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Mealey's Insurance Insolvency

  • July 29, 2021

    Regulators To 9th Circuit: Don’t Expedite Suit Testing Conservatorship Of Insurer

    SAN FRANCISO — Expediting an appeal contesting a California federal judge’s dismissal of allegations that state regulators abused their authority by actions including obtaining a conservatorship against a workers’ compensation insurance carrier is not warranted and would be prejudicial, the regulators tell the Ninth Circuit U.S. Court of Appeals in their July 27 opposition to a motion to expedite.

  • July 26, 2021

    Imposing New, Retroactive Risk On Insurers Would Threaten Solvency, Amicus Argues

    ATLANTA — American Property Casualty Insurance Association on July 21 filed an amicus curiae brief in support of Certain Underwriters at Lloyd’s London in a coronavirus coverage suit, arguing to the 11th Circuit U.S. Court of Appeals that commercial property insurance policies “do not—and were never intended to—provide coverage for economic losses untethered to physical loss or physical damage.”

  • July 22, 2021

    Judge Tosses Suit Against Insurance Guaranty Association For Lack Of Jurisdiction

    SAN JUAN, Puerto Rico — A federal judge in Puerto Rico on July 20 granted Puerto Rico Miscellaneous Insurance Guaranty Association’s motion to dismiss a lawsuit seeking liability for damages arising from a slip-and-fall injury that allegedly occurred at the insured’s premises, finding that the court lacks subject matter jurisdiction and the plaintiff is barred from suing the association because this lawsuit was initiated after the liquidation order was issued for the insured’s now-insolvent insurer.

  • July 22, 2021

    Class Counsel Seeks Approval Of Attorney Fees In ACA Risk-Corridor Funds Suit

    WASHINGTON, D.C. — Class counsel on July 20 moved for the U.S. Court of Federal Claims to approve their attorney fee request of 5 percent of a $45,417,643.02 judgment for a subclass that consists of one insolvent insurer in insolvent insurers’ lawsuit seeking a declaratory judgment that the U.S. government owes them millions of dollars under the Patient Protection and Affordable Care Act (ACA) risk-corridor program.

  • July 21, 2021

    Federal Judge Dismisses All Punitive Damages Claims Against City Of Newark

    NEWARK, N.J. — A federal judge in New Jersey on July 13 granted in part and denied in part the city of Newark and its public safety director’s motion to dismiss and police officers’ motion for summary judgment in a personal injury lawsuit in which New Jersey Property-Liability Insurance Guaranty Association (NPLIGA) filed a cross-claim seeking contribution from the other defendants for damages caused by a police car chase that led to a collision.

  • July 21, 2021

    Brokers Move To Bifurcate Discovery In Federal Suit Over Insolvent Health Plan

    CHICAGO — Insurance brokers on July 15 moved for a federal court in Illinois to bifurcate discovery in a lawsuit alleging that they breached their duty of care because they knew or should have known that a multiple employer welfare arrangement (MEWA) was not in compliance with its structural requirements and was not financially sound.

  • July 21, 2021

    Magistrate Denies Investors’ Request Seeking Pre-Approval Of Trustee’s Payments

    FORT LAUDERDALE, Fla. — A federal magistrate judge in Florida on July 18 denied a motion by investors in the Mutual Benefits Keep Policy Trust seeking pre-approval of any future payments that a trustee makes to himself or his firm until the trustee’s “enhanced oversight” of the trust’s servicer “can be investigated and fully understood” in a Securities Exchange Commission lawsuit alleging fraudulent selling of investment interests in life insurance policies.

  • July 21, 2021

    Judge Adopts Report Finding ERISA Assignment Gives Bankruptcy Trustee Standing

    DALLAS — Insureds’ assignment to medical providers included both rights to benefits under the Employee Retirement Income Security Act and legal action and transferred to the trustee upon the providers’ bankruptcy, a federal judge in Texas said July 19 in adopting a magistrate judge’s report recommending denial of a motion to dismiss.

  • July 21, 2021

    3rd Circuit Grants Motion For Partial Remand Brought By Insurer’s Chapter 7 Trustee

    PHILADELPHIA — The Third Circuit U.S Court of Appeals on July 16 granted a motion for partial remand brought by the Chapter 7 trustee for an insurer and its subsidiaries in his appeal of a lower federal court’s reversal of a bankruptcy court’s order granting his objection to the Internal Revenue Service’s claim seeking administrative priority for tax obligations arising in the year of a bankruptcy filing, remanding to the federal court with instruction to remand to the bankruptcy court for approval of a settlement.

  • July 20, 2021

    9th Circuit Asked To Expedite 2nd Suit Testing Conservatorship Of Insurer

    SAN FRANCISCO — An appeal contesting a federal judge in California’s dismissal of allegations that state regulators abused their authority by actions including obtaining a conservatorship against a workers’ compensation insurance carrier must be hastened or the appeal will not be completed before the conservation is lifted, the appellant told the Ninth Circuit U.S. Court of Appeals in a July 19 motion to expedite.

  • July 19, 2021

    Judge: Allowing Claims Against Insureds To Proceed May Result In Undue Prejudice

    NEW ORLEANS — Granting an insolvent insurer’s motion to stay an asbestos liability lawsuit in its entirety, a federal judge in Louisiana held July 6 that allowing the plaintiffs to proceed against the insureds while the claims against the insolvent insurer are stayed “would frustrate the parties' ability to resolve the case as a whole and may result in undue prejudice to both plaintiff and defendant.”

  • July 19, 2021

    Claims All Arise From Alleged Asbestos Exposure, Judge Says In Granting Stay

    NEW ORLEANS — A federal judge in Louisiana on July 15 stayed and administratively closed a shipyard worker’s lawsuit alleging that he was exposed to injurious levels of asbestos and asbestos-containing products, granting a defendant insurer’s motion to stay all proceedings following its insolvency and liquidation by the Pennsylvania Commonwealth Court.

  • July 14, 2021

    Insurance Commissioner Cannot Allocate Assets From Insurers’ Estates To Pay Claims

    HARRISBURG, Pa. — A Pennsylvania court on July 9 denied the state’s insurance commissioner’s application seeking a declaration that she is authorized under Article V of the Insurance Department Act of 1921 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 policies were terminated by virtue of the insurers’ liquidation, finding “simply no statutory authority for this well-intentioned proposal.”

  • July 13, 2021

    No Basis To Extend Liability For Defense Costs Outside Of Policy Period, Panel Says

    NEW ORLEANS — A Louisiana appeals panel on June 23 held that a lower court correctly applied the time-on-the-risk formula and that there is no basis for extending liability for defense costs outside of the insurers’ policy periods, further finding that the “Other Insurance” clauses do not apply to defense costs for an asbestos liability lawsuit in which an employer asserted that coverage is unavailable because it purchased insurance from a company that has since become insolvent.

  • July 13, 2021

    S.D. Supreme Court Accepts Certified Question Over Insurance Liquidation Statute

    SIOUX FALLS, S.D. — The same day the South Dakota Supreme Court accepted certification of a question involving the state’s insurance liquidation statute in a lawsuit in which the liquidator of ReliaMax Surety Co. (RSC) seeks a declaration that coverage exists under a claims-made excess insurance policy above a directors and officers (D&O) policy for a $21 million wrongful acts claim, a federal judge in South Dakota on June 28 denied without prejudice the liquidator’s motion for judgment on the pleadings and alternative motion for summary judgment and the insurer’s motion for summary judgment to refile after the South Dakota high court rules on the certified question.

  • July 09, 2021

    Judge Grants Insolvent Insurer’s Motion To Enforce Stay Of Asbestos Liability Suit

    NEW ORLEANS — A federal judge in Louisiana on May 26 granted an insolvent insurer’s motion to enforce a Pennsylvania court’s permanent stay of claims against it, staying and administratively closing an asbestos liability lawsuit brought against the insurer and its insureds.

  • July 08, 2021

    Judge Stays Asbestos Liability Suit After Defendant’s Insurer Declared Insolvent

    NEW ORLEANS — Guided by the factors in Landis v. N. Am. Co., 299 U.S. 248, 57 S. Ct. 163, 81 L. Ed. 153 (1936), a federal judge in Louisiana on July 2 held that a brief six-month administrative stay of an entire asbestos liability lawsuit from the date a Pennsylvania court declared one of the defendant’s insurers insolvent “is necessary to ensure that litigation proceeds in an efficient and orderly fashion.”

  • July 02, 2021

    Court Enters Judgment For 1 Insolvent Insurer In ACA Risk-Corridor Funds Suit

    WASHINGTON, D.C.— The U.S. Court of Federal Claims on June 28 entered a $45,417,643.02 judgment for a subclass that consists of one insolvent insurer in insolvent insurers’ lawsuit seeking a declaratory judgment that the U.S. government owes them millions of dollars under the Patient Protection and Affordable Care Act (ACA) risk-corridor program.

  • June 28, 2021

    Attorney: Judgment Was Not ‘Collectable’ Under Insolvent Insurer’s CGL Policy

    LOS ANGELES — A law firm and its attorney who were sued for professional negligence tell a California appeals court in a May 26 brief that an underlying $3.5 million default judgment against a contractor was not “collectable” under a commercial general liability insurance policy even if the insurer had not gone into receivership, seeking affirmance of a lower court’s ruling in their favor arising from clients’ claims that they would have been able to collect a $2 million judgment against the insurer but for the law firm and attorney’s lack of due diligence in obtaining the default judgment against the contractor.

  • June 24, 2021

    Parties Stipulate To Judgment For 1 Insolvent Insurer In ACA Risk-Corridor Funds Suit

    WASHINGTON, D.C. — The U.S. government and a class of insolvent insurers on June 17 filed a stipulation to enter a $45,417,643.02 judgment for a subclass that consists of one insolvent insurer in the insurers’ lawsuit seeking declaratory judgment that the government owes them millions of dollars under the Patient Protection and Affordable Care Act (ACA) risk-corridor program.