SAN FRANCISCO — An insolvent surety “offers little authority” to show that a continuing agreement of indemnification (CAI) did not imply a duty to inform homebuilders of claims made against surety bonds, the homebuilders argue in a June 28 reply brief in the Ninth Circuit U.S. Court of Appeals, asking that entry of summary judgment to the surety be reversed (Western Insurance Co. in liquidation v. Frontier Homes LLC, et al., No. 19-55101, 9th Cir.).
TAMPA, Fla. — A federal judge in Florida on Sept. 16 said that a medical doctor who is an officer and director of a number of now-insolvent insurers settled his coverage dispute with his excess insurer concerning an underlying clawback claim filed by the insolvent insurers’ receiver (Akshay M. Desai v. Navigators Insurance Co., No. 18-1843, M.D. Fla.).
LOS ANGELES — The California Insurance Guarantee Association (CIGA) is liable for a workers’ compensation claim as a covered claim, the Second District California Court of Appeal, Division I, held Sept. 18, annulling a Workers’ Compensation Appeals Board’s decision and remanding with directions to find that a special employer had a valid endorsement in its workers’ compensation insurance policy excluding coverage for special employees (Travelers Property Casualty Company of America v. Workers’ Compensation Appeals Board, et al., No. B292915, Calif. App., 2nd Dist., Div. 1, 2019 Cal. App. Unpub. LEXIS 6216).
NEW YORK — Wisconsin statutory privilege for the state’s insurance commissioner applies in a breach of contract case between an insurer formerly in rehabilitation and a mortgage financing services company, a New York appeals panel held Sept. 17, affirming the denial of a motion seeking to produce documents (Ambac Assurance Corp., et al. v. Nomura Credit & Capital Inc., et al., No. 9746 651359/13, N.Y. Sup., App. Div., 1st Dept., 2019 N.Y. App. Div. LEXIS 6582).
WASHINGTON, D.C. — In Sept. 6 amicus briefing and Aug. 30 briefs by the petitioners, the U.S. Supreme Court heard details regarding the harm caused by the government’s failure to follow through on billions of dollars of promised Patient Protection and Affordable Care Act (ACA) risk corridor payments and that later appropriations riders cannot be read as repealing those obligations (Land of Lincoln Mutual Health Insurance Co. v. United States, No. 18-1038, Moda Health Plan Inc., et al. v. United States, No. 18-1028, Maine Community Health Options v. United States, No. 18-1023, U.S. Sup.).
NEW YORK — A New York federal judge on Sept. 12 ruled on a runoff insurer’s advancement of litigation expenses under investment management agreements (IMAs) for third-party actions arising out of the initial fraud lawsuit filed by the runoff insurer over the mismanagement and misuse of $320 million (In re: Platinum-Beechwood Litigation, No. 18-6658, B Asset Manager L.P., et al. v. Senior Health Insurance Company of Pennsylvania, No. 19-4487, S.D. N.Y.).
SAN JUAN, Puerto Rico — An insolvent insurer’s stock owner, its president and vice president lack standing to seek redress of claimed damages in their lawsuit alleging a civil conspiracy to deprive them of their constitutional rights, the Puerto Rico insurance commissioner and others argue in a Sept. 3 motion to dismiss filed in a Puerto Rico federal court (Victor J. Salgado and Associates Inc., et al. v. Javier Rivera-Rios, et al., No. 19-1663, D. Puerto Rico).
BALTIMORE — A federal judge in Maryland on Sept. 11 dismissed a lawsuit by a former president of an insolvent insurer seeking “injunctive relief to restrict public officers to their lawful and ethical obligations” in a criminal case against the president (Jeffrey Cohen v. Harry Mason Gruber, et al., No. 18-cv-2476 and No. 14-cr-0310, D. Md., 2019 U.S. Dist. LEXIS 155606).
HARRISBURG, Pa. — The Pennsylvania Life and Health Insurance Guaranty Association Act (PLHIGA Act) is preempted by federal law to the extent that it authorizes PLHIGA to assess Medicare Part C and D premiums collected by its member insurers, the Pennsylvania Commonwealth Court ruled Sept. 9, finding no error in an order by the state’s insurance commissioner sustaining health insurers’ appeals and reversing challenged assessments (Pennsylvania Life and Health Insurance Guaranty Association v. Pennsylvania Insurance Department, Nos. 940 - 947 C.D. 2018, Pa. Cmwlth., 2019 Pa. Commw. LEXIS 840).
ST. LOUIS — Following a $102,135,293.07 judgment in favor of insolvent funeral insurers’ receiver and state insurance guaranty associations in a dispute regarding allegations over the mishandling of the insurers’ funds, two banks in a Sept. 10 motion request an indicative ruling from a Missouri federal court stating that the court will correct a miscalculation of prejudgment interest if the Eighth Circuit U.S. Court of Appeals grants leave to do so (Jo Ann Howard & Associates P.C., et al. v. J. Douglas Cassity, et al., No. 09-01252, E.D. Mo.).
NEW YORK — A federal judge in New York on Sept. 10 granted summary judgment to a runoff insurer because a criminal conviction against an investment company’s former executive extinguishes rights to indemnification and advancement of litigation expenses under investment management agreements (IMAs) (In re: Platinum-Beechwood Litigation, No. 18-6658, David Levy v. Senior Health Insurance Company of Pennsylvania, No. 19-3211, S.D. N.Y.).
NEW YORK — Senior Health Insurance Company of Pennsylvania (SHIP) on Sept. 4 filed amended cross-claims and a third-party complaint, alleging a Ponzi-like scheme consisting of reinsurance companies and related investment management and servicing entities in which fraudulent misrepresentations were made to gain investment control and discretion over $320 million of the runoff insurer’s reserves (In re Platinum-Beechwood litigation, No. 18-6658; Senior Health Insurance Company of Pennsylvania v. Beechwood Re Ltd., et al., No. 18-6658; Martin Trott, et al. v. Platinum Management (NY) LLC, et al., No. 18-10936, Melanie L. Cyganowski v. Beechwood Re Ltd., et al., Senior Health Insurance Company of Pennsylvania v. Beechwood Re Ltd., et al., and Senior Health Insurance Company of Pennsylvania v. PB Investment Holdings Ltd., et al., No. 18-12018, S.D. N.Y.).
CHICAGO — An Illinois appeals panel on Sept. 5 upheld a lower court’s entry of summary judgment to the state’s insurance guaranty fund on liability for an insolvent insurer’s workers’ compensation policy because a truck driver was covered through another workers’ compensation insurance policy under a statutory merger (Illinois Insurance Guaranty Fund v. Priority Transportation Inc., No. 1-18-1454, Ill. App., 1st Dist., Div. 4, 2019 Ill. App. Unpub. LEXIS 1651).
NEW YORK — A New York federal judge on Aug. 20 addressed and granted in part five motions to dismiss a first amended complaint, 10 motions to dismiss reinsurers’ third-party complaint and 14 motions to dismiss a runoff insurer’s third-party complaint in a lawsuit over a $320 million “massive fraudulent scheme” filed by a receiver of investment funds (In re Platinum-Beechwood Litigation, No. 18-6658, Melanie L. Cyganowski, et al. v. Beechwood Re Ltd., et al., No. 18-12018, S.D. N.Y.).
NEW YORK — While dismissing the majority of a reinsurer and its entities’ counterclaims, a New York federal judge on Sept. 3 allowed a breach of good faith and fair dealing counterclaim against a runoff insurer to survive in a case over the misuse and mismanagement of $320 million (In re Platinum-Beechwood Litigation; Senior Health Insurance Company of Pennsylvania v. Beechwood Re Ltd., et al., No. 18-6658, S.D. N.Y., 2019 U.S. Dist. LEXIS 149708).
WASHINGTON, D.C. — Appropriations riders simply limited Patient Protection and Affordable Care Act (ACA) risk-corridor funding and cannot be read as repealing payments obligations under the program, five insurers told the U.S. Supreme Court on Aug. 30 (Land of Lincoln Mutual Health Insurance Co. v. United States, No. 18-1038, Moda Health Plan Inc., et al. v. United States, No. 18-1028, Maine Community Health Options v. United States, No. 18-1023, U.S. Sup.).
DALLAS — While an insurer says it is entitled to summary judgment on an insured’s declaratory judgment claim concerning the ability to raise premium costs because it followed an assumption reinsurance agreement and a rehabilitation plan involving another insurer, the insured on Aug. 28 asked a Texas federal court to deny the motion because there is a genuine dispute of material fact (Don B. Chae v. American Fidelity Assurance Co., No. 19- 157, N.D. Texas).
NEW YORK — Finding a “lack of good cause” and “significant prejudice,” a federal judge in New York on Aug. 21 dismissed as untimely a runoff insurer’s fraudulent misrepresentation lawsuit against an investment bank and a financial services company for their alleged role in the investment of $320 million with the affiliates of a failed Ponzi scheme (In re Platinum-Beechwood Litigation, No. 18-6658, Senior Health Insurance Company of Pennsylvania v. Lincoln International LLC, et al., No. 19-07137, S.D. N.Y., 2019 U.S. Dist. LEXIS 141641).
RIVERSIDE, Calif. — A federal judge in California on Aug. 6 granted contractors’ unopposed ex parte application for approval of a $3.6 million supersedeas bond and a stay of a judgment’s enforcement against them in an insolvent surety’s reimbursement lawsuit (Western Insurance Co. in liquidation v. Frontier Homes LLC., et al., No. 17-2181, C.D. Calif.).
GREENVILLE, S.C. — A federal magistrate judge in South Carolina on Aug. 22 recommended the entry of summary judgment for two defendants on a special deputy receiver’s claim under the Racketeer Influenced and Corrupt Organization Act in a lawsuit alleging a scheme to defraud a multiple-employer self-insured health plan with fraudulent letters of credit (LOC) (Michael J. FitzGibbons, et al. v. Alton Atkinson, et al., No. 17-2092, D. S.C.).