Did your insurance settle the claim two years ago on your behalf? If the insurance settled it, they should take care of this for you. I'm not sure how they are still pursuing you if the case was actually ssettled previously...unless the laws in CA are significantly different than they are here in OH. Good luck
This answer is for general information only and is not intended as legal advice regarding your specific situation. In order to assess your legal matter properly and obtain legal advice, you must contact an attorney directly. Provision of this general information does not create an attorney-client relationship.
Your question is confusing because if her insurance company settled the case, no one should be making claims against her. When you say it was settled, who paid, and who was paid? The bottom line is if she's being sued, you need to give the papers to which ever insurer covered your wife at the time.
It sounds like your company settled with one person in the other car, but not the other. The other person may have been working at the time of the accident, and recd workers comp benefits. The workers comp carrier has a right to sue your wife for the money it paid for the work comp claim, and the person has a right to sue for injuries he/she suffered. Turn this over to your ins co, as they will defend the case. if the people suing are not willing to accept the policy limits, or if your company isnt willing to pay the policy limits, you shpuld seek independent counsel from an atty other than the atty hired by the ins co to defend you. You could have exposure to over the limits judgment, depending on how much coverage you have.
Call your insurance company again. The company should defend these claims, unless there were unusual circumstances. The insurance company would not normally have exhausted the limits of available insurance while there were other persons with claims against you, and if it did, it probably should not have done so. Your insurance company would normally defend these claims, if not, hire an attorney to review the entire situation.
In all cases it is advisable to consult an experienced attorney. Nothing stated herein is intended as legal advice for your specific situation, and you should use the information provided solely for the purpose of choosing an experienced attorney for the problems presented.