Opinion ID: 1842933
Heading Depth: 1
Heading Rank: 2

Heading: Liability of LIGA

Text: There is no dispute that LIGA stands in place of Anglo-American, Bonded's insolvent worker's compensation insurer. Under La.R.S. 22:1382(A)(2), LIGA is deemed the insurer to the extent of its obligation on the covered claims and to such extent shall have all rights, duties and obligations of the insolvent insurer as if the insurer had not become insolvent. Therefore, it appears LIGA (standing in place of the insurer for plaintiff's immediate employer) and GM (as plaintiff's statutory employer) should be cast in judgment in solido, with GM given indemnity rights against LIGA. [5] As the court in Jones v. Southern Tupelo Lumber Co., 257 La. 869, 244 So.2d 815, 817 (1971), stated: The courts below correctly cast all of the defendants solidarily, for when an employee is entitled to compensation and under R.S. 23:1061 or R.S. 23:1063 has sued the principal or the principal contractor together with the contractor or subcontractor, the liability of such defendants is solidary. The purpose of these statutes is to expand financial responsibility and to prevent the evasion of the workman's compensation law by the principal's or the principal contractor's interposing between himself and the employee an impecunious contractor or subcontractor. Under these statutes the claimant is entitled to proceed against the principal (or principal contractor) or the contractor (or subcontractor) or both as he chooses. The indemnification clauses, however, have the effect of finally imposing the loss of the principal or principal contractor upon the claimant's immediate employer. However, LIGA argues that the nonduplication of recovery provision set out in La.R.S. 22:1386(1) makes it liable only if and when plaintiff exhausts the benefits available to him from GM. At the time of this case, La.R.S. 22:1386(1) provided: § 1386. Nonduplication of recovery (1) Any person having a claim against an insurer under any provision in an insurance policy other than a policy of an insolvent insurer which is also a covered claim, shall be required to exhaust first his right under such policy. Any amount payable on a covered claim under this Part shall be reduced by the amount of any recovery under such insurance policy. [emphasis added]. In the present case, it was stipulated by the parties that GM was self-insured for worker's compensation purposes. [6] LIGA concedes that the statute uses the word policy, but argues that the distinction is only a matter of semantics and there is no practical difference between GM providing its own worker's compensation coverage or purchasing that coverage in a policy. We disagree. This court has held that self-insurance is, in actuality, not insurance at all. Hearty v. Harris, 574 So.2d 1234, 1237 (La.1991). Interpreting the Louisiana Motor Vehicle Safety Responsibility Law (LMVSRL), we held that self-insurance was merely one of the four methods of meeting the requirements of that law, but was not the same as an insurance policy: [w]hile Louisiana courts have consistently recognized that a certificate of self-insurance indicates the self-insurer possesses sufficient assets to satisfy judgments if found legally liable, the courts have refused to consider a certificate of self-insurance an insurance `policy.' Id. at 1238. See also Jones v. Henry, 542 So.2d 507 (La.1989); Jordan v. Honea, 407 So.2d 503 (La.App. 1st Cir.1981), writ denied, 409 So.2d 654 (La.1982). While it is true those cases involved self-insurance under the provisions of the LMVSRL, we see no practical difference between self-insurance under that statute and self-insurance under the worker's compensation law as set forth in La. R.S. 23:1181. [7] Self-insurance is simply one method of complying with La.R.S. 23:1181; it is not the equivalent of an insurance policy. The language of La.R.S. 22:1386 is unambiguous: it applies only to those persons having claims against an insurer under any provision in an insurance policy. [emphasis added]. Clearly, plaintiff's claim against GM is not against an insurer, nor is it based on an insurance policy. Further, were we to adopt LIGA's expansive definition of insurance as including self-insurance, the effect would be to protect LIGA, while impairing plaintiff's rights to seek benefits from LIGA. Such a holding would run counter to the principle that the provisions of the Insurance Guaranty Association Act must be interpreted to protect claimants and policyholders and to advance their interests rather than the interests of the association. Senac v. Sandefer, 418 So.2d 543, 546 (La.1982); Hickerson v. Protective National Ins. Co., 383 So.2d 377 (La.1980). In the absence of an express legislative pronouncement to the contrary, we hold that the presence of a self-insurer does not preclude liability on the part of LIGA to plaintiff for compensation benefits.