Mealey's Insurance Insolvency
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November 18, 2021
Insolvent Excess Insurer Moves To Substitute Party In Antitrust Coverage Dispute
KANSAS CITY, Kan. — One week after a federal magistrate judge in Kansas lifted a stay of a consolidated lawsuit brought by primary and excess managed care organization errors and omissions insurers disputing coverage for antitrust class actions, an insolvent excess insurer on Nov. 16 filed an unopposed motion to substitute another insurer to assume responsibility for the claims and defenses that are alleged by and against it.
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November 18, 2021
Judge: 11th Amendment Bars Suit Against Kansas Insurance Commissioner
KANSAS CITY, Kan. — A Kansas federal judge on Oct. 23 found lack of subject matter jurisdiction regarding allegations by former affiliates of an insolvent insurer that Kansas Insurance Commissioner Vicki Schmidt tortiously interfered with contracts, granting dismissal of the suit without prejudice under the 11th Amendment to the U.S. Constitution.
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November 17, 2021
Defendant Asks Federal Court To Defer Summary Judgment Motions In Asbestos Suit
NEW ORLEANS — Following a Louisiana federal judge’s administrative stay of an asbestos liability lawsuit from the date a Pennsylvania court declared one of the defendant’s insurers insolvent, another defendant on Nov. 10 asked that two other defendants’ motions for summary judgment be deferred until plaintiffs can be substituted as a party in an asbestos liability lawsuit.
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November 17, 2021
Judge Stays Trustee’s Sale Of Certain Life Insurance Policies Pending Appeal
FORT LAUDERDALE, Fla. — A federal judge in Florida on Nov. 8 stayed a trustee’s sale of life insurance policies in which an investor owned fractional interests pending the investor’s appeal of an earlier ruling that asset purchase agreements (APAs) affirm rather than preclude the trustee's ability to sell policies retained by investors.
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November 16, 2021
Guaranty Association Cannot Be First-Priority Insurer, Michigan Panel Affirms
GRAND RAPIDS, Mich. — A Michigan appeals panel held Nov. 9 that a lower court did not err by granting summary disposition in favor of Michigan Property & Casualty Guaranty Association (MPCGA) in a lawsuit arising from MPCGA’s refusal to pay benefits under a worker's disability compensation insurance policy that was issued by a now insolvent insurer, finding that “the MPCGA can only be an insurer of last resort” and “cannot be the first-priority insurer ahead of” a no-fault insurer for a semi-truck.
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November 11, 2021
Bankruptcy Judge Orders Turnover Of Attorney Files To Insurer’s Liquidators
NEW YORK — A New York federal bankruptcy judge on Nov. 8 ordered law firms that represented or represent Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) to comply with a turnover order, noting a determination that PBLA’s attorney-client privilege belongs to PBLA’s joint provisional liquidators.
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November 09, 2021
Magistrate Judge Won’t Allow Amended Answer After Asbestos Insurer’s Insolvency
WASHINGTON, D.C. — Allowing a supplemental answer would cause undue delay and inconvenience and would not promote speedy resolution of a man’s case alleging exposure to asbestos at a shipyard, a federal magistrate judge in Louisiana said Oct. 6 in denying a motion to amend without prejudice.
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November 05, 2021
Whether Firm Committed Malpractice Did Not Matter; Insurance Case Could Not Be Won
LOS ANGELES — A California appeals panel on Nov. 2 affirmed a lower court’s ruling in favor of a law firm and its attorney arising from clients’ claims that they would have been able to collect a $2 million judgment against an insolvent insurer but for the law firm and attorney’s lack of due diligence in obtaining a $3.5 million default judgment against a contractor, finding that whether the law firm committed malpractice was irrelevant because the clients’ could not have won their insurance case.
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November 04, 2021
Panel Vacates Ruling In Favor Of Georgia Insurers Insolvency Pool In Its Setoff Suit
ATLANTA — A Georgia appeals panel on Nov. 3 vacated a lower court’s grant of summary judgment in favor of Georgia Insurers Insolvency Pool that relieved it of its duty to issue payments on a pending workers' compensation benefits claim, finding that Georgia’s State Board of Workers' Compensation has jurisdiction over the Insolvency Pool's claims.
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November 02, 2021
Judge: Asbestos Defendant Can Amend Answer After Insurer’s Insolvency
NEW ORLEANS — Because it will include defenses that did not arise until after an insurer’s insolvency, a defendant in an asbestos case may amend its answer, a federal judge in Louisiana said Oct. 28.
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November 01, 2021
Judge Grants Amended Answers, Defenses After Asbestos Insurer’s Insolvency
NEW ORLEANS — Two defendants in a twice removed asbestos case are entitled to file supplemental answers and defenses in light of their insurer’s insolvency, a federal judge in Louisiana said Oct. 28.
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October 28, 2021
Insurance Guaranty Agency Appeals Federal Court’s Dismissal Of Medicare Suit
RALEIGH, N.C. — The North Carolina Insurance Guaranty Association (NCIGA) on Oct. 19 filed a notice of appeal of a North Carolina federal court’s ruling that granted the secretary of Health and Human Services and federal agencies’ motion to dismiss its lawsuit challenging the reporting requirements under the federal Medicare Secondary Payer (MSP) statute.
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October 21, 2021
3rd Circuit Dismisses Trustee’s Appeal Of Bankruptcy Court Order
PHILADELPHIA — The Third Circuit U.S. Court of Appeals on Sept. 8 dismissed an appeal by the Chapter 7 trustee for an insurer and its subsidiaries 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 after the suit was partially remanded to the federal court with instruction to remand to the bankruptcy court for approval of a settlement.
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October 21, 2021
Judge Rules In Favor Of Holding Company In Dispute Involving Insolvent Insurer
DALLAS — After adopting a magistrate’s judge report that recommended dismissing a Texas attorney’s lawsuit seeking unpaid attorney fees from a holding company that provided commercial vehicle insurance through an insurer that was declared insolvent and put into liquidation, a federal judge in Texas on Oct. 18 entered judgment in favor of the defendant.
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October 21, 2021
Counsel Reports Death Of Co-Defendant In Dispute Over Personal Injury Judgment
SAVANNAH, Ga. — Defendants’ counsel on Oct. 18 reported the death of one of the co-defendants in a commercial auto insurer’s lawsuit filed in a Georgia federal court seeking a declaration that there is no coverage for the insured, its owners and an employee for an underlying $112,466.57 personal injury default judgment.
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October 20, 2021
Judge Details Discovery Plan In Insurers’ $14.5M Suit Brought Against Borrower
RALEIGH, N.C. — A federal judge in North Carolina on Oct. 1 announced deadlines for discovery in a lawsuit filed by three insurers in rehabilitation seeking to recover $14.5 million from a borrower under a loan agreement for its alleged breach of contract in failing to make a first interest payment.
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October 19, 2021
Magistrate Issues Qualified Protective Order In Suit Over Insolvent Health Plan
CHICAGO — A federal magistrate judge in Illinois on Oct. 5 issued a qualified protective order in a lawsuit alleging that insurance brokers 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.
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October 19, 2021
Trustee Reports Receipt Of Additional $1.5M In Restitution Funds In SEC Suit
FORT LAUDERDALE, Fla. — A trustee on Oct. 15 submitted a status report regarding the wind down of the Mutual Benefits Keep Policy Trust in a Securities Exchange Commission lawsuit alleging that the defendants fraudulently sold investment interests in life insurance policies, reporting that he has received an additional $1.5 million in restitution funds that will continue to be used to subsidize the administrative fees payable by the fraud victims who hold investments in keep policies.
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October 18, 2021
Bankruptcy Code Not Reverse Preempted By Texas Insurance Code, Judge Says
WILMINGTON, Del. — A Delaware federal bankruptcy judge on Oct. 15 held the bankruptcy court is not reverse preempted from determining whether disputed funds are part of an estate because, at its base, a lawsuit involves a contract dispute that will determine the owner of the disputed funds, further finding that an insurer’s special deputy receiver has failed to establish cause for lifting an automatic stay.
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October 14, 2021
Objecting Class Members Appeal Attorney Fees Awards In ACA Risk-Corridor Dispute
WASHINGTON, D.C. — Objecting class members on Oct. 1 appealed the U.S. Court of Federal Claims’ judgments granting attorney fee awards for class counsel of insurers in a lawsuit seeking a declaratory judgment that the U.S. government owes the insurers millions of dollars under the Patient Protection and Affordable Care Act (ACA) risk-corridor program.