Rebuffed by the Commonwealth Court, Pennsylvania insurance regulators will now ask a state superior court to rule whether Kingsway Financial violated state law through its disposition of a failing subsidiary.

Two weeks after a Pennsylvania Commonwealth Court found no fault in the way Kingsway Financial Services distributed shares of its troubled subsidiary, Lincoln General Insurance Co., the head of the Canadian company announced his resignation.

The Pennsylvania Insurance Department said it plans to appeal a Commonwealth Court decision to dismiss its challenge against Kingsway Financial Services over how it distributed shares of a troubled subsidiary.

The Pennsylvania Insurance Department and Kingsway Financial Services have both filed complaints in Commonwealth Court regarding the distribution of shares of troubled insurer Lincoln General.

The Pennsylvania Department of Insurance is planning legal action against a Canadian property-casualty insurer who tried to divest itself of a troubled subsidiary by donating company shares to several charities.