Mealey's Insurance Insolvency
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February 22, 2024
Property Owner Sues Guaranty Association, Says Insolvent Insurer Didn’t Cover Loss
SANFORD, Fla. — A property owner on Feb. 16 filed a complaint in a Florida state court against the Florida Insurance Guaranty Association (FIGA), asserting that it has been statutorily “activated” to pay outstanding claims for a now-insolvent property insurer that was previously ordered into liquidation.
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February 21, 2024
Life Insurer Files Third-Party Complaint Against Assignee, Seeks Reimbursement
CINCINNATI — A life insurer that was sued in Ohio federal court for breach of contract by the liquidating trustee for a viatical settlement provider filed its answer and a third-party complaint against an assignee of a life insurance policy, seeking reimbursement for any amount the insurer is required to pay the trustee.
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February 21, 2024
North Carolina Guaranty Association Seeks Ruling That It’s Not MSP Primary Plan
RALEIGH, N.C. — The North Carolina Insurance Guaranty Association (NCIGA) sued the U.S. the Department of Health and Human Services (HHS), its secretary and the Centers for Medicare and Medicaid Services (CMS) in a North Carolina federal court, seeking a determination that the NCIGA is not a primary plan under the federal Medicare Secondary Payer (MSP) statute and therefore not obligated to reimburse CMS regarding a workers’ compensation claim involving an insolvent insurer.
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February 16, 2024
Bonding Company’s Objection Overruled In Row With Insolvent Insurer’s Liquidator
HARRISBURG, Pa. — A Pennsylvania appellate court on Feb. 15 overruled an insurance bonding company’s objection in a suit filed against it by the Pennsylvania insurance commissioner, as liquidator for an insolvent insurer, seeking to void the insurer’s $3.02 million wire transfer to the bonding company, finding that the objection must be overruled because the transfer is voidable as a preferential transfer.
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February 15, 2024
Liquidation Order Leads To Permanent Stay For 1 Defendant In Coverage Row
NEWARK, N.J. — All claims against one defendant in a suit in New Jersey federal court over environmental investigation and remediation have been permanently stayed because of a liquidation and injunction order issued by the Delaware Court of Chancery.
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February 15, 2024
Disputes Over Liquidation Proposal Sent To Mediation In Vesttoo Chapter 11 Cases
WILMINGTON, Del. — A Delaware federal bankruptcy judge has referred matters pertaining to a proposed Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of its affiliates to mediation.
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February 14, 2024
Consent Decree Entered Under 1 Dismissal In Case Over Alleged Counterfeit Policies
LOUISVILLE, Ky. — A variety of claims and parties have been dismissed under agreements in a sprawling suit over allegations of fraud, trademark counterfeiting and trademark infringement involving captive reinsurance programs, with a Kentucky federal court permanently enjoining two defendants “from future infringement of Plaintiffs’ trademarks.”
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February 14, 2024
Claims Against LIGA Tossed In Asbestos Coverage Suit Involving Insolvent Insurer
NEW ORLEANS — A Louisiana federal judge granted summary judgment to the Louisiana Insurance Guaranty Association (LIGA) and dismissed an asbestos liability suit against it, finding that the claims for asbestos-related lung cancer against LIGA, as the statutory obligor for a now-insolvent insurer, are not covered claims.
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February 12, 2024
Condo Association Says It Settled Hurricane Coverage Row With Guaranty Association
SANFORD, Fla. — A condominium association notified a Florida state court of its settlement with the Florida Insurance Guaranty Association (FIGA), the receiver for the now-insolvent commercial property insurer that the condo association sued seeking coverage for damage caused by Hurricane Irma.
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February 08, 2024
Dismissal Granted In Asbestos Liability Case Involving Guaranty Association
NEW ORLEANS — A Louisiana federal judge on Feb. 7 granted a motion for voluntary dismissal of a man’s claim that he was exposed to asbestos through contact with a specific worker at a shipyard but keeping other claims regarding exposure against the shipyard, related parties, multiple insurers and the Louisiana Insurance Guaranty Association (LIGA).
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February 06, 2024
Hail Damage Suit Against Guaranty Association Tossed For Lack Of Jurisdiction
BATON ROUGE, La. — A Louisiana federal judge dismissed a breach of contract and bad faith suit regarding failure to compensate a homeowner for hailstorm damage against a now-insolvent insurer and the Louisiana Insurance Guaranty Association (LIGA), finding that the court lacks subject matter jurisdiction because both LIGA and the homeowner are citizens of Louisiana.
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February 01, 2024
Accounting Denied As To Disputed $185 Million Attorney Fees In Insurers’ ACA Row
WASHINGTON, D.C. — A U.S. Court of Federal Claims judge denied in part objecting class members’ motion for an accounting of a vacated $185 million attorney fee award in suits filed by insurers, some of which are insolvent, over risk-corridor payments under the Patient Protection and Affordable Care Act (ACA), finding that because the court has not yet considered a renewed fee request, the accounting is unnecessary at this time.
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February 01, 2024
Federal Judge Tosses Hurricane Coverage Case After Suspending Homeowner’s Counsel
LAFAYETTE, La. — A Louisiana federal judge adopted a magistrate judge’s report and recommendation to dismiss for failure to prosecute after a homeowner failed to attend a status conference in her hurricane coverage suit against her now-insolvent insurer following the judge’s termination of her legal counsel.
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February 01, 2024
Late Objection Bid Draws Opposition In Vesttoo Chapter 11 Cases
WILMINGTON, Del. — Asserting that “Vesttoo’s defrauded creditors have overwhelmingly voted to accept” a Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of its affiliates, two creditors are among the entities urging a Delaware federal bankruptcy court to reject a motion to allow an untimely objection to claims against one of the affiliates.
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January 31, 2024
4th Circuit Hears $524M Guaranty Case Involving Reinsurance Agreement
RICHMOND, Va. — In oral argument before a Fourth Circuit U.S. Court of Appeals panel, the issuer of a guaranty contended that a judgment against him enforcing an arbitration award for $524 million plus interest should be overturned, and a Puerto Rico-based insurer countered that the terms of the agreements in question and res judicata both support affirmation.
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January 30, 2024
Vice Chancellor Mostly Denies Dismissal In Suit Over Asset Dissipation
WILMINGTON, Del. — Ruling on four long-pending motions in a suit over a complex asset-swap transaction that the plaintiffs argue resulted in the “dissipation of at least $250 million,” a Delaware vice chancellor granted dismissal only as to a claim of fraudulent trading under Cayman Islands law.
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January 25, 2024
Plaintiffs Make Class Certification Arguments In DUFTA Row Involving Insurer
WILMINGTON, Del. — Asserting that their Delaware Uniform Fraudulent Transfer Act (DUFTA) claims “focus exclusively on Defendants’ conduct and circumstances,” policyholders and agents challenging an alleged scheme to strip capital from an insurance subsidiary on which more than 1 million policyholders depend for long-term care (LTC) disability benefits urged the Delaware Chancery Court to certify their proposed class.
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January 25, 2024
Vesttoo Bankruptcy Debtors: Proceeding In Israel Would Be More Efficient
WILMINGTON, Del. — A variety of objections have been lodged in Delaware federal bankruptcy court regarding the Official Committee of Unsecured Creditors’ Chapter 11 plan of liquidation for Vesttoo Ltd. and 48 affiliates, including one in which the debtors argue that the cases should be dismissed “so that more efficient insolvency proceedings can be filed in Israel.”
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January 23, 2024
Dismissal Stipulated In Asbestos Coverage Dispute Involving Guaranty Association
COLUMBIA, S.C. — Remaining defendant insurers stipulated to dismissal in a South Carolina federal court of cross-claims by or against two defendant insurers that were previously dismissed from a receiver’s asbestos coverage suit against insurers and the South Carolina Property and Casualty Insurance Guaranty Association.
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January 23, 2024
Magistrate Extends Discovery Deadline In Rehabilitator’s Suit Against D&O Insurers
INDIANAPOLIS — An Indiana federal magistrate judge granted parties’ joint motion to extend a discovery deadline in a breach of contract suit filed by the Pennsylvania insurance commissioner, as rehabilitator of an insurer, against primary and excess directors and officers (D&O) insurers.
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January 23, 2024
Homeowner Sues Insurer, Guaranty Association, Seeks Coverage For Hurricane Damage
JACKSONVILLE, Fla. — A Florida homeowner sued his now-insolvent insurer and the Florida Insurance Guaranty Association (FIGA) in a Florida state court, asserting claims for breach of contract and violations of Florida law for failure to adequately cover purported losses related to Hurricane Ian.
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January 23, 2024
Judge OKs Adding Guaranty Association In Bad Faith Suit Against Insolvent Insurer
NEW ORLEANS — A Louisiana federal judge granted a homeowner’s motion to file an amended complaint to add as a defendant the Louisiana Insurance Guaranty Association (LIGA) in a breach of contract and bad faith suit against a now-insolvent homeowners insurer over its purported failure to adequately cover damage caused by Hurricane Ida, finding that amending the complaint is necessary due to the insurer’s insolvency and that the case must be remanded because complete diversity is destroyed.
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January 22, 2024
Insolvent Insurers’ Owner Opposes Injunction After Ordered To Pay $576M Judgment
GREENSBORO, N.C. — The owner of insolvent insurers filed a brief in a North Carolina federal court, opposing an insurer’s motion for an injunction to prevent the owner from transferring assets after a North Carolina federal judge issued a judgment requiring the owner to pay more than $576 million pursuant to a personal guaranty for a reinsurance agreement.
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January 22, 2024
Bad Faith Claim Against Guaranty Association Dismissed In Hurricane Coverage Row
NEW ORLEANS — A Louisiana federal judge granted partial dismissal to the Louisiana Insurance Guaranty Association (LIGA), which was substituted for an insolvent homeowners insurer, in a breach of contract suit over damages from Hurricane Ida, finding that the claims for bad faith, mental anguish, penalties, pre-insolvency costs and interest must be dismissed because they are not covered claims for which “LIGA is the statutory successor.”
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January 19, 2024
Dismissal Denied In Suit Against Life Insurer Regarding ‘Leapfrogging’ Policy
CINCINNATI — An Ohio federal judge denied dismissal of a breach of contract suit filed against a life insurer by the liquidating trustee for a viatical settlement provider, finding that the complaint was timely filed because Ohio law applies to the dispute over a “leapfrogging” life insurance policy that was sold to the trust.