New Jersey Supreme Court Ruling Regarding Insolvent Insurers Could Have Significant Impact On Allocation Of Long‐Tail Claims

By Charles J. Stoia

On September 24, 2013, in Farmers Mut. Fire Ins. Co. v. NJPLIGA, __ N.J.___, 2013 WL5311272 (2013), the New Jersey Supreme Court ruled that policy limits of solvent insurers must be exhausted before the New Jersey Property- Liability Insurance Guaranty Association ("NJPLIGA") could be responsible for long-tail claims under policies issued by insolvent insurers. NJPLIGA is a statutory entity created to provide New Jersey policyholders with protection when insurers become insolvent.