Mealey's Insurance Insolvency

  • July 12, 2019

    Defendant:  Special Deputy Receiver For Insurer Does Not Show Evidence Of RICO Acts

    ANDERSON, S.C. — A defendant accused of playing a role in an alleged scheme to defraud a multiple-employer self-insured health plan with fraudulent letters of credit (LOC) argues in a July 9 reply that the insurer’s special deputy receiver’s “weak tactics do not amount to evidence and will not win at trial” on the receiver’s claim under the Racketeer Influenced and Corrupt Organization Act (Michael J. FitzGibbons, et al. v. Alton Atkinson, et al., No. 17-2092, D. S.C.).

  • July 11, 2019

    Judge Upholds Denial Of Advancement Of Expenses In Runoff Insurer’s Misuse Case

    NEW YORK — In a runoff insurer’s case over allegations of misuse of $320 million by affiliates of a failed Ponzi scheme, a New York federal judge on July 8 denied reconsideration of his ruling denying summary judgment to the affiliates on their counterclaim for advancement of expenses (In re:  Platinum-Beechwood Litigation; Senior Health Insurance Company of Pennsylvania v. Beechwood Re Ltd., et al., No. 18-6658, David Levy v. Senior Health Insurance Company of Pennsylvania, No. 19-3211, and B Asset Manager L.P., et al. v. Senior Health Insurance Company of Pennsylvania, No. 19-4487, S.D. N.Y., 2019 U.S. Dist. LEXIS 112742).

  • July 11, 2019

    Judge:  Arbitration Panel Needs To Decide If Insurers Can File Motion To Enforce Statutes

    NEW YORK — New York and Indiana security statutes apply to a reinsurer despite pending liquidation proceedings, a New York federal judge held July 10; however, the judge denied a motion to enforce the statutes because an arbitration panel must decide first whether insurers are barred from bringing the motion (In re Platinum-Beechwood litigation, No. 18-06658; Melanie L. Cyganowski, et al. v. Beechwood Re Ltd., et al., Washington National Insurance Co., et al. v. Beechwood Re Ltd., et al., No. 18-12018, S.D. N.Y., 2019 U.S. Dist. LEXIS 114645).

  • July 10, 2019

    Panel Affirms Denial Of Bank’s Claim In Insurer’s Receivership Proceeding

    OKLAHOMA CITY — A bank’s alleged acts were not undertaken “in the performance of services for or on behalf of a customer,” an Oklahoma appeals panel majority ruled July 3, upholding the denial of proofs of claim in an insurer’s receivership proceeding (John D. Doak v. Red Rock Insurance Co., et al., No. 115716, Okla. App., Div. 1, 2018 Okla. Civ. App. LEXIS 67).

  • July 08, 2019

    Judge Bars Punitive Damages Testimony, Evidence In Insurer’s Breach Of Duty Case

    COLUMBIA, S.C. — An insurer’s claims over a bank’s alleged breach of duties as trustee of a reinsurance trust for an insolvent insurer are subject to the jurisdiction of the insurer’s liquidation proceeding, a South Carolina federal judge ruled July 3, granting the bank’s motion to exclude testimony and evidence related to punitive damages (Accident Insurance Company Inc. v. U.S. Bank National Association, et al., No. 16-2621, D. S.C., 2019 U.S. Dist. LEXIS 111371).

  • July 08, 2019

    $102M Judgment Awarded Over Mishandling Of Funds For Insolvent Insurers

    ST. LOUIS — Following a four-week trial in a dispute filed by a special deputy receiver and state insurance guaranty associations regarding allegations over the mishandling of insolvent funeral insurers’ funds, a Missouri federal judge on July 3 issued a $102,135,293.07 judgment in favor of the receiver and guaranty associations and against two banks (Jo Ann Howard & Associates P.C., et al. v. J. Douglas Cassity, et al., No. 09-01252, E.D. Mo., 2019 U.S. Dist. LEXIS 110998).

  • July 03, 2019

    Insurers Oppose Motions To Dismiss Third-Party Complaint Over Fraudulent Scheme

    NEW YORK — Insurers argue in a June 12 memorandum to a New York federal court that there is support for their third-party allegations of fraudulent inducement and fraud and violations of the Racketeer Influenced and Corrupt Organizations Act in a receiver’s lawsuit seeking redress for damages arising out of a fraudulent scheme involving Platinum Partners Credit Opportunities Master Fund LP (PPCO funds) (In re Platinum-Beechwood litigation, No. 18-06658; Washington National Insurance Co., et al. v. Platinum Management [NY] LLC, et al., No. 18-12018, S.D. N.Y.).

  • July 02, 2019

    Runoff Insurer Opposes Dismissal Of Third-Party Claims For Aiding And Abetting

    NEW YORK — In response to 10 motions to dismiss its third-party complaint alleging aiding-and-abetting fraud and breach of fiduciary duty in a “massive fraudulent scheme,” a runoff insurer contends in a June 28 memorandum to a New York federal court that each moving defendant “attempts to pass the buck on responsibility for the egregious mishandling” of $320 million of its funds (Melanie L. Cyganowski v. Beechwood Re Ltd., et al., No. 18-12018, S.D. N.Y.).

  • July 01, 2019

    Reinsurer, Third-Party Claims Administrator Dismiss Breach Of Contract Case

    INDIANAPOLIS — A third-party claims administrator and a reinsurer agreed on June 28 to dismiss an Indiana federal court case over breach of contract claims for failure to pay fees under a master services agreement (Fuzion Analytics Inc. v. Beechwood Re Ltd., No. 18-03072, S.D. Ind.).

  • June 28, 2019

    Judge Stays Insurer’s Case Against Reinsurers Based On Rehabilitation Order

    SAN JUAN, Puerto Rico — A Puerto Rico federal judge issued a stay on June 25 of a dispute between an insurer and various of its reinsurers regarding losses from two hurricanes because the insurer was recently placed into rehabilitation proceedings (Integrand Assurance Co. v. Everest Reinsurance Co., et al., No. 19-01111, D. Puerto Rico).

  • June 27, 2019

    Wisconsin Trial Judge Initiates Liquidation Proceeding Against Insurer

    MADISON, Wis. — A Wisconsin trial judge on May 2 ordered Northwestern National Insurance Company of Milwaukee, Wisconsin (NNIC) into liquidation and named the state’s insurance commissioner as liquidator (In the matter of the liquidation of Northwestern National Insurance Company of Milwaukee, Wisconsin, No. 2019CV001209, Wis. Cir., Dane Co.).

  • June 27, 2019

    Bicyclist Sues New Jersey Insurance Guaranty Association For Injuries

    PATERSON, N.J. — A New Jersey resident seeks damages in a June 24 complaint filed in a state court against the New Jersey Property-Liability Insurance Guaranty Association (NJPLIGA) for injuries sustained while riding a bicycle (Moises Gonzalez v. New Jersey Property-Liability Insurance Guaranty Association, et al., No. PAS-L-001970-19, N.J. Super., Passaic Co.).

  • June 27, 2019

    Trial Justice: Insurers Cannot Seek Subrogation From Insolvent Insurer

    BROOKLYN, N.Y. — New York and Pennsylvania law state that solvent insurers cannot seek subrogation from an estate’s insolvent insurer to collect payments made to their own insureds for fire damage, a New York justice ruled May 17 (Tara McPherson, et al. v. Cross County Savings Bank, et al., No. 506746/13, N.Y. Sup., Kings Co., 2019 N.Y. Misc. LEXIS 2829).

  • June 26, 2019

    Insurer Seeks Stay Of Case With Reinsurers Due To Rehabilitation Proceedings

    SAN JUAN, Puerto Rico — An insurer asks in a June 20 motion that a Puerto Rico federal judge issue a 90-day stay of its lawsuit against various reinsurers regarding losses from two hurricanes in light of the recent rehabilitation proceedings initiated against the insurer (Integrand Assurance Co. v. Everest Reinsurance Co., et al., No. 19-01111, D. Puerto Rico).

  • June 26, 2019

    Judge Addresses 2nd Round Of Motions To Dismiss RICO Claims In Fraud Case

    NEW YORK — In a 65-page ruling, a New York federal judge on June 21 disposed of a second round of motions to dismiss a second amended complaint (SAC) brought by two hedge funds’ liquidators with regard to allegations in connection “with one of the most spectacular hedge fund collapses” (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., 2019 U.S. Dist. LEXIS 104562).

  • June 26, 2019

    Judge Dismisses Insureds’ Breach Of Contract Case Against Insolvent Insurer

    LOS ANGELES — A California federal judge on June 25 dismissed a breach of contract case because the insureds failed to show why the case should not be handled in the liquidation proceeding for their insurer (Yancy Alvarez, et al. v. Access General Insurance Co., No. 18-336, C.D. Calif., 2019 U.S. Dist. LEXIS 106226).

  • June 26, 2019

    Runoff Insurer Opposes Reconsideration Of Ruling On Advancement Of Expenses

    NEW YORK — A run-off insurer argues in a June 21 opposition filed in New York federal court that affiliates of a failed Ponzi scheme strain the language of investment management agreements (IMAs) to support their motion for reconsideration of a ruling on a counterclaim for advancement of expenses (In re:  Platinum-Beechwood Litigation; Senior Health Insurance Company of Pennsylvania v. Beechwood Re Ltd., et al., No. 18-6658, and David Levy v. Senior Health Insurance Company of Pennsylvania, No. 19-3211, S.D. N.Y., 2019 U.S. Dist. LEXIS 81271).

  • June 24, 2019

    Judge Bars Government Investigations Evidence In Breach Of Duties Dispute

    COLUMBIA, S.C. — In a case over a bank’s alleged breach of duties as trustee of a reinsurance trust for an insolvent insurer, a South Carolina federal judge on June 21 excluded evidence related to government investigations but refused to bar evidence concerning bank secrecy act/anti-money laundering compliance (BSA/AML) training (Accident Insurance Company Inc. v. U.S. Bank National Association, et al., No. 16-2621, D. S.C., 2019 U.S. Dist. LEXIS 103923).

  • June 24, 2019

    U.S. Supreme Court Decides To Hear Health Insurers Over $12B ACA Dispute

    WASHINGTON, D.C. — The U.S. Supreme Court on June 24 granted certification to health insurers to decide whether the United States evaded its statutory promise to pay them for losses when the government blocked $12 billion in funding under the Patient Protection and Affordable Care Act (ACA) risk-corridor program (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.).

  • June 24, 2019

    Judge Approves $9.5M Settlement Between Insured, Insurer In Liquidation

    CONCORD, N.H. — A New Hampshire judge on June 3 approved a $9.5 million settlement between the liquidator of The Home Insurance Co. and one of its insureds regarding alleged liabilities for asbestos bodily injury and environmental exposures (In the matter of the liquidation of The Home Insurance Co., No. 2003-EQ-0106, N.H. Super., Merrimack Co.).

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