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

Mealey's Insurance Insolvency

October 24, 2022
Pa. High Court Affirms Order Disallowing Funds Diversion By Insurers’ Liquidator

HARRISBURG, Pa. — The Pennsylvania Supreme Court affirmed an appellate court order denying a liquidator’s request for authorization to allocate assets from insolvent insurers’ estates to pay policyholder claims for benefits that exceed applicable statutory guaranty association limits and accrue more than 30 days after the insurance policies were terminated by the liquidations.
October 20, 2022
11th Circuit Tosses Appeal In Row Over Sale Of Asset Manager’s Insurance Policies

ATLANTA — The 11th Circuit U.S. Court of Appeals dismissed an investment manager’s appeal of a district court order granting the sale of policies terminating the trust in which the manager owns an interest, finding that the Circuit Court lacks jurisdiction because the challenged order is not a final decision.
October 18, 2022
Woman Objects To Testimony In Asbestos Liability Suit Involving Insolvent Insurer

NEW ORLEANS — A woman who filed an asbestos liability suit against a shipyard and others, including an insolvent insurer, filed a motion in limine with a federal court in Louisiana, seeking to exclude proposed expert testimony, asserting that the same expert’s testimony was excluded in another Louisiana federal court asbestos liability suit due to the plaintiff’s failure to establish the testimony as admissible hearsay.
October 14, 2022
Judge Approves Agency Request For Consultants In Insolvent Insurer’s Liquidation

TALLAHASSEE, Fla. — A Florida judge issued an order approving the Florida Department of Financial Services’ motion for compensation of outside consultants in anticipation of the assistance needed with its statutory duties as receiver in the liquidation of FedNat Insurance Co.
October 13, 2022
Magistrate Vacates Deadlines In Antitrust Coverage Row Involving Insolvent Insurer

KANSAS CITY, Kan. — A Kansas federal magistrate judge granted a liability insurer and defendant health insurer’s joint motion to vacate certain deadlines in an antitrust coverage dispute involving an insolvent excess insurer, noting the “unique procedural position of this case” where “a portion of the case” was stayed pending resolution of underlying antitrust litigation.
October 12, 2022
Stay Versus Dismissal Argued In Arbitration Bid In Fraud Suit Involving Reinsurance

GREENSBORO, N.C. — Agreeing to arbitration, the parties in an insolvent insurer’s suit against an actuary over an alleged scheme involving reinsurance disputed in recent filings whether the North Carolina federal court case should be stayed or dismissed.
October 11, 2022
Federal Judge Rules On Motions To Dismiss In RICO Suit Against Insolvent Insurer

AKRON, Ohio — A Ohio federal judge issued an order granting certain defendants’ dismissal motions for failure to state claim in a class action filed against Liberty HealthShare Inc., its CEOs and directors by health insurance plan members seeking a declaration that the health plans “were and are illegal contracts” and a ruling that the CEOs or directors were personally liable after Liberty was deemed an insolvent insurer under Virginia Code Annotated Section 38.2-215.
October 10, 2022
Judge Issues Stay In Hurricane Ida Coverage Dispute Against Insolvent Insurer

NEW ORLEANS — An insurance coverage dispute related to Hurricane Ida is stayed and administratively closed for six months, a Louisiana federal judge ruled in an order signed Oct. 7 and docketed Oct. 9, finding that pursuant to Louisiana law and a Fifth Circuit U.S. Court of Appeals decision, proceedings involving an insolvent insurer in federal court shall be stayed to prevent a federal court claimant from preempting other parties in the state court’s asset distribution in the liquidation proceeding.
October 07, 2022
Magistrate Urges Compliance With Status Report In Insolvent Health Plan Suit

CHICAGO — In a minute docket entry, an Illinois federal magistrate judge urged certain insurance broker defendants to continue “efforts to obtain compliance with the document subpoenas identified in the status report” in a breach of duty of care suit against the insurance brokers in connection with the sale of a now-insolvent health plan.
October 06, 2022
Federal Judge Grants Insurer Extension In Liquidator’s $21M Wrongful Acts Suit

SIOUX FALLS, S.D — A South Dakota federal judge granted an insurer’s request for an extension of time to respond to a motion by the liquidator of ReliaMax Surety Co. (RSC) to strike asserted affirmative defenses and for partial summary judgment in the liquidator’s suit seeking a declaratory judgment 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.
October 05, 2022
5th Circuit Affirms Judgment In Row Involving Insolvent Insurer, Holding Company

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals affirmed a district court’s judgment dismissing a Texas attorney’s lawsuit seeking unpaid attorney fees from a holding company that provided commercial vehicle insurance through an insurer that was declared insolvent and put into liquidation.
October 03, 2022
Consolidation Bid Follows Adversary Proceeding In Row Over Bankruptcy Court’s Stay

NEW YORK — Parties in a stay dispute that is playing out in two cases in different jurisdictions will have an Oct. 6 hearing in New York federal bankruptcy court on a motion to consolidate and expedite that court’s proceedings on the issue under a second amended order issued Sept. 30.
October 03, 2022
Panel Affirms, Says Guaranty Association Not Required To Pay COLA Interest

WASHINGTON, D.C. — A District of Columbia appellate panel affirmed a compensation review board’s decision that the D.C. Insurance Guaranty Association was not statutorily obligated to pay penalties for the late payment of cost-of-living allowances (COLA) or accrued interest on the underpayment of workers’ compensation benefits, finding that the “claims for the statutory late-payment penalties and for accrued interest were not” covered claims.
September 30, 2022
Florida Agency Seeks Approval To Hire Advisers In Insolvent Insurer Liquidation

TALLAHASSEE, Fla. — After a Florida court entered a consent order appointing the Florida Department of Financial Services as receiver in the liquidation of FedNat Insurance Co., the department moved to approve compensation of outside consultants in anticipation of the assistance needed with its statutory duties as receiver.
September 30, 2022
Federal Judge Dismisses Claims Against Insurer In Asbestos Liability Dispute

NEW ORLEANS — A Louisiana federal judge on Sept. 29 issued an order dismissing without prejudice claims against an alleged insurer of a now-deceased former shipyard president in a wrongful death asbestos suit against numerous defendants, including an insolvent insurer.
September 30, 2022
Court Again Extends Objection Deadline On Rehab Plan For Reinsurer

WILMINGTON, Del. — The deadline to object to a proposed modified plan of rehabilitation for Scottish Re (U.S.) Inc. in Rehabilitation (SRUS) is now Oct. 24 after a Delaware vice chancellor for the second time granted an extension following a joint stipulation by the receiver for SRUS and dozens of interested insurers.
September 29, 2022
Panel Affirms Order Enforcing ‘Bar’ Date For Claim Submission In Liquidation Case

NEW YORK — A New York appellate court affirmed a lower court order denying a non-profit association’s motion to reject a referee’s decision enforcing a “bar date” that prevented it from submitting a claim in the liquidation of an insolvent insurer, finding that the lower court decision was correct because “no constitutional, equitable, or public policy considerations” supported changing the bar date for the association’s alleged hardship.
September 28, 2022
Indiana Panel: Claims Against Insolvent Insurer Must Be Filed In Liquidation Case

INDIANAPOLIS — An Indiana appellate court affirmed a trial court order granting an insolvent New Hampshire insurer’s request to dismiss a declaratory judgment insurance coverage suit filed against it, finding that because Indiana law requiring “full faith and credit to an out-of-state Liquidation Order” takes precedence over an Indiana trial rule identifying the essential parties in a claim for declaratory judgment, claims must be filed in the liquidation proceeding.
September 23, 2022
Partial Judgment Granted To Guaranty Association In Construction Bond Dispute

PHILADELPHIA — A Pennsylvania federal judge granted in part Kentucky Insurance Guaranty Association’s partial summary judgment motion in a dispute over the association’s payments on surety bonds for the defendants’ construction projects, finding that the association is entitled to reimbursement pursuant to the parties’ indemnity agreement except for the amount already paid to the association in the liquidation proceeding for the original bond issuer.
September 21, 2022
Liability Insurer Seeks Settlement Agreement In Antitrust Coverage Row

KANSAS CITY, Kan. — A liability insurer on Sept. 16 moved a Kansas federal court to compel a defendant health insurer to produce a settlement agreement it executed with a successor in interest to an insolvent insurer in an antitrust coverage dispute, contending that the settlement is relevant and is not subject to the health care insurer’s alleged privileges.
September 21, 2022
No Coverage Due In Accident Dispute Involving Company Insured By Insolvent Insurer

CLEVELAND — An Ohio federal judge on Sept. 16 granted summary judgment to a commercial insurer in its suit seeking a declaratory judgment that it is not required to cover claims filed against its insured truck transportation company in an underlying state court negligence suit involving a trucking company insured by an insolvent insurer, finding that the truck involved in the accident was not a covered auto under the policy endorsement.
September 20, 2022
Panel Finds Filing Timely In No-Fault Suit Against Insurer Later Deemed Insolvent

DETROIT — A Michigan appellate court on Sept. 15 reversed a trial court’s decision and remanded a suit filed by the mother of an auto accident victim and a guaranty insurer against the insurer of the brother of the uninsured driver of the vehicle involved in the accident, finding that the complaint was timely filed and the driver of the vehicle was considered an insured person under her brother’s policy.
September 19, 2022
Magistrate Considers Sanctions Against Brokers In Insolvent Health Plan Suit

CHICAGO — In a Sept. 16 minute docket entry, an Illinois federal magistrate judge took “under advisement” an independent fiduciary receiver’s motion for sanctions against certain insurance broker defendants in a breach of duty of care suit against the insurance brokers in connection with the sale of a now-insolvent health plan.
September 16, 2022
Agreed Order With Google Entered In Bankruptcy Court Discovery Dispute

NEW YORK — Upon the Sept. 15 entry of an agreed order regarding Google LLC’s production of specified contents of a Gmail account, the joint provisional liquidators (JPLs) of Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) and other debtors withdrew their motion in New York federal bankruptcy court to compel the consent of the account holder.
September 14, 2022
Iowa Federal Judge Grants Remand, Citing No Diversity In SHIP Rehab Case

DES MOINES, Iowa — An Iowa federal judge on Sept. 8 granted the Iowa insurance commissioner’s motion to remand in a suit seeking injunctive relief to stop rehabilitators of the Senior Health Insurance Company of Pennsylvania (SHIP) from taking action on the approved rehabilitation plan without first obtaining approval from the Iowa insurance commissioner, finding that the court lacks jurisdiction because the suit is not between citizens from different states and that the Pennsylvania insurance commissioner’s motion to dismiss is moot.