All proceedings in which the insolvent insurer is a party or is obligated to defend a party in any court in this state shall be stayed for not to exceed six (6) months from the date the insolvency is determined to permit proper defense by the association of all pending causes of action. As to any covered claims arising from a judgment under any decision, verdict or finding based on the default of the insolvent insurer or its failure to defend an insured, the association either on its own behalf or on behalf of the insured may apply to have the judgment, order, decision, verdict or finding set aside by the same court or administrator that made it and may defend against the claim on the merits.