Mealey's Insurance Insolvency
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June 03, 2020
Covil Asks For Dismissal In Favor Of First-Filed Suit Involving Insolvent Insurer
GREENVILLE, S.C. — The receiver of Covil Corp. argues to a South Carolina federal court in a May 28 memorandum that an insurer’s coverage dispute over asbestos claims should be dismissed or stayed in favor of Covil’s first-filed state court action against the insurer and an insolvent excess insurer (Pennsylvania National Mutual Insurance Co. v. Covil Corp., et al., No. 20-1729, D. S.C.).
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June 02, 2020
Insured Alleges Breach Of Contract Over Payments For Environmental Liabilities
NEWARK, N.J. — An industrial equipment supplier filed a breach of contract complaint on June 1 in a New Jersey federal court, alleging that its insurer, which was formerly in rehabilitation, refuses to pay for an environmental investigation and remediation at its property (Industrial Corner Corp. v. Public Service Mutual Insurance Company, No. 20-6677, D. N.J.).
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June 01, 2020
Bankrupt Insurance Firm Seeks Approval Of $3.2M Settlement With Directors
WILMINGTON, Del. — The litigation trustee for Patriot National Inc., a bankrupt insurance firm, asks a Delaware bankruptcy court in a May 28 motion to approve a $2.95 million settlement with the firm’s former directors and officers in a separate Delaware state court suit over their alleged waste of $250 million (In re: Patriot National, Inc., Chapter 11, No. 18-10189, D. Del. Bkcy.).
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June 01, 2020
Federal Judge Dismisses Insolvent Insurer, Insured’s Fraud Case, Counterclaim
SAN JUAN, Puerto Rico — A Puerto Rico federal judge on May 28 granted an insolvent insurer’s voluntary dismissal of its $3.5 million case alleging fraud by an insured and dismissed the insured’s counterclaim for improper refusal to pay (Integrand Assurance Co. v. Puma Energy Caribe, LLC, No. 19-1195, D. Puerto Rico, 2020 U.S. Dist. LEXIS 94621).
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May 29, 2020
Insurer’s Rehabilitator: Personal Jurisdiction Exists For Fraud Suit
BATON ROUGE, La. — An insolvent insurer’s rehabilitator in May 26 motions opposes dismissal of his Louisiana federal court lawsuit because personal jurisdiction exists over a bank’s senior vice president and two banks for allegations that they aided and abetted the fraud and breach of fiduciary duty concerning loans that misled state insurance regulators on the insurer’s true financial condition (James J. Donelon v. Jeffrey C. Pollick, et al., No. 20-177, M.D. La.).
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May 28, 2020
Banks Challenge $7M Attorney Fees Award For Insolvent Insurers’ Receiver
ST. LOUIS — Two banks argue in their May 27 opening brief to the Eighth Circuit U.S. Court of Appeals that a lower court ignored Missouri law to award attorney fees of $7,005,337 to the receiver for insolvent funeral insurers and state insurance guaranty associations in their dispute regarding allegations over the mishandling of the insurers’ funds (Jo Ann Howard & Associates P.C., et al. v. National City Bank and PNC Bank, N.A., No. 20-1438, 8th Cir.).
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May 26, 2020
Chancellor Dismisses Life Insurers’ Claim In Reinsurer’s Rehabilitation Proceeding
WILMINGTON, Del. — Life insurers failed to state a claim in a reinsurer’s rehabilitation proceeding over offsets or recoupment of reinsurance premiums and claim payments under a settlement agreement, a Delaware chancellor ruled May 19, finding that the insurers’ group offsetting methodology was not authorized because it lacked mutuality (In matter of Scottish Re [U.S.], Inc. in rehabilitation, No. 2019-0175-AGB, Del. Chanc., 2020 Del. Ch. LEXIS 193).
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May 22, 2020
Defendants Seek To Bar Expert Reports From Trial On Hedge Funds Collapse
NEW YORK — Two defendants in May 19 motions request exclusion of expert reports from trial in a New York federal court lawsuit brought by the liquidators of two hedge funds regarding aiding and abetting the collapse of the funds (In re Platinum-Beechwood Litigation, No. 18-6658, Martin Trott, et al. v. Platinum Management [NY] LLC, et al., No. 18-10936, S.D. N.Y.).
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May 22, 2020
Homebuilders Breached Agreement With Insolvent Surety, 9th Circuit Finds
SAN FRANCISCO — Homebuilders breached a continuing agreement of indemnification (CAI) when they refused to reimburse an insolvent surety for claims of $1,925,880.84 filed against surety bonds by two California cities, the Ninth Circuit U.S. Court of Appeals held May 20, affirming summary judgment to the insolvent surety (Western Insurance Co. in liquidation v. Frontier Homes LLC, et al., No. 19-55101, 9th Cir., 2020 U.S. App. LEXIS 16099).
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May 21, 2020
Insurers Respond To Home Insurance’s Recent $14M Settlements
CONCORD, N.H. — Two insurers in May 1 briefs assert their rights to contribution and subrogation claims in the liquidation proceeding for The Home Insurance Co. following the liquidator’s recent settlements of more than $14 million between mutual insureds (In the matter of the liquidation of The Home Insurance Co., No. 217-2003-EQ-00106, N.H. Super., Merrimack Co.).
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May 21, 2020
Nonparties Challenge Stay Of Case Based On Insurer’s Liquidation
SAN FRANCISCO — Plaintiffs in a New York action over trust preferred securities (TruPS) in an April 9 appellant brief filed in a California appeals court challenge a trial court’s “erroneous deference” to stay their dispute in light of an insurer’s liquidation proceeding, saying the trial court “has undermined valid claims potentially worth hundreds of millions of dollars” (Dave Jones v. CastlePoint National Insurance Co., No. A158646, Calif. App., 1st Dist., Div. 5).
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May 20, 2020
Defendants: No Remand For Insolvent Insurer’s Breach Of Fiduciary Duty Suit
BATON ROUGE, La. — Defendants argue in a May 14 brief that a Louisiana federal court should deny an insolvent insurer rehabilitator’s motion to remand because they properly removed the case based on diversity jurisdiction the rehabilitator’s breach of fiduciary duty suit alleging that they intentionally misled state insurance regulators on the insurer’s true financial condition (James J. Donelon v. Jeffrey C. Pollick, et al., No. 20-177, M.D. La.).
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May 20, 2020
Insurer Seeks New Trial On Bank’s Alleged Breach Of Duties For Reinsurance Trust
COLUMBIA, S.C. — Accident Insurance Co. Inc. (AIC) in a May 18 motion seeks a new trial to amend or alter a South Carolina federal judge’s judgment from April that found that a bank is not liable to the insurer for claims and damages arising out of an alleged breach by the bank of its duties as trustee of a reinsurance trust for an insolvent insurance company (Accident Insurance Company Inc. v. U.S. Bank National Association, et al., No. 16-2621, D. S.C.).
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May 19, 2020
JUA, Pennsylvania General Assembly, Governor Debate Legislation’s Constitutionality
HARRISBURG, Pa. — The Pennsylvania Professional Liability Joint Underwriting Association (JUA), the state’s governor and state’s General Assembly offered their responses on May 15 to a Pennsylvania federal judge concerning summary judgment motions in their dispute over whether recent legislation violated the JUA’s constitutional rights (Pennsylvania Professional Liability Joint Underwriting Association v. Tom Wolf, et al., No. 19-1121, M.D. Pa.).
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May 19, 2020
Judge Approves Report In Reliance Insurance Company’s Liquidation
HARRISBURG, Pa. — In the liquidation proceedings of Reliance Insurance Co., a Pennsylvania judge on May 6 approved the latest report and recommendations by the liquidator on resolved claims, which have already totaled approximately $1.46 billion since proofs of claims (POCs) have been filed (In re: Reliance Insurance Co. in liquidation, No. 1 REL 2001, Pa. Cmwlth.).
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May 19, 2020
California Extends Time Period, Clarifies Bulletin Over Insurance Premium Reductions
SACRAMENTO, Calif. — The California insurance commissioner on May 15 issued a bulletin that extended the relevant time period for and clarified a previous bulletin that required the state’s property and casualty and workers’ compensation insurers to provide broader premium reductions in the wake of the novel coronavirus.
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May 13, 2020
COMMENTARY: Viral Immunity: Policyholders Face Barriers To Coverage For Covid-19 Business Interruption Claims
By Bruce M. Lichtcsien
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May 18, 2020
Asbestos Debtor Seeks To Sell Claims Against Insolvent Insurer
NEW YORK — Chapter 11 debtor Rapid-American Corp. on May 1 asked a New York federal bankruptcy court to allow it to sell its rights to priority claims in an insolvent insurer’s liquidation case for more than $1.2 million, or about 23 percent of what the claims were originally worth under a 2012 settlement (In re: Rapid-American Corporation, No. 13-10687, S.D. N.Y. Bkcy.).
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May 18, 2020
Insurer’s Receiver Seeks Dismissal Of Defendants’ 2nd Appeal In RICO Suit
RICHMOND, Va. — The South Carolina Health Cooperative Inc.’s (SCHC) special deputy receiver in a May 12 motion asks the Fourth Circuit U.S. Court of Appeals to dismiss appeals of a South Carolina federal judge’s order granting in part but largely denying summary judgment on claims that two individuals conspired to defraud SCHC with fraudulent letters of credit (LOCs) (Michael J. FitzGibbons, et al. v. De’Shaun Williams, et al., Nos. 20-1383 & 20-1384, 4th Cir.).
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May 14, 2020
New Jersey Regulator Requires Insurers To Refund Insureds In Wake Of Coronavirus
TRENTON, N.J. — The New Jersey Department of Banking and Insurance issued a bulletin on May 12 that requires certain lines of insurers to make an initial premium refund or other adjustment to all adversely impacted New Jersey insureds in an effort to “protect consumers and to provide consistent direction to the insurance industry regarding misclassifications of risk resulting from the COVID-19 pandemic.”