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Standard of review-Insurance Liquidation
 

Standard of review-Insurance Liquidation
 

Discussion

1.  Standard of review

            “Because the insurer is in liquidation, the scope of our review of determinations of both the superior court and the liquidation trustees in the resolution of claims by insureds against an insolvent carrier is circumscribed.  (See generally, Ins. Code, §§ 1010-1062.) Our high court has long since observed that such conservation proceedings arise under the broad police powers of the state to insure the reorganization or orderly liquidation of insolvent insurers and the protection of their policyholders and the public.  [Citation.]  A corollary of that broad power is the judiciary’s limited scope of inquiry into the liquidation trustees’ grounds for rejecting claims for compensation by policyholders.  As the Carpenter [v. Pacific Mut. Life Ins. Co. (1937) 10 Cal.2d 307, 329] court put the ruling standard, ‘The only restriction on the exercise of this power [to administer liquidation proceedings under the Insurance Code] is that the state’s action shall be reasonably related to the public interest and shall not be arbitrary or improperly discriminatory.’  (Ibid.)  [¶] That seminal formulation has since been glossed repeatedly to mean the measure of judicial review in such proceedings is the familiar ‘abuse of discretion’ standard.  [Citations.]”  (Low v. Golden Eagle Ins. Co. (2002) 104 Cal.App.4th 306, 315-316 (Low II).)  Our review of the liquidation court’s factual determinations is likewise circumscribed.  (Low v. Golden Eagle Insurance Co. (2003) 110 Cal.App.4th 1532, 1544 (Low III).)

            “However, ‘[a]n administrative determination will be interfered with by the courts where the determination is based upon an error in law.  [Citation.]  It is for the courts, not for administrative agencies, to lay down the governing principles of law. Accordingly, questions of law are reviewable.  [Citation.]  Whether an administrative agency applies the legislative standards validly set up, and whether it acts within the authority conferred or goes beyond it, are proper questions for judicial decision.  [Citation.]  The matter of statutory construction is not finally entrusted to administrative agencies; it is determined ultimately by the courts.  [Citation.]’ ”  (Quackenbush v. Mission Ins. Co. (1996) 46 Cal.App.4th 458, 466.)
Garamendi v. Golden Eagle 3/4/04 A097435ACA1/3
 

Mar 04 2004

A097435A [PDF] [DOC]

Garamendi v. Golden Eagle 3/4/04 CA1/3

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