Mealey's Insurance Insolvency
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March 19, 2019
Judge Dismisses Run-Off Insurer’s RICO, Fraud Claims In $320M Misuse Dispute
NEW YORK — In a dispute over the alleged mismanagement and misuse of $320 million by a reinsurer and its entities, a New York federal judge on March 15 dismissed a run-off insurer’s claims for violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act, fraud, constructive fraud and unjust enrichment (Senior Health Insurance Company of Pennsylvania v. Beechwood Re Ltd., et al., No. 18-6658, S.D. N.Y.).
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March 19, 2019
Judge Stays Personal Injury Case Based On Liquidation Order Against Insurer
SAN JUAN, Puerto Rico — A Puerto Rico federal judge stayed a personal injury lawsuit on March 15 for six months based upon a liquidation order issued against an insolvent insurer so that the Puerto Rico Guaranty Association of Miscellaneous Insurance could evaluate the plaintiff’s claim (Brenda Lee Maduro Colon v. Coca-Cola Puerto Rico Bottlers, No. 17- 01591. D. Puerto Rico, 2019 U.S. Dist. LEXIS 42969).
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March 18, 2019
Proposed Findings, Conclusions Offered In Mishandling Case As To Insolvent Funeral Insurers
ST. LOUIS — A Missouri federal court was presented with parties’ proposed findings of fact and conclusions of law on March 4 in a dispute filed by a special deputy receiver and state insurance guaranty associations regarding allegations over the mishandling of insolvent funeral insurers’ funds (Jo Ann Howard & Associates P.C., et al. v. J. Douglas Cassity, et al., No. 09-01252, E.D. Mo.).
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March 18, 2019
Insurers’ Receiver Ordered To Address If Merchandise, Service Trust Belongs To Estate
ST. LOUIS — In a breach of fiduciary duty lawsuit, a Missouri federal judge on March 14 ordered the special deputy receiver for three insolvent insurers to provide further briefing establishing that a third amended and restated agreement for a merchandise and services trust currently belongs to the receivership estate (Winner Road Properties LLC v. BMO Harris Bank, N.A. v. Jo Ann Howard & Associates, P.C., No. 16-1395, E.D. Mo., 2019 U.S. Dist. LEXIS 42121).
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March 11, 2019
Amici: Government Pulled Risk Corridor Rug Out From Under ACA Insurers
WASHINGTON, D.C. — The government should not be permitted to incentivize private companies to participate in its Patient Protection and Affordable Care Act (ACA) risk corridor program and then retroactively revoke its promises in vague riders, eight amicus curiae parties tell the U.S. Supreme Court in March 8 briefs (Land of Lincoln Mutual Health Insurance Co. v. United States, No. N/A, Moda Health Plan Inc. v. United States, No. 18-1028, Blue Cross and Blue Shield of North Carolina v. United States, No. 17-2154, Maine Community Health Options v. United States, No. 18-1023, U.S. Sup.).
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March 08, 2019
Panel: Solvent, Insolvent Insurers Are Not Required To Provide Identical Coverage
ATLANTA — Because the Georgia Insurer’s Insolvency Pool Act’s exhaustion provision does not require solvent and insolvent insurers to provide identical coverage, a Georgia appeals panel on March 7 reversed a lower court’s denial of summary judgment to the Georgia Insurers Insolvency Pool in part, vacated it in part and remanded the case for further proceedings (Georgia Insurers Insolvency Pool v. Carla DuBose and Carla DuBose v. Georgia Insurers Insolvency Pool, Nos. A18A1531, A18A1532, Ga. App., 2019 Ga. App. LEXIS 144).
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March 06, 2019
Insurer Files 2nd Amended Complaint Against New York Superintendent For Redress
NEW YORK — On March 1, an insurer filed a second amended complaint in a New York federal court against the New York superintendent of Financial Services, seeking redress for violation of its equal protection rights (Park Insurance Co. v. Maria T. Vullo, et al., No. 18-09628, S.D. N.Y.).
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March 05, 2019
Panel Dismisses Claims By Insurer’s Rehabilitator Against Actuarial Services Company
BATON ROUGE, La. — In a professional negligence lawsuit filed by an insurer’s rehabilitator, a Louisiana appeals panel on Feb. 28 reversed a lower court’s ruling and, instead, dismissed claims against an actuarial services company in light of an arbitration provision in an agreement between that company and the insurer (James J. Donelon v. Terry S. Shilling, et al., No. 651,069, La. App., 1st Cir., 2019 La. App. LEXIS 360, 2019 La. App. LEXIS 363).
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March 05, 2019
Judge Denies Judgment To Bank On Claims Over Role For Reinsurance Trust
COLUMBIA, S.C. — A South Carolina federal judge held Feb. 28 that claims arising from a bank’s breach of duties as trustee of a reinsurance trust for an insolvent insurer are timely (Accident Insurance Company Inc. v. U.S. Bank National Association, et al., No. 16-2621, D. S.C.).
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February 21, 2019
Insolvent Insurer’s Liquidator Requests Court Approval Of Notices Of Determinations
HARRISBURG, Pa. — A Pennsylvania court was asked by the liquidator for Reliance Insurance Co. on Feb. 5 to approve final omnibus notices of determinations (NODs) that have been issued to guaranty associations (GAs) to resolve all the claims submitted by those individual GAs (In re: Reliance Insurance Co. in liquidation, No. 1 REL 2001, Pa. Cmwlth.).
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February 19, 2019
Banks Seek Judgment On Damages In Insurers’ Special Deputy Receiver’s Lawsuit
ST. LOUIS — Two banks assert in a Feb. 14 reply brief that a Missouri federal court should grant their motion for partial judgment on claims for certain alleged categories of damages in a dispute filed by a special deputy receiver and state insurance guaranty associations regarding allegations over the mishandling of insolvent funeral insurers’ funds (Jo Ann Howard & Associates P.C., et al. v. J. Douglas Cassity, et al., No. 09-01252, E.D. Mo.).
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February 15, 2019
Driver Sues New Jersey Insurance Guaranty Association For Injuries
PATERSON, N.J. — A New Jersey resident and the New Jersey Property-Liability Insurance Guaranty Association (NJPLIGA) were named as defendants in a personal injury lawsuit filed Feb. 13 in state court (Maria Rodriguez v. Shamira Tirado, et al., No. PAS-L-000485-19, N.J. Super., Passaic Co.).
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February 14, 2019
Justice Appoints Referee To Hear Disputes In Insurer’s Liquidation
WHITE PLAINS, N.Y. — A New York justice on Feb. 5 appointed a referee to hear disputes regarding claim determinations made in the liquidation proceeding of Touchstone Health HMO Inc. and approved the procedure for the liquidator’s adjudication of claims (In the matter of the liquidation of Touchstone Health HMO Inc., No. 54964/2018, N.Y. Sup., Westchester Co.).
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February 14, 2019
Hedge Fund Liquidators: Specific Allegations Exist In Fraud, Conspiracy Case
NEW YORK — In their fraud and conspiracy lawsuit, liquidators for two hedge funds tell a New York federal court in a Feb. 11 brief that they have asserted specific allegations to withstand motions to dismiss their amended complaint claiming that funds with a net asset value of nearly $1 billion turned out not only to be insolvent but also to have liabilities between $400 million and $800 million (Martin Trott, et al. v. Platinum Management [NY] LLC, et al., No. 18-10936, S.D. N.Y.).
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February 14, 2019
Mediation Ordered In Breach Of Contract Case Over Trust’s Role For Insolvent Insurer
COLUMBIA, S.C. — In a breach of contract and breach of fiduciary duty lawsuit against a bank sued for its role as trustee of a reinsurance trust for an insolvent insurer, a federal magistrate judge in South Carolina on Feb. 12 ordered all parties to conduct mediation (Accident Insurance Company Inc. v. U.S. Bank National Association, et al., No. 16-2621, D. S.C.).
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February 14, 2019
Justice Closes Ancillary Receivership For Guarantee Insurance Company
NEW YORK — A New York justice on Feb. 1 closed the ancillary receivership proceeding for Guarantee Insurance Co. (In the matter of the ancillary receivership of Guarantee Insurance Co., No. 453158/2017, N.Y. Sup., New York Co.).
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February 13, 2019
Insurer Responds To Home Liquidator’s Settlement With Religious Organization
CONCORD, N.H. — Regarding a mutually insured religious organization, an insurer tells a New Hampshire trial court in a Feb. 11 response that a $2.5 million settlement agreement reached between the insured and the liquidator of The Home Insurance Co. does not affect any contribution or subrogation the insurer may have in the future against the estate (In the matter of the liquidation of The Home Insurance Co., No. 03-E-0106, N.H. Super., Merrimack Co.).
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February 11, 2019
Virgin Islands Insurance Commissioner Seeks Ancillary Receivership
ST. THOMAS, Virgin Islands — A Virgin Islands insurance commissioner in a Feb. 6 petition asks a Virgin Islands federal court to appoint him and successors as Real Legacy Assurance Company Inc.’s ancillary receiver (Tregenza A. Roach v. Real Legacy Assurance Company Inc., No. 19-00007, D. Virgin Islands).
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February 07, 2019
Investors Seek Dismissal Of Fraud, Conspiracy Case From Hedge Fund Liquidators
NEW YORK — In 11 motions filed Feb. 4, parties argue under a theory of impermissible group pleading that a New York federal court should dismiss a fraud and conspiracy lawsuit filed by liquidators for two hedge funds over allegations that the funds with a net asset value of nearly $1 billion turned out not only to be insolvent but also to have liabilities between $400 million and $800 million (Martin Trott, et al. v. Platinum Management [NY] LLC, et al., No. 18-10936, S.D. N.Y.).
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February 07, 2019
ACA Insurers Seek High Court Review Of Risk-Corridor Cases
WASHINGTON, D.C. — Congress’ promise to cover Patient Protection and Affordable Care Act (ACA) risk-corridor liabilities only to revoke that duty in vaguely worded appropriations riders is a “bait-and-switch” tactic that leaves the government completely unaccountable, a quartet of insurers tell the U.S. Supreme Court in a trio of Feb. 4 petitions (Land of Lincoln Mutual Health Insurance Co. v. United States, No. N/A, Moda Health Plan Inc. v. United States, No. 18-1028, Blue Cross and Blue Shield of North Carolina v. United States, No. 17-2154, Maine Community Health Options v. United States, No. 18-1023, U.S. Sup.).