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Examinator
05-05-2005, 11:26 AM
The CAS said that both A and C were accepted as correct to this question, which was "which of the following are true regarding the ISO PAP?" The acceptance of A and C led to the acceptance or rejection of the following statement.

The insurer will pay any interest accruing after a judgment is entered in any suit the insurer defends, even if the judgment exceeds the policy's coverage limit.

I know that post-judgment interest is covered, and is not subject to the policy limit. But the question is, which presumably is what caused the confusion, on what amount is that interested covered? Say the policy limit is $100,000. Post-judgment interest is 10%. Damages are $150,000 (assume no other damages or supplemental payments). $100,000 in damages is covered by the policy. Is the covered post-judgment interest $15,000 or $10,000?

JustASix
05-05-2005, 02:13 PM
The reason I think they accepted two answers is the use of the phrase "any in terest accrued". The policy states the insurer will pay the interest, but not if the insurer offers to settle, thus they won't pay "any" interest. That was why I thought twice about it.

Examinator
05-05-2005, 02:16 PM
Makes sense. I interpretted it as interest on the judgment, but I see how that could be taken otherwise. Question is still out there, though: $15,000 or $10,000?