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

Mealey's Insurance Insolvency

May 21, 2024
Request To Amend Granted, Coverage Dispute With Guaranty Association Dismissed

NEW ORLEANS — A Louisiana federal judge granted a homeowner’s motion to file an amended complaint in an insurance coverage dispute over the insurer’s alleged failure to adequately compensate its insured homeowner for damage related to Hurricane Ida, finding that allowing the homeowner to amend his complaint to add as a defendant the Louisiana Insurance Guaranty Association (LIGA) results in the court lacking subject matter jurisdiction and therefore the case must be dismissed.
May 21, 2024
La. Panel Affirms Ruling In Asbestos Liability Case Involving Insolvent Insurers

NEW ORLEANS — A Louisiana appellate court affirmed a lower court ruling that denied summary judgment to the Louisiana Insurance Guaranty Association (LIGA), as statutory obligor for an employer’s insolvent workers’ compensation and liability insurers, in a suit alleging that a former employee’s workplace exposure to asbestos resulted in his diagnosis of mesothelioma, finding that LIGA failed to show “the existence and applicability” of policy exclusions.
May 17, 2024
Kansas Commissioner Certifies Service Of Interrogatories In Insurer Liquidation

TOPEKA, Kan. — The Kansas insurance commissioner, as liquidator of an insolvent medical malpractice insurer, certified that she served her first set of interrogatories in the insurer’s liquidation proceedings.
May 16, 2024
Judge Cleans Up Docket, Closes Hurricane Coverage Suit Against Insolvent Insurer

LAKE CHARLES, La. — A Louisiana federal judge on May 15 issued an order administratively closing a homeowner’s breach of contract and bad faith suit over Hurricane Laura damage after the case had been stayed for almost a year due to the insurer’s insolvency, finding that “[n]early four years have passed since Hurricane Laura and the court wishes to clean up its docket.”
May 16, 2024
Guaranty Association Says It Reached Settlement With Homeowner Over Unpaid Claim

FORT MYERS, Fla. — The Florida Insurance Guaranty Association (FIGA) notified a Florida state court that it reached a settlement in a suit filed against it by a homeowner seeking indemnification for an unpaid claim for home damage after her insurer was ordered into liquidation.
May 15, 2024
Magistrate Approves Discovery Plan In Guaranty Association’s MSP Suit Against CMS

RALEIGH, N.C. — A North Carolina federal magistrate judge approved a discovery plan in the North Carolina Insurance Guaranty Association’s (NCIGA) suit against the U.S. Department of Health and Human Services (DHHS), its secretary and the Centers for Medicare and Medicaid Services (CMS), 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.
May 15, 2024
Insurance Commissioner Seeks Approval Of Expenses Regarding Liquidated Insurer

OKLAHOMA CITY — The Oklahoma insurance commissioner, as receiver for a property and casualty insurer in liquidation, filed in Oklahoma state court an application to approve costs and fees related to the administration for the receivership of Go Insurance, which the court previously ordered into liquidation.
May 13, 2024
Judgment Granted For Guaranty Association In Bad Faith Suit Over Hurricane Damage

LAFAYETTE, La. — A Louisiana federal judge granted the Louisiana Insurance Guaranty’s (LIGA) motion for summary judgment in a bad faith and breach of contract suit filed against a now-insolvent homeowners insurer over purported hurricane damage, finding that LIGA, which was substituted as a defendant for the insurer after it became insolvent, established that it was prejudiced by a lack of notice regarding the alleged damage.
May 06, 2024
Judge Denies Dismissal To Insolvent Insurer’s Owners, Cites ‘Perfunctory Argument’

GREENSBORO, N.C. — A North Carolina federal judge denied a motion filed by the owners of an insolvent insurer seeking to dismiss a petition to confirm an arbitration award for a Dutch insurer in liquidation, finding that the owners’ new argument on appeal that the award is prohibited as a monetary penalty fails because “it is not the court’s job to undertake the analysis and legal research needed to support a perfunctory argument.”
May 02, 2024
Liquidators Stipulate To Dropping Insurers From Adversary Proceeding

NEW YORK — The joint provisional liquidators (JPLs) of Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) and other debtors filed a May 1 stipulation in New York federal bankruptcy court to dismiss four defendants called the NC Insurance Cos. from an adversary proceeding that involves hundreds of other parties; the JPLs also stipulated to the withdrawal of a related appeal.
May 02, 2024
Alleging They Were Defrauded, Investors File Related Suits Over $65M Deal

In related complaints filed in Florida and New York state courts over a December 2021 deal, entities that say they invested about $65 million in a managing general agent just months before affiliated insurance companies were liquidated allege that they were defrauded.
May 01, 2024
Summons Provided For Owner Of Insolvent Insurers In Dispute Over LLC Conversion

WILMINGTON, Del. — A Puerto Rico-based life insurer provided a Delaware state court with a copy of a summons to be served on a Delaware-based entity and its owner, Greg Lindberg, who also owned insolvent insurers, in a suit alleging that Lindberg unlawfully converted the entity from a corporation into a limited liability company as “part of a systematic plan to siphon off assets held by a reinsurance trust” created to protect the Puerto Rico insurer and its policyholders.
April 25, 2024
Insolvent Insurers’ Owner Asks Delaware Court To Vacate $524M Foreign Judgment

NEW CASTLE, Del. — A judgment debtor and former owner of insolvent insurers ordered by a North Carolina federal court to pay a $524,009,051.26 judgment to a Puerto Rico-based insurer asked a Delaware state court to vacate the foreign judgment, asserting that the insurer has provided “evidence that no payment is required by” the debtor under a reinsurance trust backed by the debtor’s $25 million guarantee.
April 24, 2024
Panel Reverses Judgment On ‘Claim Not Pled’ In Insurance Policy Cancellation Row

MIAMI — A Florida appellate court reversed and remanded a lower court’s grant of summary judgment for alleged misrepresentation in a policy application in a suit filed by an insured’s assignee against a now-insolvent insurer, seeking a declaration that the insurer had improperly canceled its insured’s policy, finding that the lower court erred in granting the assignee’s motion for summary judgment on a “claim it never pled.”
April 23, 2024
Hurricane Coverage Row With Insolvent Insurer Dismissed For Lack Of Jurisdiction

NEW ORLEANS — A Louisiana federal judge granted a joint motion for dismissal after the parties settled claims in homeowners’ breach of contract suit against their now-insolvent insurer for failure to adequately cover damages resulting from Hurricane Ida, finding that subject matter jurisdiction is absent because the homeowners and the Louisiana Insurance Guaranty Association (LIGA), who was substituted as a defendant for the insurer, are all citizens of Louisiana.
April 22, 2024
U.S. High Court Denies Cert In Civil Rights Suit Involving Guaranty Association

WASHINGTON, D.C — The U.S. Supreme Court on April 22 denied a petition for writ of certiorari filed by a man seeking review of the Fifth Circuit’s opinion affirming a district court’s grant of summary judgment to an off-duty sheriff’s deputy and the Louisiana Insurance Guaranty Association (LIGA) in the man’s suit alleging that the off-duty officer used excessive force and violated the man’s civil rights when restraining him.
April 19, 2024
Panel Affirms Judgment For Insolvent Insurer In Garbage Disposal Damages Dispute

WEST PALM BEACH, Fla. — In a one-page order with no explanation, a Florida appellate court on April 18 affirmed a lower court order granting summary judgment to a now-insolvent insurer in a breach of contract suit over the insurer’s alleged refusal to cover a purported loss related to its insured’s leaking garbage disposal.
April 18, 2024
D&O Insurers File Defenses To Insurer In Rehabilitation’s Breach Of Contract Suit

INDIANAPOLIS — Primary and excess directors and officers (D&O) insurers that issued policies to an insurer now in rehabilitation filed defenses in an Indiana federal court to the insurer in rehabilitation’s suit against them that seeks a declaration that specified D&O policies apply to cover claims in underlying litigation.
April 18, 2024
Chapter 11 Liquidation Plan Becomes Effective In Vesttoo Bankruptcy Cases

WILMINGTON, Del. — In a notice outlining several bar dates, the Official Committee of Unsecured Creditors told a Delaware federal bankruptcy court that a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates went into effect after conditions precedent were “satisfied or waived.”
April 17, 2024
Judge Rules On Judgment Motions In Asbestos Suit Involving Guaranty Association

NEW ORLEANS — A Louisiana federal judge denied summary judgment to two suppliers of asbestos products in an asbestos liability suit against them, the Louisiana Insurance Guaranty Association (LIGA) and multiple other parties over a man’s exposure to asbestos resulting from his work at a shipyard, finding that fact questions remain as to “whether the decedent was exposed to asbestos products manufactured” by these two suppliers.
April 17, 2024
Clerk Issues Discovery Order In N.C. Guaranty Association’s MSP Suit Against CMS

RALEIGH, N.C. — A North Carolina federal court clerk on April 16 issued an amended discovery order in the North Carolina Insurance Guaranty Association’s (NCIGA) suit against the U.S. Department of Health and Human Services (DHHS), its secretary and the Centers for Medicare and Medicaid Services (CMS), 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.
April 16, 2024
Rehab Plan Approved Over Workers’ Comp Insurer’s Objections In California Court

REDWOOD CITY, Calif. — Rejecting numerous objections from California Insurance Co. (CIC), a California state judge approved a rehabilitation plan that she said the state insurance commissioner described as being “designed to . . . complete CIC's exit from the state on terms that protect the Company, policyholders, and the public.”
April 12, 2024
Insured Seeks To Compel Guaranty Association To Appear In Windstorm Damage Suit

SARASOTA, Fla. — An insured homeowner moved a Florida state court to compel the Florida Insurance Guaranty Association (FIGA) to appear in the homeowner’s wind damage coverage suit, asserting that FIGA was automatically substituted for the insured’s now-insolvent homeowners insurer in the suit upon the insurer’s insolvency.
April 11, 2024
Rehabilitator’s Counterclaims Are Partly Dismissed In Row With Independent Auditor

MINNEAPOLIS — A Minnesota federal judge granted partial dismissal of a rehabilitator’s counterclaims against an outside auditor in a dispute involving a run-off insurer, ruling that some claims are time-barred and that the rehabilitator didn’t state a claim for breach of fiduciary duty.
April 09, 2024
Summons Reissued To Investment Firms Whose Owners Defrauded Now-Insolvent Insurers

RALEIGH, N.C. — A North Carolina federal court reissued a summons to Malta-based investment firms Standard Advisory Services Ltd. and Standard Financial Ltd., which, along with their former directors, are defendants in a $1 billion Racketeer Influenced and Corrupt Organizations Act (RICO) suit accusing them of participating in a scheme to defraud now-insolvent insurers and their policyholders by using policyholder money to purchase non-insurance companies and to divert policyholder money.