An insurer could be entitled to freeze legitimate settlement funds if the insured was engaged in fraudulent activity against the insurer in an unrelated claim.
A Provincial Motor Vehicle Insurer ("ICBC") was required to pay an insured $200,000 for a legitimate insurance claim. ICBC discovered that the insured brought a fraudulent claim after the occurence of the legitimate claim. ICBC brought an application by for a Mareva injunction against the Insured to freeze the settlement of the actual claim. The application was denied on the basis that ICBC did not establish that the funds would be dissipated prior to the resolution of the fraudulent claim.
Here is the case citation: Insurance Corp. of British Columbia v. Patko  B.C.J. No. 1141. British Columbia Supreme Court. Fisher, J. February 15, 2007.