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APPLICATION PROCEDURE FOR OBTAINING A STAY OF ALL PROCEEDINGS PENDING IN THE NEW JERSEY COURTS INVOLVING AN INSOLVENT INSURER PURSUANT TO N.J.S.A. 17:30A-18

The following sets forth the procedures for obtaining a statewide stay of all litigated matters involving an insolvent insurer. These procedures are applicable to matters involving the New Jersey Property-Liability Insurance Guaranty Association (“NJPLIGA”) and the New Jersey Surplus Lines Insurance Guaranty Fund (“NJSLIGF”). For ease of reference, these procedures will refer only to NJPLIGA.

  • 1. Upon notification that an insurer licensed or authorized to do business in the State of New Jersey has been declared insolvent by a court of competent jurisdiction pursuant to N.J.S.A. 17:30A-5, NJPLIGA shall, by counsel, apply for a stay of all proceedings pending in the courts of New Jersey in which that insurer is a party or is obligated to defend a party. Such application shall be filed in the Superior Court of New Jersey, Chancery Division, General Equity Part, Mercer County.

  • 2. This application shall be made by verified complaint, affidavit and order to show cause with temporary restraints.

  • 3. The verified complaint and affidavit of a representative of NJPLIGA shall set forth the facts of the insolvency entitling NJPLIGA to the relief provided by N.J.S.A. 17:30A-18. A copy of the liquidation order will be supplied with the verified complaint and affidavit.

  • 4. The proposed order to show cause with temporary restraints will provide as follows:

    • (a) A return date, set by the court, on which all interested parties may appear before the court to be heard on whether, pursuant to N.J.S.A. 17:30A-18, the court should enter an order staying all proceedings in which the insolvent insurer is a party or is obligated to defend a party for a period of 120 days, effective upon the date of the order of liquidation;

    • (b) A date by which all interested parties should file briefs with the court on the issue of the stay, with copies to be supplied to counsel for NJPLIGA;

    • (c) Staying, effective immediately upon the entry of the order to show cause, all proceedings in which the insolvent insurer is a party or is obligated to defend a party in any court in the state until the return date of the order to show cause;

    • (d) Directing NJPLIGA to supply to the AOC’s Civil Practice Division, as soon as reasonably possible, a list setting forth the names of the cases which will be subject to the order, identifying the insured of the insolvent insurer in each case and, when available, the docket numbers including county designations;

    • (e) Directing that a copy of the verified complaint, affidavit and order to show cause with temporary restraints be served upon the insolvent insurer and/or its liquidator;

    • (f) Directing NJPLIGA to arrange for publication of the order to show cause with temporary restraints in the New Jersey Law Journal and the newspapers in which the insolvency notices were published; and

    • (g) Directing NJPLIGA to serve a copy of the executed order to show cause with temporary restraints upon the Civil Presiding Judge and Civil Division Manager of each vicinage in the state, and to provide a copy to the AOC’s Civil Practice Division.

  • 5. The verified complaint, affidavit and order to show cause shall be filed in the Superior Court of New Jersey, Chancery Division, General Equity Part, Mercer County.

  • 6. Upon receipt of the executed order to show cause with temporary restraints, NJPLIGA will post a copy of the order and a copy of the liquidation order on its website.

  • 7. During the period between the execution of the order to show cause with temporary restraints and the return date, NJPLIGA will consider, in good faith, those responses objecting to the entry of the stay or requesting relief from the stay. If agreement can be reached with the parties requesting such relief, a consent order will be submitted to the court, bearing the docket number assigned to the verified complaint, setting forth the agreed upon relief and identifying the subject case by name and docket number.

  • 8. Affidavits of publication will be supplied to the court upon receipt and in advance of the return date of the order to show cause with temporary restraints.

  • 9. Counsel for NJPLIGA shall appear on the return date of the order to show cause. NJPLIGA will have available, by telephone, a representative with authority to consider requests for relief from the stay or extend such authority to counsel.

  • 10. If the court is satisfied that the facts support NJPLIGA’s request for the relief provided in N.J.S.A. 17:30A-18, the court will recite those findings for the record and direct counsel for NJPLIGA to submit an order for execution by the court providing as follows:

    • (a) Staying all proceedings pending in the State of New Jersey in which the insolvent insurer is a party or is obligated to defend a party for a period of up to 120 days effective upon the date the order of liquidation was entered;

    • (b) Directing that any subsequent application for relief from the initial stay shall be brought in the Superior Court, Chancery Division, General Equity Part, Mercer County by formal motion on notice to all interested parties, including NJPLIGA;

    • (c) Directing that a request for a further stay of any such proceeding beyond the statutory 120 days shall be made by motion, on notice to all parties to such proceeding, filed in the county in which that proceeding is pending, which motion will be decided by the Civil Presiding Judge of the vicinage in which the motion is filed or that judge designated by the Civil Presiding Judge to decide such motions;

    • (d) Directing that the order shall be served upon the Civil Presiding Judge and civil division manager of each vicinage in the state; and

    • (e) Directing that the order shall be published in the New Jersey Law Journal and the newspapers in which the insolvency notices were published.

  • 11. NJPLIGA will post the order granting the stay on its website.

  • 12. During the pendancy of the initial 120-day stay, NJPLIGA will, in good faith, consider informal requests for relief from the stay made by interested parties. If agreement cannot be reached, said parties may apply to the Superior Court, Chancery Division, General Equity Part for relief as provided above.

  • 13. Nothing in these procedures precludes NJPLIGA from exempting a particular case or category of cases from its stay application.

Approved at the 6/10/2003 meeting of the Conference of Civil Presiding Judges;Item 10 amended at the 9/30/2003 meeting of the Conference.

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