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Cy Ryan

Court rules MGM can recover insurance claims

29 June 2009

CARSON CITY, Nevada – The Nevada Supreme Court has ruled the MGM Mirage and another Las Vegas company have the right to recover hundreds of thousands of dollars from a state insurance pool.

The court overturned the decision of District Judge Elizabeth G. Gonzalez, who held that the nonprofit Nevada Insurance Guaranty Association did not have to cover the excess worker compensation claims from MGM Mirage and Steel Engineers.

MGM and Steel are self-insured to cover claims from workers injured on the job. But they are required by law to buy additional insurance coverage for excess claims. The two companies both purchased policies for the excess coverage from Reliance National Insurance Company, which was declared insolvent in 2001.

The two Nevada companies then had to cover the claims of the injured workers.

Nevada law set up the nonprofit association with insurance companies paying into the pool annually. The association was required to cover claims when insurance companies were declared insolvent.

After Reliance was pronounced insolvent, the two Las Vegas companies asked the association to cover their excess losses. The association refused, claiming the two companies were insurers under the law and were not eligible to recover the money they paid in excess claims.

The court ruled the MGM and Steel were not insurers "because they are not in the business of insurance."

The amount being sought by the two companies was identified only as "hundreds of thousands of dollars."

Court rules MGM can recover insurance claims is republished from