Mealey's Insurance Insolvency : Mealey's : Legal News & Analysis

Mealey's Insurance Insolvency

April 12, 2023
Homeowners Sue Insolvent Insurer, Guaranty Association Over Hurricane Ida Damage

NEW ORLEANS — Louisiana homeowners sued an insolvent insurer and the Louisiana Guaranty Association (LIGA) as the purported guarantor for the insurer, asserting claims for breach of contract and breach of the duty of good faith and fair dealing related to the insurer’s alleged failure to compensate them for their damage from Hurricane Ida.
April 06, 2023
Hurricane Damage Suit Against Insolvent Insurer Remanded For Lack Of Diversity

NEW ORLEANS — A Louisiana federal judge granted insureds’ motion for leave to file an amended complaint and ordered the case to be remanded to state court in their breach of contract suit alleging that a now-insolvent insurer failed to provide adequate payment for alleged property damage related to Hurricane Ida, finding that adding the Louisiana Insurance Guaranty Association (LIGA) as the successor-in-interest to the insurer defeats “diversity of citizenship between the parties.”
April 06, 2023
Judge Stays Hurricane Damage Insurance Coverage Row Due To Insurer’s Liquidation

NEW ORLEANS — A Louisiana federal judge issued a stay in an insurance coverage dispute after an insured purportedly submitted proof of loss from Hurricane Ida to his now-insolvent homeowners insurer, finding that Louisiana law requires proceedings involving an insolvent insurer to be stayed for six months.
April 05, 2023
Reinsurer In Asbestos Coverage Liabilities Row Notifies Court Of Liquidation Order

OMAHA, Neb. — Parties in a federal suit in Nebraska against reinsurers over the $157.2 million settlement that National Indemnity Co. (NICO) reached with Montana regarding alleged asbestos exposures have notified the court of developments in two other proceedings, including an order of liquidation entered against a defendant.
April 03, 2023
Reinsurer’s Receiver Is Still Assessing Mortality Info Impact On Rehab Proposal

WILMINGTON, Del. — Assessing the impact of higher-than-expected mortality due to the COVID-19 pandemic and other causes on a proposed rehabilitation plan is expected to take an additional 14 days, the receiver for Scottish Re (U.S.) Inc. in Rehabilitation (SRUS) tells the Delaware Court of Chancery in a March 31 letter.
April 03, 2023
All Claims Against Guaranty Association Dismissed In Shipyard Asbestos Exposure Suit

NEW ORLEANS — A Louisiana federal judge on March 31 granted a dismissal motion filed by the Louisiana Insurance Guaranty Association (LIGA) as the alleged statutory obligor for policies issued by Lamorak Insurance Co., a now-insolvent insurer, in a man’s suit for injuries purportedly related to asbestos exposure while he worked at the shipyard, finding that all claims against LIGA are barred by the Longshore and Harbor Workers’ Compensation Act (LHWCA).
March 29, 2023
Judgment Granted To D&O Insurer In Coverage Dispute Involving Insolvent Insurer

KANSAS CITY, Kan. — A Kansas federal judge granted a liability insurer’s cross-motion for judgment on the pleadings in its suit involving an insolvent insurer and seeking a declaratory judgment that the directors and officers (D&O) policy issued to its insured does not provide coverage for claims in an underlying multidistrict litigation antitrust dispute, finding that the prior litigation and managed care activities policy exclusions preclude coverage.
March 22, 2023
Magistrate Issues Stay In Hurricane Coverage Suit Against Insolvent Insurer

BATON ROUGE, La. — A Louisiana federal magistrate judge issued a stay in a coverage dispute filed by a homeowner against his insurer after Hurricane Ida caused purported property damage, finding that a stay is required pursuant to the terms of a consent order appointing the Florida Department of Financial Services (DFS) as receiver for the insurer in liquidation and by Louisiana law requiring a six-month stay in proceedings involving an insolvent insurer.
March 22, 2023
Final Dismissal Issued In Wind Damage Suit Against Florida Guaranty Association

PENSACOLA, Fla. — A Florida state court issued a final dismissal order in a homeowners’ suit over wind damage coverage against the Florida Insurance Guaranty Association (FIGA) as statutory receiver for an insolvent insurer after the homeowners filed a notice of voluntary dismissal.
March 21, 2023
La. Panel Affirms Intervention Denial In Class Suit Against Guaranty Association

NEW ORLEANS — A Louisiana appellate court affirmed a trial court’s decision that residents of a housing development built on the site of a former landfill in New Orleans could not intervene in a class action over failure to disclose the presence of toxic substances, including arsenic, mercury and lead in the landfill’s soil, filed against the city of New Orleans, a school board, the Housing Authority of New Orleans (HANO), its insurers and the Louisiana Insurance Guaranty Association (LIGA), finding that the residents lack a right to intervene because “the requisite element of connexity does not exist.”
March 16, 2023
Liquidators’ Motion For Enforcement Of Stay Opposed In Federal Bankruptcy Court

NEW YORK — Arguing in part that judicial estoppel and the law of the case doctrine require denial, insurers filed opposition in New York federal bankruptcy court to a motion in which the joint provisional liquidators (JPLs) of Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) and other debtors seek enforcement of a stay.
March 15, 2023
Georgia Panel Rules, Says Assignment Of Liability To Insolvent Insurer Not Void

ATLANTA — A Georgia appeals court on March 14 affirmed in part a lower court’s grant of summary judgment for the recipient of structured settlement payments who sued the insurer making the payments from an annuity, agreeing that the insurer is not absolved of liability under the settlement agreement.
March 15, 2023
Judge Grants Motion To Sever In Asbestos Coverage Suit Involving Insolvent Insurer

NEW ORLEANS — A Louisiana federal judge granted a consent motion to sever and stay claims against purported insurers of a now-bankrupt company that is a defendant in a woman’s asbestos liability suit against a shipyard and others, including an insolvent insurer.
March 13, 2023
Rehabilitator Counterclaims In Independent Auditor’s Declaratory Judgment Action

MINNEAPOLIS — In an outside auditor’s Minnesota federal case seeking declaratory judgment “to clear the cloud of threatened litigation” and denying that it caused or contributed to a run-off insurer’s statutory rehabilitation, the rehabilitator has asserted counterclaims for professional negligence/accounting malpractice, breach of fiduciary duty and breach of contract.
March 10, 2023
New York Justice Approves Adjudication Procedures For Insolvent Auto Insurer

NEW YORK — A New York state justice issued an order approving the application of the liquidator of Global Liberty Insurance Company of New York for adjudication procedures in connection with claims under policies covered by security funds, as well as those not covered by security funds.
March 09, 2023
Judge Dismisses Guaranty Association In Suit Claiming Shipyard Asbestos Exposure

NEW ORLEANS — A Louisiana federal judge on March 8 granted an ex parte dismissal motion filed by the Louisiana Insurance Guaranty Association (LIGA) and a man suing for injuries purportedly related to asbestos exposure while he worked at a shipyard, dismissing the claims against LIGA as a statutory obligor for Lamorak Insurance Co., a now-insolvent insurer, but reserving the man’s right to pursue claims against others, including LIGA as related to other insurers.
March 08, 2023
Recommendation Issued Barring D&O Coverage, Excluding Under Insolvency Exclusion

CENTRAL ISLIP, N.Y. — A New York federal magistrate judge issued a report recommending that a specialty insurer’s cross-motion for judgment on the pleadings be granted in a Medicare Advantage (MA) plan insurer’s suit seeking a judgment that the specialty insurer is obligated to provide a defense and reimburse the plan insurer for losses in a suit filed against it, finding that coverage is barred under one policy’s related claims provision and by both policies’ insolvency exclusions.
March 06, 2023
Judge Adopts Report, Grants Trustee’s Request For $24M Insurance Policies Sale

FORT LAUDERDALE, Fla. — A Florida federal judge on March 3 approved a liquidating trustee’s $24 million sale of trust policies and a settlement between the trust and the trust investment manager Acheron Capital Ltd.
March 06, 2023
Judge Denies Final Judgment To Guaranty Association In Asbestos Coverage Dispute

NEW ORLEANS — After granting summary judgment to an insurance guaranty association as an alleged statutory obligor of a now-insolvent insurer in an asbestos coverage dispute, a Louisiana federal judge denied the association’s request for final judgment, finding that while the summary judgment issue “has been decided,” the claims against the association are still related to the case’s outstanding issues.
March 03, 2023
Guaranty Association’s Final Judgment Request Denied In Asbestos Coverage Suit

NEW ORLEANS — A Louisiana federal judge on March 2 denied an insurance guaranty association’s motion for final judgment after it was granted summary judgment in an asbestos coverage suit filed against it as the alleged obligor for policies issued by a now insolvent insurer, finding that there is “no danger of hardship” for the association to continue to “monitor the docket” when final judgments regarding summary judgments are “meant to be the exception.”
March 01, 2023
Judge Rules On Magistrate’s Report, Remands Asbestos Insurance Coverage Row

COLUMBIA, S.C.— A South Carolina federal judge adopted in part a magistrate judge’s report and recommendation regarding fraudulent joinder of the South Carolina Property and Casualty Insurance Guaranty Association, remanding to state court an asbestos coverage suit filed by the receiver of a now-insolvent company against insurers, finding that there was “no clear error concerning” the portion of the report determining that the guaranty association was fraudulently joined and that diversity jurisdiction exists.
March 01, 2023
Reinsurance Commutation Figures In Franchisee’s Negligence, Fraud Action

JACKSON, Miss. — Alleging negligence, fraud and breach of fiduciary duties in connection with “a corporate insurance and risk management program promoted, created, and put in place by Defendants for Domino’s Pizza franchisees,” a franchisee sued a corporation, a limited liability company and the two individuals who are members of the latter in a Mississippi federal court.
February 27, 2023
Grand Jury Indicts Owner Of N.C. Insurance Cos. Over Alleged Fraud Scheme

CHARLOTTE, N.C. — Alleging a fraud scheme in effect “at least” from roughly 2016 through 2019, the U.S. Department of Justice on Feb. 24 announced a grand jury indictment filed the previous day in North Carolina federal court against an individual who controlled multiple insurance companies, Greg E. Lindberg.
February 22, 2023
Mold Assessment Company Files Breach Of Contract Suit Against FIGA

DELAND, Fla. — A mold assessment company, acting as an assignee of insureds, filed a breach of contract suit in a Florida state court against the Florida Insurance Guaranty Association (FIGA), a servicer of claims against a homeowners insurer ordered into receivership.
February 21, 2023
4th Circuit Affirms Judgment For Insolvent Insurer In Breach Of Contract Suit

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals affirmed a district court’s grant of summary judgment to an insurer in rehabilitation in its breach of contract suit against a wealth management firm for violating a loan agreement, finding that the wealth management firm failed to provide “triable issues” about whether purported offers of alternative financing could have prevented the breach.