PA Supreme Court Ranks Subrogation Rights Arising Out of Insurer’s Liquidation.

In the case of Ario v. Reliance Insurance, the PA Supreme Court was called upon to decide, under Section 544 of the Insurance Department Act, 40 P.S. § 221.44, what priority classification “ought to be assigned to a subrogation claim held by an insurance company against an insolvent insurer under the Act.” The court held, in a case of first impression, that subrogation claims should be assigned a section “g” classification, which puts the subrogating insurer seventh in line for payment. In other words, the subrogating insurer would likely have better luck getting blood from a stone.