State Security as appointed by the Chancery Court of Rankin County. In Section I, supra, we held that appellant, due to the terminology used in the reinsurance contract, had a direct cause of action against Gerling Global, and that the lower court erred in granting summary judgment. We assume that there are other similarly situated original insureds of State security with claims much the same as the one involved in the case sub judice. [1] Consequently, due to the mandates of paragraph 17, of the so called Reinsurance Agreement we remand this case to the Circuit Court of Montgomery County directing that Court transfer appellant's cause of action to the Chancery Court of Rankin County so that State Security's receiver may process the claim. Further, after transfer of the present case, State Security's receiver should give notice to all claimants to file their claims against Gerling Global in the Chancery Court of Rankin County within such time as the Court may determine without unusual delay. All suits in existence, or presently pending by original insured's of State Security, against Gerling Global, which are brought under the July 15, 1983 Reinsurance Agreement should be immediately transferred to the Chancery Court of Rankin County, where the claims may be considered and adjudicated. The Chancery Court of Rankin County is instructed, with regard to all of the above claims, to: (1) Consider the liability vel non of Gerling Global under the agreement; (2) Establish the limits of Gerling Global's liability; and (3) After hearing the above claims, is directed to make an award on each valid claim in pari passu, from the sum owed by Gerling Global due to its liability under the contract with State Security, as well as from other assets of State Security which might be available to the receiver. Provided, however, that nothing said herein shall preclude Gerling Global's assertion of any remedy, defense or process available to it under the agreement and obtaining an adjudication thereon; nor shall anything said herein preclude State Security's receiver or the receivership court exercising such discretionary authority over the conduct of future litigation as would ordinarily and otherwise by law be vested in them. PETITION FOR REHEARING DENIED; ORIGINAL OPINION MODIFIED. REVERSED AND REMANDED WITH INSTRUCTIONS. ROY NOBLE LEE, C.J., HAWKINS and DAN M. LEE, P.JJ., and PRATHER, ROBERTSON, SULLIVAN, ANDERSON and GRIFFIN, JJ., concur.