Mealey's Insurance Insolvency : Mealey's : Legal News & Analysis

Mealey's Insurance Insolvency

September 06, 2022
Judge Grants Stay To Investment Manager On Sale Of Its Insurance Policies

FORT LAUDERDALE, Fla. — A federal judge on Aug. 29 granted a trust investment manager’s request to stay the sale of policies terminating the trust in which the manager owns “fractional interests,” pending appeal to the 11th Circuit U.S. Court of Appeals of the sale order of insolvent insurance policies.
August 31, 2022
4th Circuit Partly Vacates Ruling In Trustee Duties Spat Over Reinsurance Trust

RICHMOND, Va. — Ruling in an Aug. 29 unpublished opinion that part of a trust agreement “acted as a gatekeeping clause against deposit of nonnegotiable assets,” a Fourth Circuit U.S. Court of Appeals panel partly vacated and remanded a dispute over a reinsurance trust for an insolvent insurer.
August 31, 2022
SEC Alleges Investment Adviser, Execs Defrauded Clients Of More Than $75 Million

DURHAM, N.C. — In an Aug. 30 complaint filed in North Carolina federal court, the U.S. Securities and Exchange Commission alleges that two individuals and an investment adviser one of them owned “raided their advisory clients’ assets through a series of fraudulent and improper schemes” that defrauded clients including insurance companies of more than $75 million.
August 30, 2022
2nd Release On Bond Granted, New Trial Continued In Alleged Bribery Scheme Suit

STATESVILLE, N.C. — After the Fourth Circuit U.S. Court of Appeals vacated convictions in an alleged $2 million bribery scheme and remanded the case for a new trial, a North Carolina federal judge on July 26 granted a consultant’s unopposed motion for release and bond pending further proceedings, then on Aug. 29 entered an oral order continuing the new trial “to the March 2023 criminal term,” the case docket shows.
August 30, 2022
Insurer’s Liquidators Ask Federal Bankruptcy Court To Enforce, Expand Stay

NEW YORK — A hearing in New York federal bankruptcy court has been set for Sept. 22 regarding an Aug. 26 motion by the joint provisional liquidators (JPLs) of Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) and other debtors to enforce and extend a stay relating to the case.
August 29, 2022
Judge Remands Insolvent Insurer Dispute, Cites Lack Of Subject Matter Jurisdiction

TRENTON, N.J. — A New Jersey federal judge on Aug. 25 granted the New Jersey insurance commissioner’s motion to remand in a suit against the Pennsylvania insurance commissioner as rehabilitator of an insolvent insurer in a dispute over long-term care policy premium rate changes absent proper authority, finding that the federal court lacks subject matter jurisdiction because the complaint fails to raise a federal question and the parties lack diversity.
August 29, 2022
Judge Dismisses Tort, Fraud Claims In Asbestos Suit Against Insurers, Suppliers

NEW ORLEANS — A Louisiana federal judge on Aug. 24 granted partial summary judgment to several defendants in an asbestos liability suit against an insolvent insurer and other insurers, companies they insured and related defendants, finding that the claims for intentional tort and fraud should be dismissed because the plaintiffs failed to prove that the decedent’s lung cancer resulted from the defendants’ conduct or that there was fraudulent intent.
August 26, 2022
S.D. High Court Finds Statute Extends Claim Notice To 180 Days After Liquidation

PIERRE, S.D — The South Dakota Supreme Court held Aug. 24 that the state’s liquidation statute gives a state insurance liquidator an additional 180 days from the date of a liquidation order to file a notice of claim, finding that although extending the deadline may provide “coverage that would not otherwise exist,” the “apparent intent” of the statute is to enable “the liquidator to mitigate the adverse consequences of an insurer’s insolvency” by giving more time to submit “claims that would otherwise be time-barred.”
August 25, 2022
Summary Judgment Denied In Asbestos Liability Suit Against Insolvent Insurer

NEW ORLEANS — A Louisiana federal judge on Aug. 17 denied summary judgment to a defendant shipyard operator in a wrongful death asbestos suit against numerous defendants, including an insolvent insurer, finding that there is sufficient evidence regarding the facts as to whether the decedent’s exposure to asbestos at the shipyard was a “substantial factor” in his mesothelioma and death.
August 23, 2022
Judge Grants Dismissal In Asbestos Liability Suit Against Insolvent Insurer

NEW ORLEANS — A federal judge in Louisiana on Aug. 16 granted a pipe fitter’s motions to dismiss claims against a shipbuilder, insolvent insurer and others in an asbestos liability dispute, finding that the pipe fitter, who says he was exposed to asbestos though his work for the shipbuilder, has settled his dispute with the named defendants.
August 23, 2022
Counterclaim Against Insolvent Insurer Partially Dismissed In Risk-Corridor Suit

WASHINGTON, D.C — A federal judge on Aug. 19 denied in part and granted in part an insolvent insurer’s motion to dismiss the U.S. government’s counterclaim against it in a suit seeking a declaratory judgment that the government owes insurers millions of dollars under the Patient Protection and Affordable Care Act (ACA) risk-corridor program, finding that the court has jurisdiction over the counterclaims but that the government’s “claims for offset and interest fail as a matter of law.”
August 22, 2022
Insurer Has No Duty To Defend Whistleblower Suit Against University, Panel Affirms

FRANKFORT, Ky. — A Kentucky appeals panel on Aug. 19 affirmed a lower court’s summary judgment ruling in favor of an insurer trust in its lawsuit disputing coverage for an underlying whistleblower claim brought against the University of Louisville, finding that the insurer has no continuing duty to provide coverage to the university.
August 19, 2022
Federal Judge’s Text Order Requires Updates On Insolvent Insurer’s Liquidation

TOPEKA, Kan. — A Kansas federal judge on Aug. 15 issued a text order requiring the Kansas insurance commissioner, as liquidator of an insolvent medical malpractice insurer, the insolvent insurer’s parent company and others to continue to update the court on the liquidation proceedings and, if not resolved, submit a status report within 14 days of the liquidator’s status report.
August 18, 2022
Shipbuilder Files Brief Opposing Summary Judgment In Asbestos Liability Suit

NEW ORLEANS — A shipbuilder on Aug. 18 filed a brief in Louisiana federal court opposing an asbestos manufacturer’s summary judgment motion after a federal judge lifted a stay against an insolvent insurer in an asbestos liability suit.
August 17, 2022
Vice Chancellor Approves R&Rs On Discovery Disputes In Fraudulent Transfer Suit

WILMINGTON, Del. — Noting that no exceptions were filed, a Delaware Chancery Court vice chancellor on Aug. 12 approved and adopted the findings of a special master regarding discovery disputes in a putative class suit alleging fraudulent transfers from an insurance subsidiary that more than 1 million policyholders depend on for long-term care (LTC) insurance disability benefits.
August 15, 2022
New Hampshire High Court Affirms Claim Deadline In Insolvent Insurer Liquidation

CONCORD, N.H. — The New Hampshire Supreme Court on Aug. 12 affirmed a superior court’s approval of a claim amendment deadline in an insolvent insurer’s liquidation proceeding, finding that the superior court “acted within its discretion” in approving the claim amendment deadline because of the lengthy time the insurer has been in liquidation and because the insurer is not able ‘“to pay all policyholder claimants in full, and it will be unable to issue final disbursements to policyholder claimants until a claim amendment deadline is approved.”
August 11, 2022
Insurer Sues Actuary In Federal Court Over Alleged Scheme Involving Reinsurance

GREENSBORO, N.C. — Alleging, with emphasis added, that an actuary “conspired with others to harm” North Carolina Mutual Life Insurance Co. and in so doing sent an email saying “‘please pillage in moderation,’” the company on June 30 filed a suit in North Carolina federal court asserting nine claims, including Racketeer Influenced and Corrupt Organizations Act (RICO) violations and fraud.
August 09, 2022
Agreement Struck To Extend Objection Deadline On Rehab Plan For Reinsurer

WILMINGTON, Del. — The receiver for Scottish Re (U.S.) Inc. in Rehabilitation (SRUS) and dozens of interested insurers agree that extending the deadline to object to a modified plan of rehabilitation from Aug. 15 to Oct. 1 “may aid to resolve or narrow objections,” they told a Delaware state court in an Aug. 5 joint stipulation that was granted Aug. 11.
August 05, 2022
Receiver, Broker Submit Joint Status Report In Insolvent Health Plan Suit

CHICAGO — An independent fiduciary receiver and insurance broker defendants on July 28 submitted a joint status report pursuant to a federal court’s June 1 order in a breach of duty of care suit against the insurance brokers, updating the court on the status of third-party subpoenas and settlements.
August 05, 2022
Stipulation To Dismiss Agent Filed In Insurers’ $14.5M Suit Against Borrower

RALEIGH, N.C — Parties in a suit against a borrower on Aug. 4 filed a joint stipulation in North Carolina federal court agreeing to voluntarily dismiss the borrower’s agent from a suit filed by three insurers against the borrower, seeking to recover $14.5 million pursuant to a loan agreement for its alleged breach of contract in failing to make a first interest payment.
August 05, 2022
Judge Grants Summary Judgment After Stay Lifted In Suit Against Insolvent Insurer

NEW ORLEANS — A Louisiana federal judge on Aug. 3 granted summary judgment to a shipyard’s insurer in a wrongful death asbestos suit against numerous defendants, including the insurer and an insolvent insurer, finding the absence of “a triable issue” regarding the decedent’s presence at a shipyard when it was insured by the defendant insurer.
August 03, 2022
9th Circuit Won’t Rehear Prior Exclusive Jurisdiction, Abstention Disputes

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Aug. 1 denied a July 1 petition for panel rehearing and rehearing en banc regarding a ruling that affirmed dismissal under the prior exclusive jurisdiction rule of two suits involving the same insurance conservatorship.
August 03, 2022
Investment Manager Files Exhibits Supporting Stay Of Insurance Policy Sale

FORT LAUDERDALE, Fla. — An investment manager for a trust on Aug. 1 submitted notice with a Florida federal court of filing supplemental exhibits in support of its expedited motion to stay a trustee’s sale of policies terminating the trust in which the manager owns a “fractional” interest, pending appeal to the 11th Circuit Court of Appeals of the sale order of insolvent insurance policies.
August 01, 2022
Justice Disallows Suits Of Class 2 Claimants In New York Insurer’s Liquidation

NEW YORK — A New York justice on July 15 issued an order granting a liquidator’s application to disallow the claims of class two claimants for return of title insurance premiums from an insurer in liquidation based upon New York Liquidation Bureau counsel’s affirmation that claims for return of title insurance premiums are not authorized under New York law.
August 01, 2022
Del. High Court Tosses Appeal In Insurer’s Receivership As Lacking Jurisdiction

WILMINGTON, Del. — The Delaware Supreme Court on July 28 dismissed an appeal filed by the founder of an insurer in liquidation who objected to a receiver’s claim determinations in Delaware Chancery Court, finding that the receiver’s claim determinations are not final appealable orders and the founder failed to comply with Supreme Court filing deadlines when appealing the “apparent interlocutory order.”