Mealey's Insurance Insolvency

  • December 08, 2020

    Professional Liability Insurer: No Breach Of Duty As Claim Was Paid Under Lower Limit

    NEW HAVEN, Conn. — A professional liability insurer contends in a Dec. 4 reply brief to a Connecticut federal court that a settlement of negligence allegations against a captive manager is a “governmental” claim that is capped and was paid under the policy’s $25,000 sublimit and not under the policy’s $3 million limit as suggested by an insolvent insurer’s receiver (Trinidad Navarro v. Allied World Surplus Lines Insurance Company, No. 20-1305, D. Conn.).

  • December 07, 2020

    Insolvent Insurer Owes $1M To Contractor For Breach Of Duty To Defend, Panel Says

    HARRISBURG, Pa. — An insured contractor is entitled to $1,092,250.09 for an insolvent insurer’s breach of its duty to defend the insured against a defective work lawsuit and a resulting judgment, the Pennsylvania Commonwealth Court held Dec. 3 (Franjo Vernic v. Lincoln General Insurance Company, No. 4 LIN 2017, Pa. Cmwlth., 2020 Pa. Commw. LEXIS 755).

  • December 04, 2020

    Borrowers: Counterclaims Against Insurer In Rehabilitation Should Proceed On Merits

    RALEIGH, N.C. — Three borrowers, which are named in separate suits over their alleged breach of loan agreements, filed identical opposition briefs on Dec. 2 telling a North Carolina federal court that their bad faith and breach of fiduciary duty counterclaims against an insurer in rehabilitation satisfy minimal pleading requirements to overcome the dismissal stage (Colorado Bankers Life Insurance Company v. Kite Asset Management, LLC, No. 20-371; Colorado Bankers Life Insurance Company v. Summerville Asset Management, LLC, et al., No. 20-432; Colorado Bankers Life Insurance Company v. TAC Investments, LLC, No. 20-453, E.D. N.C.).

  • December 04, 2020

    Wealth Firms Seek Dismissal Of Breach Of Contract Suit Filed By Insurers In Rehabilitation

    RALEIGH, N.C. — Two wealth management firms with interests in a loan agreement argue in Nov. 30 motions that a North Carolina federal court should dismiss a lawsuit brought by two insurers in rehabilitation seeking $12.5 million under the loan agreement because the insurers fail to assert claims for breach of contract and foreclosure on collateral (Colorado Bankers Life Insurance Company, et al. v. Academy Financial Assets, LLC, et al., No. 20-517, E.D. N.C.).

  • December 04, 2020

    Health Plan’s Receiver Awarded $7.1M Default Judgment In Suit Over Fraudulent Transactions

    ANDERSON, S.C. — The special deputy receiver of a multiple-employer self-insured health plan was awarded a $7.1 million default judgment on Nov. 30 by a South Carolina federal judge against parties accused of defrauding the health plan by entering into fraudulent transactions via letters of credit (LOCs) (Michael J. FitzGibbons v. Alton Atkinson, et al., No. 17-2092, D. S.C.).

  • December 02, 2020

    Rehabilitator Seeks Dismissal Of Case Concerning Proposed Plan For Insurer, Insureds

    BATON ROUGE, La. — Noting a lack of a case or controversy, the rehabilitator for Senior Health Insurance Company of Pennsylvania (SHIP) on Nov. 24 requested dismissal of the Louisiana insurance commissioner’s Louisiana federal court declaratory judgment lawsuit, calling it a collateral attack to preemptively enjoin a Pennsylvania trial court’s consideration of a proposed rehabilitation plan for SHIP (James J. Donelon v. Jessica K. Altman, No. 20-604, M.D. La.).

  • November 25, 2020

    Federal Judge Dismisses City Of Newark From Personal Injury Suit

    NEWARK, N.J. — A New Jersey federal judge on Oct. 26 dismissed the city of Newark from a woman’s personal injury suit seeking damages from the New Jersey Property-Liability Insurance Guaranty Association (NPLIGA) and others caused by a police car chase that led to a collision (Patricia Brinson v. Newark, et al., No. 20-9606, D. N.J., 2020 U.S. Dist. LEXIS 198351).

  • November 25, 2020

    Wrongful Acts Claims Are Covered By Excess Policy, Insurer’s Liquidator Says

    SIOUX FALLS, S.D. — An excess insurance policy above a directors and officers (D&O) insurance policy provides coverage for wrongful acts in excess of $21 million because the claims occurred within the policy period, the liquidator of ReliaMax Surety Co. (RSC) says in an Oct. 15 motion filed in South Dakota federal court (Larry Deiter v. XL Specialty Insurance Co., No. 20-3009, D. S.D.).

  • November 23, 2020

    Insurer’s Receiver: Claim Falls Under $3M Limit In Captive Manager’s Insurance Policy

    NEW HAVEN, Conn. — The receiver of an insolvent insurer argues in a Nov. 20 opposition brief to a Connecticut federal court that his claim against a captive manager regarding the settlement of negligence allegations is not limited to a $25,000 sublimit in the captive manager’s professional liability insurance policy but rather falls within the policy’s $3 million limit (Trinidad Navarro v. Allied World Surplus Lines Insurance Company, No. 20-1305, D. Conn.).

  • November 23, 2020

    Government Is Not Allowed To Set Off ACA Risk-Corridor Liabilities, Insolvent Insurers Say

    WASHINGTON, D.C. — A group of largely insolvent insurers argue in their Nov. 20 motion to dismiss with the U.S. Court of Federal Claims that the U.S. government is reverse-preempted under the McCarran-Ferguson Act from seeking setoffs of debts against risk-corridor liabilities owed to the insurers under the Patient Protection and Affordable Care Act (ACA) risk corridor (Health Republic Insurance Company v. United States, No. 16-259, Fed. Clms.).

  • November 20, 2020

    Insurer In Rehabilitation Seeks Dismissal Of Bad Faith, Breach Of Duty Claims

    RALEIGH, N.C. — A health insurer in rehabilitation on Nov. 19 asked a North Carolina federal court to dismiss bad faith and breach of fiduciary duty counterclaims brought by a borrower and pledgors in their dispute over an alleged default under a loan agreement (Colorado Bankers Life Insurance Company v. Tybee Island Asset Management, LLC, et al., No. 20-520, E.D. N.C.).

  • November 20, 2020

    Justice Asks Why Ancillary Receivership For Insurer Should Not Be Granted

    NEW YORK — A New York justice on Nov. 16 asked for parties, including the Illinois insurance director, to show cause why an ancillary receivership proceeding should not be ordered against American Service Insurance Co. (ASIC), an insolvent Illinois insurer (In the matter of American Service Insurance Company, 452249/2020, N.Y. Sup., New York Co.).

  • November 19, 2020

    Insurer’s Redress Suit Is Halted As New York Appeals Court Stays Liquidation Order

    NEW YORK — Citing a New York appellate court’s recent stay of a liquidation order against a taxi insurer, a New York federal judge on Nov. 17 stayed the insurer’s lawsuit against New York Superintendent of Financial Services Linda Lacewell, seeking redress for violation of its equal protection rights (Park Insurance Co. v. Maria T. Vullo, et al., No. 18-9628, S.D. N.Y.).

  • November 17, 2020

    New York Appeals Panel Stays Liquidation Order Against Taxi Insurer

    NEW YORK — The First Department New York Supreme Court Appellate Division on Nov. 12 granted a stay of a liquidation order against Park Insurance Co. pending the taxi insurer’s appeal (Maria Vullo v. Park Insurance Company, No. 2020-03868, N.Y. Sup., App. Div., 1st Dept.).

  • November 16, 2020

    Insurer’s Liquidators Push For U.S. Supreme Court Review Of Arbitration Issue

    WASHINGTON, D.C. — “With the shoe on the other foot,” liquidators of an insolvent health insurer argue in their Nov. 13 reply brief to the U.S. Supreme Court that an actuarial firm “tries to duck review of an issue” that it is requesting be taken up in a similar case and petition for writ of certiorari by suggesting that the Iowa high court interpreted state law when ordering arbitration of common-law tort claims based upon an arbitration provision in the insurer and firm’s preinsolvency agreement (Doug Ommen, et al. v. Milliman, Inc., et al., No. 20-249, U.S. Sup.).

  • November 16, 2020

    Judge Orders ACCC Insurance Company Into Rehabilitation

    AUSTIN, Texas — ACCC Insurance Co. was placed into rehabilitation by a Texas judge on Oct. 21 and the state’s insurance commissioner was appointed rehabilitator (Texas v. ACCC Insurance Company, No. D-1-GN-20-006278, Texas Dist., Travis Co.).

  • November 13, 2020

    California Insurance Company Files Anti-SLAPP Motion In Light Of Rehabilitation Plan

    REDWOOD CITY, Calif. — In response to the California insurance commissioner’s recent rehabilitation plan against it, California Insurance Co. (CIC) filed an anti-SLAPP motion on Oct. 29 in a California state court, alleging that political motivations were behind its conservatorship and seeking to protect its First Amendment rights (Insurance Commissioner of the State of California v. California Insurance Company, No. 19CIV06531, Calif. Super., San Mateo Co.).

  • November 12, 2020

    D&O Insurer: Declaratory Judgment Case From Insurer’s Receiver Should Be Dismissed

    OKLAHOMA CITY — Declaratory judgment claims brought by BancInsure Inc.’s receiver are an impermissible direct action and do not trigger coverage, a directors and officers insurer argues in its Nov. 11 reply brief asking an Oklahoma federal court to dismiss the case (Glen Mulready v. Westchester Fire Insurance Company, No. 20-782, W.D. Okla.).

  • November 09, 2020

    COMMENTARY: Can Businesses ‘Waive’ Goodbye To COVID 19 Liability? Basic Principles Of Third Party Liability Waivers And CGL Insurance Protections

    By Gabrielle Sigel, Jan A. Larson, Sara M. Stappert and Anna W. Margasinska

  • November 09, 2020

    Hedge Funds Liquidators: Punitive Damages, Incentive Fees Should Not Be Excluded

    NEW YORK — Before trial in an aiding and abetting lawsuit over the collapse of hedge funds, the hedge funds liquidators argue in a Nov. 5 omnibus sur-reply that a New York federal court should decline a request by a former member of Platinum Management (NY) LLC to preclude evidence on incentive fees and punitive damages (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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