THOMAS N. O'NEILL, JR., UNITED STATES DISTRICT JUDGE
Plaintiff Michael Besack, a Pennsylvania citizen, filed this action alleging that he was injured while operating a punch press in the course and scope of his employment with Pennsbury Manufacturing Company.
Besack sought damages for medical expenses, wage loss, and pain, suffering and humiliation from the manufacturer of the punch press, Rouselle Corporation, a citizen of Illinois. At the time of the accident, Pennsbury received workmen's compensation insurance coverage from Harleysville Mutual Insurance Company; and Rouselle was insured under a comprehensive general liability policy issued by Ideal Mutual Insurance Company, with limits in excess of $ 300,000. Because Ideal was declared insolvent in February, 1985, Rouselle filed a claim for defense and indemnification with the Illinois Guaranty Fund, with which Ideal had a policy, and Besack sought recovery against the Pennsylvania Insurance Guaranty Association ("PIGA") under the Pennsylvania Insurance Guaranty Association Act, 40 P.S. § 1701.101 et seq.
To date, Harleysville has paid a total of $ 68,374.93 in workmen's compensation benefits to Besack. The parties have agreed to settle all claims against Rouselle Corporation and Presses, Inc.
for $ 300,000. According to the stipulation entered by the parties, "the sum of $ 300,000.00 represents the full, fair and reasonable value of all claims against Rouselle Corporation and Presses, Inc. arising out of the occurrence of June 8, 1984 and includes the $ 68,374.93 paid to the plaintiff by Harleysville Mutual Insurance Company." Stipulation, at 4. Of this $ 300,000, Illinois Guaranty has contributed its statutory limit of $ 150,000, and PIGA has paid $ 81,525.07, representing the $ 300,000 less payments by Illinois Guaranty and Harleysville, as well as a $ 100 deductible.
The only issue remaining in the case concerns PIGA's payment. Besack asserts that PIGA cannot offset Harleysville's payment against the amount PIGA must pay Besack, and that PIGA therefore owes Besack an additional $ 68,374.93. PIGA contends that Besack's recovery from Harleysville is not a "covered claim" under the PIGA Act, so that PIGA already has paid its obligations in full. Although the Pennsylvania Supreme Court has not yet addressed this issue, I predict that it would find that Besack is not entitled to any further recovery from PIGA.
PIGA undertakes the obligations of insolvent insurers only to the extent that the obligations are "covered claims" under the PIGA Act. 40 P.S. § 1701.102. "Covered claims" are defined in 40 P.S. § 1701.103(5):
(a) "Covered claim" means an unpaid claim, including a claim for unearned premiums, which arises under a property and casualty insurance policy of an insolvent insurer and is: