What happens if a claim is within the coverage of both an insolvent and a solvent insurer?

When a claim falls within the coverage of both an insolvent insurer and a solvent insurer, the standard practice is that the solvent insurer's coverage must be exhausted first. This approach is grounded in the principles of insurance and insolvency law, where the available resources of the solvent insurer are utilized to satisfy the claim before considering any coverage from the insolvent insurer.

The rationale behind this is that a solvent insurer is still capable of fulfilling its obligations, thereby ensuring that the insured party receives compensation and support promptly. This procedure streams the claims process, allowing stakeholders to manage the situation effectively without complications from the insolvent insurer's financial limitations.

In summary, exhaustively utilizing the resources of the solvent insurer before tapping into the coverage provided by an insolvent one ensures that claims are managed in the most efficient and fair manner possible, preserving the integrity of the claims process for all involved.