R. J. Reynolds Co. v. California Insurance Guarantee Ass'n

—Appellant R. J. Reynolds Co., Inc. (Reynolds) contracted for services from Multi-Marketing, Inc. (MMI). MMI purchased liability insurance from Mission Insurance Co. and Mission National Insurance Co. (Mission), naming Reynolds as additional insured. While Mission was engaged in defending a claim against MMI, Reynolds and others, Mission became insolvent. Reynolds’s own insurer, Aetna Life and Casualty Company (Aetna), took over the defense and negotiated and paid a settlement of the claim. The Aetna policy contained a retrospective premium endorsement. When the retrospective premium was calculated, in accordance with the terms of the Aetna policy, Reynolds’ premium payment to Aetna included $200,000 of the incurred loss. Reynolds filed suit against the California Insurance Guarantee Association (CIGA), an association of member insurers formed to protect insureds from injury due to the insolvency of its members. Reynolds claims that CIGA had a duty to reimburse it the $200,000 it had paid to Aetna. The trial court granted summary judgment in favor of CIGA on the ground that the $200,000 retrospective premium payment was not a claim covered by CIGA, within the statutory…