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all anticipated recoveries on account of salvage, whether or
not the salvage is treated, or may be treated, as an asset
for state statutory accounting purposes. * * * [And]
includes anticipated recoveries on account of subrogation
claims arising with respect to paid or unpaid losses.
Case law relevant to the meaning of estimated salvage
recoverable is limited. The Supreme Court in a century-old case
explained salvage rights as follows: “[T]he insurer, when he has
paid * * * the assured * * * is entitled, by way of salvage, to
the benefit of anything that may be received”. Phoenix Ins. Co.
v. Erie & W. Transp. Co., 117 U.S. 312, 321 (1886), cited in
Continental Ins. Co. v. United States, 200 Ct. Cl. 552, 474 F.2d
661 (1973). (Emphasis added.)
Black's Law Dictionary 1280, 1340 (7th ed. 1999) defines
“recovery” as “the regaining or restoration of something lost or
taken away”, and it defines “salvage” (utilized largely in the
property and casualty insurance industry) as “property saved or
remaining after a fire or other loss, sometimes retained by an
insurance company that has compensated the owner for the loss.”
(Emphasis added.)
In essence, Blue Cross contends that, because under its
health insurance plans it is contractually liable for the full
potential amount of all claims covered by its insurance plans, it
should be regarded as having a contractual right of recovery or
salvage for all portions of claims with respect to which other
insurance companies and Medicare also have a liability to pay the
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