Mealey's Insurance Insolvency
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June 14, 2023
Florida Judge Orders Receiver For Insolvent Insurer To Continue Subrogation Suit
TALLAHASSEE, Fla. — A Florida judge issued an order granting a motion filed by the Florida Department of Financial Services as receiver for an insolvent insurer to continue a subrogation action in another state court despite the objections of a general contractor sued in the other state court action.
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June 13, 2023
Bifurcated Settlement Proposed For 1 Defendant In SEC Suit Over Alleged Fraud
DURHAM, N.C. — The U.S. Securities and Exchange Commission on June 12 asked a North Carolina federal court to approve a bifurcated settlement it negotiated with one of three defendants in a civil suit over a former investment advisory firm’s alleged “series of fraudulent and improper schemes” that defrauded clients of more than $75 million.
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June 12, 2023
Insurers Seek Dismissal Of Appeal Over Partial Stay Of Adversary Proceeding
NEW YORK — Arguing lack of subject matter jurisdiction, appellees asked a New York federal court to dismiss an appeal seeking to overturn a New York federal bankruptcy judge’s order partially staying an adversary proceeding filed by the joint provisional liquidators (JPLs) of Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) and other debtors.
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June 08, 2023
Magistrate Schedules Conference In D&O Policy Row Involving Insurer In Rehab
INDIANAPOLIS — An Indiana federal magistrate judge ordered an insurer in rehabilitation and primary and excess directors and officers (D&O) insurers it sued for breach of contract to appear in an upcoming telephonic conference to discuss case status.
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June 08, 2023
D&O Coverage Dispute Dismissed Per Liquidator And Excess Insurer’s Stipulation
SIOUX FALLS, S.D. — Two days after a liquidator and an excess insurer filed a joint stipulation of dismissal in the liquidator’s suit seeking a declaration that coverage exists under a claims-made excess insurance policy above a directors and officers (D&O) policy with regard to a $21 million wrongful acts claim, a South Dakota federal judge issued a one-page order dismissing the case.
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June 01, 2023
Mich. High Court Orders Briefing In No-Fault Suit Involving Guaranty Association
LANSING, Mich. — The Michigan Supreme Court issued an order directing an insurer, Michigan Property & Casualty Guaranty Association (MPCGA) and conservator for an injured auto-accident passenger who received no-fault benefits from an insurer later declared insolvent, to file briefs in the insurer’s appeal of a decision finding that the uninsured driver of the vehicle involved in the accident was deemed insured under her brother’s policy.
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May 25, 2023
Asbestos Firms Appeal Reilly-Benton’s Settlement With Insurance Association
NEW ORLEANS — Two asbestos law firms have appealed a Louisiana federal bankruptcy judge’s approval of a $1 million settlement between the Chapter 7 trustee for a bankrupt insulation supplier and the Louisiana Insurance Guaranty Association (LIGA), which is obligated to pay covered claims for an insolvent insurer.
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May 25, 2023
Magistrate Recommends Adding Guaranty Association In Insureds’ Wind Damage Suit
LAFAYETTE, La. — Two weeks after a Louisiana federal magistrate judge issued a report recommending granting homeowners’ motion to add the Louisiana Insurance Guaranty Association (LIGA) as a defendant in a suit against their now-insolvent homeowners’ insurer, a federal judge adopted the report and recommendation, finding that the magistrate’s findings were “correct under applicable law.”
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May 23, 2023
Insolvent Insurer Substituted With Guaranty Association In Hurricane Coverage Row
MONROE, La. — A Louisiana federal magistrate judge granted an insured’s request to substitute its insurer that was ordered into liquidation by a Florida state court with Louisiana Insurance Guaranty Association (LIGA) in a breach of contract suit against the insurer seeking coverage for purported hurricane damage to commercial property.
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May 23, 2023
Bankruptcy Judge Approves Trustee’s Settlement Request In Debtor Insurer Case
WILMINGTON, Del. — A Delaware federal bankruptcy judge issued an order granting a trustee’s motion to approve specified settlements in an insolvent insurer’s Chapter 7 bankruptcy proceeding, finding that the settlements were “fair and equitable” and in the best interests of the estates and creditors.
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May 16, 2023
Insurer Does Not Oppose 1 Of 3 Stay Requests In Asbestos Liabilities Row
OMAHA, Neb. — After three defendants cited Pennsylvania liquidation proceedings in asking a Nebraska federal court for stays in a suit over the $157.2 million settlement National Indemnity Co. (NICO) reached with Montana regarding alleged asbestos exposures, NICO says in a May 15 filing that it does not oppose a stay against one of the defendants.
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May 15, 2023
Panel: Insolvent Insurer’s Reinsurer Can’t Claim Attorney Fees As General Creditor
CHICAGO — An Illinois appellate court affirmed a lower court’s determination that an insolvent insurer’s reinsurer seeking payment of a judgment for unpaid premiums, attorney fees and arbitration interest had a claim of a general creditor, rather than one for costs and expenses of administration, finding that based on statutory language and case law, the trial court correctly determined the reinsurer’s priority level.
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May 15, 2023
Guaranty Association Must Defend Insured Drywaller In Underlying Row, Insurer Says
JACKSONVILLE, Fla. — A New Mexico commercial general liability insurer defending its insured drywall company in a construction defects action filed a contribution suit in a Florida federal court against the Florida Insurance Guaranty Association (FIGA), as successor in interest to a now-insolvent Florida commercial liability insurer of the drywaller, asserting that FIGA is liable for defense costs and indemnity in the underlying action.
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May 15, 2023
Judge Remands Asbestos Exposure Case Against Insolvent Insurer, Others
NEW ORLEANS — A Louisiana federal judge granted a decedent’s daughter’s motion to remand in an asbestos exposure case filed against a shipyard, related parties and a now-insolvent insurer, finding that because the federal claims have been dismissed or settled, case law and common law support remand.
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May 11, 2023
Judgment Issued For Guaranty Association In Late Filed Asbestos Exposure Case
NEW ORLEANS — A Louisiana federal judge granted the Louisiana Insurance Guaranty Association’s (LIGA) summary judgment motion in a suit filed against it and a shipyard where a man says his exposure to asbestos there caused his mesothelioma, finding that the claim is not a covered claim as to LIGA because it was filed after the statutory claims filing period.
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May 11, 2023
On Settlement Report, Judge Orders Dismissal Of Duties Spat Over Reinsurance Trust
RICHMOND, Va. — Saying she was advised that the lawsuit concerning a reinsurance trust for an insolvent insurer “has been settled,” a South Carolina federal judge ordered dismissal of the case, which was on remand from the Fourth Circuit U.S. Court of Appeals.
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May 10, 2023
Pretrial Attachment Of Assets Granted In Suit Over Tax-Sharing Agreement
RALEIGH, N.C. — A North Carolina federal judge on May 9 granted an emergency motion by plaintiffs in a dispute over a tax-sharing agreement (TSA) for pretrial attachment of the defendant’s assets.
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May 09, 2023
Citing Liquidation Order, Reinsurer Seeks Stay Of Claims In Liabilities Row
OMAHA, Neb. — Arguing that two abstention doctrines apply because of Pennsylvania liquidation proceedings, a reinsurer moved in Nebraska federal court to stay claims against it in a suit over the $157.2 million settlement National Indemnity Co. (NICO) reached with Montana regarding alleged asbestos exposures.
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May 08, 2023
Hurricane Coverage Suit Adding Guaranty Association Remanded For No Diversity
NEW ORLEANS — A Louisiana federal judge remanded to state court an insured’s hurricane coverage suit against a now-insolvent insurer and Louisiana Guaranty Association (LIGA), finding that adding LIGA in an amended complaint defeated diversity jurisdiction.
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May 05, 2023
Insurance Guaranty Association Intervention Denied In Hurricane Coverage Suit
LAKE CHARLES, La. — A Louisiana federal magistrate judge denied the Louisiana Insurance Guaranty Association’s (LIGA’s) motion to intervene in a homeowner’s suit against a now-insolvent insurer seeking coverage for hurricane damage to her home, finding that LIGA “is not an intervenor of right” because LIGA’s statutory rights as an intervenor did not apply until after the insurer was deemed insolvent, which occurred after the suit was filed.
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May 05, 2023
Receiver Who Sought Rehab Has Concluded That Reinsurer Should Be Liquidated Instead
WILMINGTON, Del. — The receiver for Scottish Re (U.S.) Inc. in Rehabilitation (SRUS) has concluded that SRUS should be liquidated instead of rehabilitated, saying in a letter to the Delaware Court of Chancery that he intends to move for an order of liquidation in about 45 days.
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May 01, 2023
Diocese Seeks Liquidation Of Insurer, Reinsurer, Cites ‘Looting’ By Management
WILMINGTON, Del. — The Roman Catholic Diocese of Brooklyn, N.Y., seeks a writ of mandamus from the Delaware Superior Court to compel the Delaware insurance commissioner to start liquidation proceedings against Arrowood Indemnity Co., asserting that the commissioner is aware of the insolvency and must start liquidation and remove the current management, which purportedly “has been intentionally looting the company.”
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April 28, 2023
Joint Status Report Filed In Risk-Corridor Dispute Involving Insolvent Insurers
WASHINGTON, D.C — The federal government and a subclass member filed a joint status report in liquidated insurers’ 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, with the parties not disputing the amounts owed but the type of judgment to be entered against the subclass member.
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April 26, 2023
$1.4M Remains In Insolvent Insurer’s Fund Per U.S. Virgin Islands Commissioner
ST. THOMAS, Virgin Islands — The Virgin Islands commissioner of insurance filed an accounting and status report with a U.S. Virgin Islands federal court showing that more than $1.4 million remains in a fund set up for an insolvent insurer and no new payments have been made to claimants or policyholders since the previous status report issued in January.
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April 26, 2023
Judge Orders Hearing In Chapter 11 Proceedings Of Defunct Workers’ Comp Insurer
WILMINGTON, Del. — A Delaware bankruptcy judge issued an order scheduling an omnibus hearing in the Chapter 11 bankruptcy proceeding of Patriot National Inc., a workers’ compensation insurance firm for which a litigation trust is now acting as successor-in-interest.