Ohrbach's, Inc. v. California Insurance Guarantee Ass'n

Ohrbach’s, Inc. appeals from a summary judgment in favor of California Insurance Guarantee Association (CIGA). The question is *1091 whether claims by California residents against Ohrbach’s, a nonresident insured, are “covered claims” within the meaning of former Insurance Code section 1063.1, subdivision (c)(l)(vii) so that CIGA must defend Ohrbach’s. We think that they are, and therefore reverse.

The Legislature created CIGA in 1969 to provide “insurer insolvency insurance,” i.e., CIGA satisfies certain claims arising out of policies issued by insurers who have become insolvent. CIGA is an involuntary association of insurance companies; membership is a condition of doing business in California. (Isaacson v. California Ins. Guarantee Assn. (1988) 44 Cal.3d 775, 784 [ 244 Cal.Rptr. 655 , 750 P.2d 297 ].) CIGA need satisfy only “covered claims,” as defined by statute.

The parties have stipulated that appellant is not a California resident, although doing considerable business in California. It was insured by the Ideal Mutual Insurance Company, a New York enterprise. Thirteen California residents have filed tort actions against appellant. Ideal Mutual Insurance Company…