one carrier, which amount was "in addition to what it had committed to the settlement of the Junker action." Cmplt., P 31. This carrier had provided coverage for the period February 15, 1979 to April 1, 1980. Amended Memorandum in Opposition to Motion to Dismiss at 8 n.4. As Ranger sees it, it had no obligation to fill the gap created by the other carrier's insolvency. Cmplt., P 32.
Safety-Kleen moves to dismiss Count III, again relying on the holding in Zurich that, in the case of injury from continuing or repeated exposure to asbestos, any insurer on any triggered policy is, subject to policy limits, responsible to its insured for the full cost of defense and indemnity. Looking to the allocation of costs among carriers, Zurich sees that question as one of contribution, involving only the insurers. See Zurich Ins. Co. v. Northbrook Excess and Surplus Ins. Co., 145 Ill. App. 3d 175, 494 N.E.2d 634, 650, 98 Ill. Dec. 512 (1st Dist. 1986), aff'd, 118 Ill. 2d 23, 514 N.E.2d 150, 112 Ill. Dec. 684 (1987).
While not taking issue with these determinations in the Zurich case, Ranger compares the situation here to cases where, following its primary insurer's insolvency, an insured seeks payment under an excess insurance policy. Funds from the excess policy would fill the gap in coverage created by the primary carrier's insolvency. The rule in the majority of cases addressing the issue is that, absent language in the excess carrier's policy to that effect, it is not required to provide primary coverage when an underlying insurer becomes insolvent. Hudson Ins. Co. v. Gelman Sciences, Inc., 921 F.2d 92, 95 (7th Cir. 1990); Zurich Ins. Co. v. Heil Co., 815 F.2d 1122 (7th Cir. 1987). Cf. Donald B. MacNeal, Inc. v. Interstate Fire and Casualty Co., 132 Ill. App. 3d 564, 477 N.E.2d 1322, 1325, 87 Ill. Dec. 794 (1st Dist. 1985) (excess insurer required to fill gap in coverage; court finding ambiguity in policy language providing that excess carrier assumed liability for excess over "amounts recoverable" under primary policy). As the Seventh Circuit has commented, "[a] contrary rule would force an excess coverage provider to investigate the financial stability of every underlying carrier." New Process Baking Co. v. Federal Ins. Co., 923 F.2d 62, 63 (7th Cir. 1991). Insolvency may not have been one of the risks the excess carrier considered in determining its premium. See id. at 64.
The insolvent carrier in this case provided coverage in a different time period than did Ranger.
This court agrees with Ranger that there is no precedent for a kind of "move-over," whereby an insurer during one policy period is required to fill a gap left when a carrier providing coverage in a different time period becomes insolvent. Such result would make the insurer liable for more than it bargained for when it entered into the insurance contract. Nor does this court believe that Zurich compels such conclusion. Rather, Zurich finds that if there is a triggering event within the policy period, the carrier is liable up to the limits of its coverage for that period. Once that coverage is exhausted, though, the obligation to indemnify or defend ceases. See Zurich, 514 N.E.2d at 163. Zurich does not upset or undermine the basic rule that the duties of an insurer with respect to an occurrence within a policy period are determined by reference to the policy in effect during that period.
Ranger would compare its situation to that of an excess carrier whose policy must "drop down" to provide coverage, but the analogy is defective. Significantly, the "drop down" cases deal with the question of whether amounts potentially payable under an excess policy can be applied to the liability of a primary insurer whose policy covers the same time period as the excess policy. The problem here is simply not the same problem as in the "drop down" cases.
In this court's view, to determine whether Ranger has paid more than it was obligated to in the Junker litigation, the court need look no further than the terms of the policies that were triggered. As discussed in the preceding section of this memorandum, Ranger may be entitled to reimbursement of deductibles under one or more of its policies. Depending on the number of deductibles per occurrence and policy limits, there is a potential for reimbursement of deductibles. Ranger may also be entitled to reimbursement for any amounts paid in excess of the policy limits. But Ranger is not entitled to avoid payment of its policy limits because of the insolvency of another primary carrier. Accordingly, Count III is dismissed.
For the reasons set forth above, Safety-Kleen's motion to dismiss is granted in part and denied in part. Count III of the complaint is dismissed.
JOAN B. GOTTSCHALL
United States Magistrate Judge
DATED: February 11, 1993