Rule 3781. Claim Procedure in Liquidation Proceedings.
(a) Filing a Proof of Claim.
(1) A creditor asserting a monetary claim against the insurer’s estate shall file a proof of claim with the liquidator in accordance with Article V.
(2) In the notice to potential creditors of the insurer’s estate, the liquidator shall provide a proof of claim form that complies with Article V.
(3) The completed proof of claim form and supporting documentation shall be filed with the liquidator. A proof of claim form is filed when received by the liquidator except as described below. The liquidator is deemed to have received the proof of claim form on the date of mailing as established by a United Postal Service Form 3817 Certificate of Mailing, Form 3800 Receipt for Certified Mail, Form 3806 Receipt for Registered Mail, or by any similar form from which the date of deposit in the mail can be verified or the date of transmission by facsimile (fax) or electronic mail (e-mail), as documented by the sender’s fax or computer. If filing is accomplished by fax, the claimant shall also comply with the requirements of Pa.R.Civ.P. 440(d)(2), relating to a fax cover sheet.
(b) Notice of determination.
(1) Unless otherwise ordered, the liquidator shall issue a written notice of determination within one hundred and eighty (180) days of the filing of the proof of claim, unless the liquidator seeks additional information on a claim pursuant to Section 538(b), 40 P. S. § 221.38(b). If additional information is requested, the liquidator shall issue a notice of determination within ninety (90) days of the date on which the additional information is received.
(2) The notice of determination shall include:
(i) the allowed amount of the claim;
(ii) the priority class assigned to the claim;
(iii) if the claim is disallowed in whole or in part, a brief statement of the reason(s) for the liquidator’s determination;
(iv) a statement advising the claimant of the requirements set forth in Pa.R.A.P. 3781(c)(1) (time for filing); and
(v) notice that if a claimant fails to file an objection with the Court within sixty (60) days from the mailing date on the notice of determination, the claimant cannot later object to the liquidator’s determination.
(3) If the liquidator determines that the claim has been submitted to a state guaranty association, the liquidator may defer further review of the proof of claim until the guaranty association has made its final determination and has returned the closed claim file to the liquidator. In such a case, the liquidator shall notify the claimant of the decision to defer review.
(c) Objections.
(1) Time for filing. If a claimant disputes the allowed amount or priority class assigned to the claim, the claimant shall file an objection with the Court within sixty (60) days from the mailing date on the notice of determination. The objection must present the factual and legal basis for the objection and include a copy of the notice of determination. The objection may include relevant supporting documentation and be accompanied by a memorandum of law.
(2) Service. The claimant shall serve a copy of the objection on the liquidator in accordance with Pa.R.A.P. 121 (service).
(3) Response. The liquidator shall promptly acknowledge receipt of an objection, contact the claimant, and attempt to resolve the objection. If the objection is not resolved within sixty (60) days, the liquidator shall file with the Court and serve on the claimant a written response to the objection. The response may be accompanied by a memorandum of law. The claimant and the liquidator may agree in writing to extend these deadlines. Any such agreement must be filed with the Court.
(4) Corporate representation. If the claimant is an entity other than a natural person, an attorney admitted to practice in Pennsylvania must enter an appearance for the claimant within sixty (60) days of the filing of the objection, or the Court may dismiss the objection.
(5) Pro hac vice admission. If a claimant wishes to be represented by an attorney not admitted to practice in Pennsylvania, that attorney must be admitted to practice pro hac vice, in accordance with Pa.R.C.P. No. 1012.1, Pa.B.A.R. 301, and 204 Pa. Code § 81.505, within sixty (60) days of the filing of the objection, or the Court may dismiss the objection.
(d) Resolution of objections.
(1) Scheduling hearing. Upon receipt of the liquidator’s response to the objection, the Court shall establish a time for a hearing.
(2) Assignment of Judge. Objections may be assigned to a single Judge for disposition.
(3) Assignment of referee. Upon the parties’ request or on its own initiative, the Court may appoint a referee to hear the objection and submit to the Court a recommended decision, which shall include findings of fact, conclusions of law, and a proposed order.
(e) Referees.
(1) Compensation. Referees serve at the pleasure of the Court and shall be compensated from the insurer’s estate at an hourly rate to be set by the Court at the beginning of each calendar year and posted on the website created under Pa.R.A.P. 3779 and on the Court’s website. The hourly rate shall be clearly set forth in the appointment order, subject to any annual adjustment.
(2) Litigation costs. Each party shall bear its own costs associated with the hearing before the referee. Unless the Court orders otherwise, the parties shall share equally the costs for transcribing a hearing and any costs that may be incurred by a referee in complying with Pa.R.A.P. 3781(e)(7) (maintaining a record) and (f)(4) (filing recommended decision).
(3) Conflict of interest. No referee may appear as counsel in any matter connected to the liquidation proceeding.
(4) Authority of the referee. The referee shall have authority to:
(i) receive and consider evidence that is in addition to the information provided with the proof of claim;
(ii) establish discovery schedules where discovery is necessary;
(iii) establish procedures to expedite the presentation of evidence; and
(iv) establish hearing dates and briefing schedules.
(5) Rules of evidence. The Pennsylvania Rules of Evidence shall apply to all evidentiary hearings conducted by a referee.
(6) Efficient and cost effective. The referee shall resolve the objection in a cost-effective and efficient manner, using stipulations and depositions and conducting hearings by teleconference or videoconference where appropriate. The referee may bifurcate a proceeding to address issues seriatim.
(7) Maintain a record. The referee shall maintain a record consisting of everything submitted for consideration. The referee shall also keep a chronological list of the contents of the record. In the case of materials submitted as evidence, the referee shall mark each exhibit offered into evidence as admitted or excluded. While an objection is pending before a referee, nothing directly related to the merits of that objection shall be filed with the Court.
(8) Filing recommended decision. The referee shall file and serve a recommended decision, a proposed order, and a list of all documents submitted by the parties and compiled in accordance with Pa.R.A.P. 3781(e)(7) (maintaining a record).
(9) Failure to cooperate with referee. If a claimant or the liquidator fails to cooperate with the referee or to participate in good faith in proceedings before the referee, the referee may include findings regarding party conduct in the recommended decision and recommend appropriate sanctions. Appropriate sanctions may include a recommendation that the objection be sustained or dismissed.
(f) Exceptions to the referee’s recommended decision.
(1) Time for filing. Any party may file with the Court exceptions to the referee’s recommended decision no later than thirty (30) days after the filing date of the recommended decision. The exceptions shall be served on any other party and the referee.
(2) Content and form of exceptions. In separately numbered paragraphs, the exceptions shall specify the errors in the referee’s recommended decision. There shall be attached as exhibits to the exceptions: the liquidator’s notice of determination; the objection; the liquidator’s response; and the referee’s recommended decision. Exceptions shall be accompanied by a memorandum of law.
(3) Response. Any response to the exceptions shall be filed and served on the other party and the referee within fourteen (14) days of the filing date of the exceptions. A response shall be accompanied by a memorandum of law. The time for response may be extended by agreement of the parties with the approval of the Court.
(4) Filing referee’s record. Within twenty-eight (28) days of the filing of the recommended decision, the referee shall file with the Court the record of the proceedings.
(5) Court action. When exceptions are filed, the Court may, on its own motion or upon application, direct an evidentiary hearing or oral argument. The Court may adopt the referee’s recommended decision in whole or in part, adopt specific findings of fact, modify findings of fact or recommit the matter to the referee with instructions.
(6) Final order. Upon completion of its review of exceptions, the Court will enter a final order sustaining or overruling exceptions in whole or in part. An order of Court sustaining or dismissing an objection as a sanction pursuant to Pa.R.A.P. 3781(e)(9) is the final disposition of a claim.
(7) When no exceptions filed. Any party may apply to the Court for, or the Court on its own initiative may issue, an order either adopting the recommended decision or stating that in the absence of exceptions, the referee’s proposed order is entered as the order of the Court.
(8) Issue preclusion. Findings of fact or conclusions of law in a referee’s recommended decision are not controlling in any subsequent proceeding, unless the Court expressly adopted the findings of fact or conclusions of law.
(9) Waiver. Unless otherwise ordered by the Court, failure to file timely exceptions to a referee’s recommended decision shall be deemed a waiver of further appeal if the Court approves the recommended decision without modification.
Source The provisions of this Rule 3781 adopted June 8, 2012, effective July 30, 2012, the provisions in Rule 3781(e)(7), (8) and (f)(4) shall apply only prospectively to cases assigned to a referee after the effective date, 42 Pa.B. 3569; amended January 17, 2020, effective immediately, 50 Pa.B. 651; amended September 11, 2023, effective January 1, 2024, 53 Pa.B. 5877. Immediately preceding text appears at serial pages (400532) to (400536).
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