Mealey's Insurance Insolvency
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July 22, 2021
Class Counsel Seeks Approval Of Attorney Fees In ACA Risk-Corridor Funds Suit
WASHINGTON, D.C. — Class counsel on July 20 moved for the U.S. Court of Federal Claims to approve their attorney fee request of 5 percent of a $45,417,643.02 judgment for a subclass that consists of one insolvent insurer in insolvent insurers’ lawsuit seeking a declaratory judgment that the U.S. government owes them millions of dollars under the Patient Protection and Affordable Care Act (ACA) risk-corridor program.
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July 21, 2021
Federal Judge Dismisses All Punitive Damages Claims Against City Of Newark
NEWARK, N.J. — A federal judge in New Jersey on July 13 granted in part and denied in part the city of Newark and its public safety director’s motion to dismiss and police officers’ motion for summary judgment in a personal injury lawsuit in which New Jersey Property-Liability Insurance Guaranty Association (NPLIGA) filed a cross-claim seeking contribution from the other defendants for damages caused by a police car chase that led to a collision.
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July 21, 2021
Brokers Move To Bifurcate Discovery In Federal Suit Over Insolvent Health Plan
CHICAGO — Insurance brokers on July 15 moved for a federal court in Illinois to bifurcate discovery in a lawsuit alleging that they 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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July 21, 2021
Magistrate Denies Investors’ Request Seeking Pre-Approval Of Trustee’s Payments
FORT LAUDERDALE, Fla. — A federal magistrate judge in Florida on July 18 denied a motion by investors in the Mutual Benefits Keep Policy Trust seeking pre-approval of any future payments that a trustee makes to himself or his firm until the trustee’s “enhanced oversight” of the trust’s servicer “can be investigated and fully understood” in a Securities Exchange Commission lawsuit alleging fraudulent selling of investment interests in life insurance policies.
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July 21, 2021
Judge Adopts Report Finding ERISA Assignment Gives Bankruptcy Trustee Standing
DALLAS — Insureds’ assignment to medical providers included both rights to benefits under the Employee Retirement Income Security Act and legal action and transferred to the trustee upon the providers’ bankruptcy, a federal judge in Texas said July 19 in adopting a magistrate judge’s report recommending denial of a motion to dismiss.
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July 21, 2021
3rd Circuit Grants Motion For Partial Remand Brought By Insurer’s Chapter 7 Trustee
PHILADELPHIA — The Third Circuit U.S Court of Appeals on July 16 granted a motion for partial remand brought by the Chapter 7 trustee for an insurer and its subsidiaries in his appeal 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, remanding to the federal court with instruction to remand to the bankruptcy court for approval of a settlement.
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July 20, 2021
9th Circuit Asked To Expedite 2nd Suit Testing Conservatorship Of Insurer
SAN FRANCISCO — An appeal contesting a federal judge in California’s dismissal of allegations that state regulators abused their authority by actions including obtaining a conservatorship against a workers’ compensation insurance carrier must be hastened or the appeal will not be completed before the conservation is lifted, the appellant told the Ninth Circuit U.S. Court of Appeals in a July 19 motion to expedite.
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July 19, 2021
Judge: Allowing Claims Against Insureds To Proceed May Result In Undue Prejudice
NEW ORLEANS — Granting an insolvent insurer’s motion to stay an asbestos liability lawsuit in its entirety, a federal judge in Louisiana held July 6 that allowing the plaintiffs to proceed against the insureds while the claims against the insolvent insurer are stayed “would frustrate the parties' ability to resolve the case as a whole and may result in undue prejudice to both plaintiff and defendant.”
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July 19, 2021
Claims All Arise From Alleged Asbestos Exposure, Judge Says In Granting Stay
NEW ORLEANS — A federal judge in Louisiana on July 15 stayed and administratively closed a shipyard worker’s lawsuit alleging that he was exposed to injurious levels of asbestos and asbestos-containing products, granting a defendant insurer’s motion to stay all proceedings following its insolvency and liquidation by the Pennsylvania Commonwealth Court.
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July 14, 2021
Insurance Commissioner Cannot Allocate Assets From Insurers’ Estates To Pay Claims
HARRISBURG, Pa. — A Pennsylvania court on July 9 denied the state’s insurance commissioner’s application seeking a declaration that she is authorized under Article V of the Insurance Department Act of 1921 to allocate assets from insolvent insurers’ estates to pay policyholder claims for benefits that exceed applicable statutory guaranty association limits and accrue more than 30 days after the policies were terminated by virtue of the insurers’ liquidation, finding “simply no statutory authority for this well-intentioned proposal.”
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July 13, 2021
No Basis To Extend Liability For Defense Costs Outside Of Policy Period, Panel Says
NEW ORLEANS — A Louisiana appeals panel on June 23 held that a lower court correctly applied the time-on-the-risk formula and that there is no basis for extending liability for defense costs outside of the insurers’ policy periods, further finding that the “Other Insurance” clauses do not apply to defense costs for an asbestos liability lawsuit in which an employer asserted that coverage is unavailable because it purchased insurance from a company that has since become insolvent.
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July 13, 2021
S.D. Supreme Court Accepts Certified Question Over Insurance Liquidation Statute
SIOUX FALLS, S.D. — The same day the South Dakota Supreme Court accepted certification of a question involving the state’s insurance liquidation statute in a lawsuit in which the liquidator of ReliaMax Surety Co. (RSC) seeks a declaration that coverage exists under a claims-made excess insurance policy above a directors and officers (D&O) policy for a $21 million wrongful acts claim, a federal judge in South Dakota on June 28 denied without prejudice the liquidator’s motion for judgment on the pleadings and alternative motion for summary judgment and the insurer’s motion for summary judgment to refile after the South Dakota high court rules on the certified question.
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July 09, 2021
Judge Grants Insolvent Insurer’s Motion To Enforce Stay Of Asbestos Liability Suit
NEW ORLEANS — A federal judge in Louisiana on May 26 granted an insolvent insurer’s motion to enforce a Pennsylvania court’s permanent stay of claims against it, staying and administratively closing an asbestos liability lawsuit brought against the insurer and its insureds.
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July 08, 2021
Judge Stays Asbestos Liability Suit After Defendant’s Insurer Declared Insolvent
NEW ORLEANS — Guided by the factors in Landis v. N. Am. Co., 299 U.S. 248, 57 S. Ct. 163, 81 L. Ed. 153 (1936), a federal judge in Louisiana on July 2 held that a brief six-month administrative stay of an entire asbestos liability lawsuit from the date a Pennsylvania court declared one of the defendant’s insurers insolvent “is necessary to ensure that litigation proceeds in an efficient and orderly fashion.”
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July 02, 2021
Court Enters Judgment For 1 Insolvent Insurer In ACA Risk-Corridor Funds Suit
WASHINGTON, D.C.— The U.S. Court of Federal Claims on June 28 entered a $45,417,643.02 judgment for a subclass that consists of one insolvent insurer in insolvent insurers’ lawsuit seeking a declaratory judgment that the U.S. government owes them millions of dollars under the Patient Protection and Affordable Care Act (ACA) risk-corridor program.
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June 28, 2021
Attorney: Judgment Was Not ‘Collectable’ Under Insolvent Insurer’s CGL Policy
LOS ANGELES — A law firm and its attorney who were sued for professional negligence tell a California appeals court in a May 26 brief that an underlying $3.5 million default judgment against a contractor was not “collectable” under a commercial general liability insurance policy even if the insurer had not gone into receivership, seeking affirmance of a lower court’s ruling in their favor arising from clients’ claims that they would have been able to collect a $2 million judgment against the insurer but for the law firm and attorney’s lack of due diligence in obtaining the default judgment against the contractor.
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June 24, 2021
Parties Stipulate To Judgment For 1 Insolvent Insurer In ACA Risk-Corridor Funds Suit
WASHINGTON, D.C. — The U.S. government and a class of insolvent insurers on June 17 filed a stipulation to enter a $45,417,643.02 judgment for a subclass that consists of one insolvent insurer in the insurers’ lawsuit seeking declaratory judgment that the government owes them millions of dollars under the Patient Protection and Affordable Care Act (ACA) risk-corridor program.
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June 23, 2021
Receiver’s Claims Are Not Sufficient To Confer Jurisdiction, Panel Says, Reverses
AUSTIN, Texas — A Texas appeals panel on June 4 held that allegations by the special deputy receiver of an insolvent insurer are not sufficient to confer jurisdiction because the appellants’ contacts with Texas are insufficient to establish specific jurisdiction, reversing a lower court’s order denying the appellants’ special appearances objecting to the Texas court’s exercise of jurisdiction over them and rendering judgment dismissing the receiver’s claims for want of jurisdiction.
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June 23, 2021
Federal Judge Grants Insolvent Insurer’s Motion To Stay Asbestos Coverage Dispute
NEW ORLEANS — A federal judge in Louisiana on June 16 granted an insolvent insurer’s motion to stay an asbestos liability dispute, finding that the factors in Landis v. N. Am. Co., weigh in favor of a six-month stay from the date of a Pennsylvania liquidation order.
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June 23, 2021
Judge: Fraudulent Transfer, Other Claims Seem To Impact Liquidation Proceeding
TOPEKA, Kan. — A federal judge in Kansas on June 21 denied a motion by the Kansas Insurance commissioner, as liquidator of an insolvent medical malpractice insurer, to remand her lawsuit alleging fraudulent transfer, breach of fiduciary duty, preferential transfer of property, professional negligence/malpractice, civil conspiracy and aiding and abetting, finding that the claims against the insolvent insurer’s parent company and other entities seem to directly impact its liquidation proceeding and staying is the appropriate action.