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

Mealey's Insurance Insolvency

April 25, 2023
Denial Of Guaranty Association Intervention Bid Affirmed In Hurricane Coverage Row

LAKE CHARLES, La. — A Louisiana federal judge affirmed a magistrate judge’s denial of the Louisiana Insurance Guaranty Association’s (LIGA) motion to intervene as a statutory obliger in a bad faith insurance coverage suit filed against a homeowners insurer over purported hurricane damages, finding that the magistrate correctly determined that LIGA failed to explain its interest in the suit.
April 25, 2023
Liquidators To Appeal Denial Of Bid To Enforce Stay As To N.C. Judgment

NEW YORK — In an April 24 notice of appeal, the joint provisional liquidators (JPLs) of Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) and other debtors said they are challenging a New York federal bankruptcy judge’s ruling that a North Carolina court’s judgment and related activities do not violate an automatic stay entered under the U.S. Bankruptcy Code.
April 24, 2023
Trustee Advises Federal Judge Of Sale Closure In $24M Insurance Policies Sale

FORT LAUDERDALE, Fla. — A liquidating trustee provided a Florida federal judge with notice of closing on the $24 million sale of trust policies related to a company in receivership after the judge approved the sale and a settlement between the trust and trust investment manager Acheron Capital Ltd.
April 20, 2023
No Intervention For Guaranty Association Absent Interest In Hurricane Loss Dispute

LAKE CHARLES, La. — A Louisiana federal judge rescinded an earlier order and denied the Louisiana Guaranty Association’s (LIGA) motion to intervene after ordering supplemental briefing in a homeowners insurance coverage suit against the homeowners’ now-insolvent insurer over hurricane damage, finding that LIGA has failed to show what interest it is seeking to protect by participating in the current litigation.
April 17, 2023
Reinsurer’s Receiver Tells Delaware Court Of Negotiations With ‘Major Counterparty’

WILMINGTON, Del. — In an April 14 update to the Delaware Court of Chancery on addressing the impact of higher-than-expected mortality due to the COVID-19 pandemic and other causes on a proposed rehabilitation plan, the receiver for Scottish Re (U.S.) Inc. in Rehabilitation (SRUS) reports pursuing negotiations with “a major counterparty."
April 14, 2023
Bankruptcy Judge Stays Adversary Proceeding After Ruling In Main Case

NEW YORK — After denying a motion in a bankruptcy case to enforce a stay, a New York federal bankruptcy judge stayed an adversary proceeding for declaratory judgment that four North Carolina insurers filed against Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) and other debtors.
April 14, 2023
Fla. Receiver Seeks Approval To Pay Consultants In Property Insurer’s Liquidation

TALLAHASSEE, Fla.— The Florida Department of Financial Services (DFS) moved a Florida state court to approve compensation of outside contractors to assist with the receivership of United Property and Casualty Insurance Co. (UPCIC), a Florida company ordered into liquidation, asserting that while DFS has the authority under Florida law to hire outside contractors, their compensation must be approved by the court.
April 12, 2023
Bankruptcy Judge Denies Liquidators’ Bid To Enforce Stay As To N.C. Judgment

NEW YORK — Ruling against the joint provisional liquidators (JPLs) of Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) and other debtors, a New York federal bankruptcy judge said a North Carolina court’s judgment and related activities do not violate an automatic stay entered under the U.S. Bankruptcy Code.
April 12, 2023
Homeowners Sue Insolvent Insurer, Guaranty Association Over Hurricane Ida Damage

NEW ORLEANS — Louisiana homeowners sued an insolvent insurer and the Louisiana Guaranty Association (LIGA) as the purported guarantor for the insurer, asserting claims for breach of contract and breach of the duty of good faith and fair dealing related to the insurer’s alleged failure to compensate them for their damage from Hurricane Ida.
April 06, 2023
Hurricane Damage Suit Against Insolvent Insurer Remanded For Lack Of Diversity

NEW ORLEANS — A Louisiana federal judge granted insureds’ motion for leave to file an amended complaint and ordered the case to be remanded to state court in their breach of contract suit alleging that a now-insolvent insurer failed to provide adequate payment for alleged property damage related to Hurricane Ida, finding that adding the Louisiana Insurance Guaranty Association (LIGA) as the successor-in-interest to the insurer defeats “diversity of citizenship between the parties.”
April 06, 2023
Judge Stays Hurricane Damage Insurance Coverage Row Due To Insurer’s Liquidation

NEW ORLEANS — A Louisiana federal judge issued a stay in an insurance coverage dispute after an insured purportedly submitted proof of loss from Hurricane Ida to his now-insolvent homeowners insurer, finding that Louisiana law requires proceedings involving an insolvent insurer to be stayed for six months.
April 05, 2023
Reinsurer In Asbestos Coverage Liabilities Row Notifies Court Of Liquidation Order

OMAHA, Neb. — Parties in a federal suit in Nebraska against reinsurers over the $157.2 million settlement that National Indemnity Co. (NICO) reached with Montana regarding alleged asbestos exposures have notified the court of developments in two other proceedings, including an order of liquidation entered against a defendant.
April 03, 2023
Reinsurer’s Receiver Is Still Assessing Mortality Info Impact On Rehab Proposal

WILMINGTON, Del. — Assessing the impact of higher-than-expected mortality due to the COVID-19 pandemic and other causes on a proposed rehabilitation plan is expected to take an additional 14 days, the receiver for Scottish Re (U.S.) Inc. in Rehabilitation (SRUS) tells the Delaware Court of Chancery in a March 31 letter.
April 03, 2023
All Claims Against Guaranty Association Dismissed In Shipyard Asbestos Exposure Suit

NEW ORLEANS — A Louisiana federal judge on March 31 granted a dismissal motion filed by the Louisiana Insurance Guaranty Association (LIGA) as the alleged statutory obligor for policies issued by Lamorak Insurance Co., a now-insolvent insurer, in a man’s suit for injuries purportedly related to asbestos exposure while he worked at the shipyard, finding that all claims against LIGA are barred by the Longshore and Harbor Workers’ Compensation Act (LHWCA).
March 29, 2023
Judgment Granted To D&O Insurer In Coverage Dispute Involving Insolvent Insurer

KANSAS CITY, Kan. — A Kansas federal judge granted a liability insurer’s cross-motion for judgment on the pleadings in its suit involving an insolvent insurer and seeking a declaratory judgment that the directors and officers (D&O) policy issued to its insured does not provide coverage for claims in an underlying multidistrict litigation antitrust dispute, finding that the prior litigation and managed care activities policy exclusions preclude coverage.
March 22, 2023
Magistrate Issues Stay In Hurricane Coverage Suit Against Insolvent Insurer

BATON ROUGE, La. — A Louisiana federal magistrate judge issued a stay in a coverage dispute filed by a homeowner against his insurer after Hurricane Ida caused purported property damage, finding that a stay is required pursuant to the terms of a consent order appointing the Florida Department of Financial Services (DFS) as receiver for the insurer in liquidation and by Louisiana law requiring a six-month stay in proceedings involving an insolvent insurer.
March 22, 2023
Final Dismissal Issued In Wind Damage Suit Against Florida Guaranty Association

PENSACOLA, Fla. — A Florida state court issued a final dismissal order in a homeowners’ suit over wind damage coverage against the Florida Insurance Guaranty Association (FIGA) as statutory receiver for an insolvent insurer after the homeowners filed a notice of voluntary dismissal.
March 21, 2023
La. Panel Affirms Intervention Denial In Class Suit Against Guaranty Association

NEW ORLEANS — A Louisiana appellate court affirmed a trial court’s decision that residents of a housing development built on the site of a former landfill in New Orleans could not intervene in a class action over failure to disclose the presence of toxic substances, including arsenic, mercury and lead in the landfill’s soil, filed against the city of New Orleans, a school board, the Housing Authority of New Orleans (HANO), its insurers and the Louisiana Insurance Guaranty Association (LIGA), finding that the residents lack a right to intervene because “the requisite element of connexity does not exist.”
March 16, 2023
Liquidators’ Motion For Enforcement Of Stay Opposed In Federal Bankruptcy Court

NEW YORK — Arguing in part that judicial estoppel and the law of the case doctrine require denial, insurers filed opposition in New York federal bankruptcy court to a motion in which the joint provisional liquidators (JPLs) of Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) and other debtors seek enforcement of a stay.
March 15, 2023
Georgia Panel Rules, Says Assignment Of Liability To Insolvent Insurer Not Void

ATLANTA — A Georgia appeals court on March 14 affirmed in part a lower court’s grant of summary judgment for the recipient of structured settlement payments who sued the insurer making the payments from an annuity, agreeing that the insurer is not absolved of liability under the settlement agreement.
March 15, 2023
Judge Grants Motion To Sever In Asbestos Coverage Suit Involving Insolvent Insurer

NEW ORLEANS — A Louisiana federal judge granted a consent motion to sever and stay claims against purported insurers of a now-bankrupt company that is a defendant in a woman’s asbestos liability suit against a shipyard and others, including an insolvent insurer.
March 13, 2023
Rehabilitator Counterclaims In Independent Auditor’s Declaratory Judgment Action

MINNEAPOLIS — In an outside auditor’s Minnesota federal case seeking declaratory judgment “to clear the cloud of threatened litigation” and denying that it caused or contributed to a run-off insurer’s statutory rehabilitation, the rehabilitator has asserted counterclaims for professional negligence/accounting malpractice, breach of fiduciary duty and breach of contract.
March 10, 2023
New York Justice Approves Adjudication Procedures For Insolvent Auto Insurer

NEW YORK — A New York state justice issued an order approving the application of the liquidator of Global Liberty Insurance Company of New York for adjudication procedures in connection with claims under policies covered by security funds, as well as those not covered by security funds.
March 09, 2023
Judge Dismisses Guaranty Association In Suit Claiming Shipyard Asbestos Exposure

NEW ORLEANS — A Louisiana federal judge on March 8 granted an ex parte dismissal motion filed by the Louisiana Insurance Guaranty Association (LIGA) and a man suing for injuries purportedly related to asbestos exposure while he worked at a shipyard, dismissing the claims against LIGA as a statutory obligor for Lamorak Insurance Co., a now-insolvent insurer, but reserving the man’s right to pursue claims against others, including LIGA as related to other insurers.
March 08, 2023
Recommendation Issued Barring D&O Coverage, Excluding Under Insolvency Exclusion

CENTRAL ISLIP, N.Y. — A New York federal magistrate judge issued a report recommending that a specialty insurer’s cross-motion for judgment on the pleadings be granted in a Medicare Advantage (MA) plan insurer’s suit seeking a judgment that the specialty insurer is obligated to provide a defense and reimburse the plan insurer for losses in a suit filed against it, finding that coverage is barred under one policy’s related claims provision and by both policies’ insolvency exclusions.