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Mealey's Insurance Insolvency

  • 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.

  • April 08, 2024

    N.C. High Court Grants Filing Extension To Insolvent Insurers’ Buyer In Fraud Row

    RALEIGH, N.C. — The North Carolina Supreme Court on April 5 granted an extension to the purchaser of now-insolvent insurers and his affiliated companies to file a reply brief in their appeal of an appellate court’s decision affirming a judgment for fraud against them.

  • April 04, 2024

    Judge Stays Stock Redemption Row Between Equity Firm And Agent Liquidating Insurer

    TAMPA, Fla. — One day after granting in part summary judgment to a private equity firm and limited partnership in a fraudulent transfer of property dispute among the firm and partnership and the liquidator for an insolvent health insurer, a Florida federal judge issued a docket-only order staying and administratively closing the case pending scheduling for trial.

  • March 28, 2024

    Receiver Of Reinsurer In Liquidation Proposes Proof Of Claim Procedures

    WILMINGTON, Del. — The receiver for life and health reinsurer Scottish Re (U.S.) Inc. (SRUS) filed motions to set bar dates for two types of claims under proof of claim (POC) procedure proposals filed in the Delaware Chancery Court.

  • March 27, 2024

    N.C. High Court Tosses Clarification Bid In Fraud Row With Insolvent Insurers

    RALEIGH, N.C. — The North Carolina Supreme Court dismissed insurers’ motion for clarification of the high court’s order granting a petition for supersedeas regarding an appellate court’s decision affirming a judgment for fraud against the purchaser of now-insolvent insurers and his affiliated companies.

  • March 26, 2024

    4th Circuit Says No Rehearing In Asbestos Coverage Row With Guaranty Association

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals denied an insurer’s request for rehearing and rehearing en banc of the court’s ruling dismissing the insurer’s appeal of a district court’s order remanding to state court a receiver’s asbestos coverage suit against insurers and the South Carolina Property and Casualty Insurance Guaranty Association.

  • March 21, 2024

    Insureds Seek To Vacate Dismissal Of Water Damage Suit Against Insolvent Insurer

    WEST PALM BEACH, Fla. — Homeowners moved to vacate a Florida state court’s dismissal of their breach of contract suit against their insolvent insurer and the Florida Insurance Guaranty Association (FIGA) over failure to cover purported water damage from a leaking dishwasher, asserting that their failure to appear was due to a clerical error.

  • March 19, 2024

    Judge Grants Dismissal To Guaranty Association In Hurricane Ida Coverage Dispute

    NEW ORLEANS — A Louisiana federal judge dismissed homeowners’ claims against the Louisiana Insurance Guaranty Association (LIGA) in a breach of contract and bad faith suit against it over liability for purported damages caused by Hurricane Ida, finding that because the homeowners voluntarily dismissed the related claims against LIGA, which was substituted for a now-insolvent insurer, LIGA’s motion for partial dismissal is moot.

  • March 19, 2024

    Amended Complaint Proposed In Delaware Suit Over Alleged Asset Dissipation

    WILMINGTON, Del. — Plaintiffs in a suit over the “Agera transactions” — a complex asset-swap arrangement that they allege resulted in the “dissipation of at least $250 million” — have moved in Delaware Chancery Court for leave to amend the complaint “to clarify the record and make minimal amendments.”

  • March 18, 2024

    Supplier Seeks Judgment In Asbestos Liability Case Involving Insolvent Insurer

    NEW ORLEANS — A purported supplier of asbestos-containing products moved for partial summary judgment and filed a brief in support in an asbestos liability suit against it, the Louisiana Insurance Guaranty Association (LIGA) and multiple other parties over a man’s exposure to asbestos resulting from his work at a shipyard, asserting that partial summary judgment should be granted because the purported supplier was not a “professional vendor.”

  • March 15, 2024

    Judge Adopts Report, Remands Hurricane Coverage Suit Against Guaranty Association

    MOBILE, Ala. — An Alabama federal judge adopted a magistrate judge’s report and recommendation that a bad faith and breach of contract hurricane coverage suit against the Alabama Guaranty Association (AIGA) be remanded to state court, agreeing with the magistrate judge’s finding that the suit is “due to be remanded” because the court “lacks subject matter jurisdiction.”

  • March 14, 2024

    Receiver Gets Firm Deadline For Procedures Proposal In Reinsurer’s Liquidation

    WILMINGTON, Del. —  Modifying a proposed scheduling order, a Delaware Chancery Court vice chancellor has given the receiver for life and health reinsurer Scottish Re (U.S.) Inc. (SRUS) until March 25 to seek approval of proof-of-claim processes and related liquidation procedures.

  • March 13, 2024

    Judge Affirms Stay, Warns Of Sanctions In Student Debt Row With Insolvent Insurer

    NEW YORK — A federal judge affirmed a magistrate judge’s order staying a suit filed against an insolvent insurer and multiple parties allegedly involved in a fraudulent debt collection practice resulting in a lien against the purported debtor’s property, finding that the stay order was not “clearly erroneous or contrary to law.”

  • March 12, 2024

    Discovery Orders Granted, Appeal Filed In Vesttoo Chapter 11 Bankruptcy Cases

    WILMINGTON, Del. — A notice of appeal has been filed concerning the confirmation of a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates, and a Delaware federal bankruptcy judge on March 11 granted four unopposed motions for leave to conduct discovery against banking entities.

  • March 11, 2024

    Justice Stays, Severs Claims Against Insolvent Insurer In Asbestos Coverage Row

    CENTRAL ISLIP, N.Y. — A New York state court justice granted a stay and severed proceedings as to the insured of an insolvent insurer in an estate’s asbestos liability case filed against numerous parties involved in the manufacture and distribution of asbestos-containing products, finding that the claims against the other defendants may go forward without causing undue burden to the estate of the decedent.

  • March 11, 2024

    Judge Amends Consent Decree Order In Case Over Alleged Counterfeit Policies

    LOUISVILLE, Ky. — In a March 8 amended ruling entering a consent decree in a sprawling suit over allegations of fraud, trademark counterfeiting and trademark infringement involving captive reinsurance programs, a Kentucky federal judge said he “inadvertently omitted the names of two parties.”

  • March 11, 2024

    Class Certification Bid Draws Opposition In DUFTA Case Involving Insurer

    WILMINGTON, Del. — Arguing in part that proposed class representatives “appear to be as unqualified as” one rejected in Gordon v. Sonar Capital Mgmt. LLC, defendants in a suit over an alleged scheme to strip capital from an insurance subsidiary on which many policyholders depend for long-term care (LTC) disability benefits urged the Delaware Chancery Court to deny certification of the proposed class.

  • March 07, 2024

    Panel Affirms Liquidation Order, Says Insurers’ Holding Company Lacked Standing

    RALEIGH, N.C. — The North Carolina Court of Appeals affirmed lower court orders placing insolvent insurers into liquidation and denying an intervenor holding company’s motion for a continuance, finding that the lower court did not err when issuing the orders but that because the intervenor lacked standing to intervene, the orders must be modified to show that the intervenor is not a proper party.