Insurance Guaranty Association Can't Be Held Liable for Penalties, Accrued Interest

In a case of first impression, the Court of Appeals in the nation's capital ruled that the District of Columbia Insurance Guaranty Association cannot be held liable for penalties and accrued interest owed to a permanently disabled worker.   The guaranty association was created to pay covered claims on behalf of insolvent carriers. The D.C. Court of Appeals said a claim for statutory late-payment penalties does not constitute a covered claim "because it arises out of statutory obligations rather than out of the insolvent insurer's policy." Horace Hensley has received pe...