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

Mealey's Insurance Insolvency

March 12, 2024
Discovery Orders Granted, Appeal Filed In Vesttoo Chapter 11 Bankruptcy Cases

WILMINGTON, Del. — A notice of appeal has been filed concerning the confirmation of a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates, and a Delaware federal bankruptcy judge on March 11 granted four unopposed motions for leave to conduct discovery against banking entities.
March 11, 2024
Justice Stays, Severs Claims Against Insolvent Insurer In Asbestos Coverage Row

CENTRAL ISLIP, N.Y. — A New York state court justice granted a stay and severed proceedings as to the insured of an insolvent insurer in an estate’s asbestos liability case filed against numerous parties involved in the manufacture and distribution of asbestos-containing products, finding that the claims against the other defendants may go forward without causing undue burden to the estate of the decedent.
March 11, 2024
Judge Amends Consent Decree Order In Case Over Alleged Counterfeit Policies

LOUISVILLE, Ky. — In a March 8 amended ruling entering a consent decree in a sprawling suit over allegations of fraud, trademark counterfeiting and trademark infringement involving captive reinsurance programs, a Kentucky federal judge said he “inadvertently omitted the names of two parties.”
March 11, 2024
Class Certification Bid Draws Opposition In DUFTA Case Involving Insurer

WILMINGTON, Del. — Arguing in part that proposed class representatives “appear to be as unqualified as” one rejected in Gordon v. Sonar Capital Mgmt. LLC, defendants in a suit over an alleged scheme to strip capital from an insurance subsidiary on which many policyholders depend for long-term care (LTC) disability benefits urged the Delaware Chancery Court to deny certification of the proposed class.
March 07, 2024
Panel Affirms Liquidation Order, Says Insurers’ Holding Company Lacked Standing

RALEIGH, N.C. — The North Carolina Court of Appeals affirmed lower court orders placing insolvent insurers into liquidation and denying an intervenor holding company’s motion for a continuance, finding that the lower court did not err when issuing the orders but that because the intervenor lacked standing to intervene, the orders must be modified to show that the intervenor is not a proper party.
March 05, 2024
Liability Insurer Says 10th Circuit Should Affirm Order Barring Coverage In MDL

DENVER — A liability insurer argued in its answer brief in the 10th Circuit U.S. Court of Appeals that the appellate court should affirm a district court’s ruling that it does not owe a duty to indemnify the appellant health insurer in an underlying multidistrict litigation (MDL) antitrust dispute involving an excess errors and omissions (E&O) policy issued by a now-insolvent insurer.
February 29, 2024
U.S. Bankruptcy Judge Approves Liquidation Plan In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — After the latest in a string of recent hearings, a Delaware federal bankruptcy judge on Feb. 29 confirmed a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates, also approving four settlements — one with a caveat and one with conditions precedent.
February 28, 2024
Settlements Sought, Liquidation Proposal Updated In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — After putting forth several proposed settlements for approval in a Delaware federal bankruptcy court following mediation, the Official Committee of Unsecured Creditors on Feb. 28 filed the latest of its recent amendments to its proposed Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of Vesttoo affiliates.
February 27, 2024
4th Circuit Tosses Appeal Of Asbestos Coverage Row With S.C. Guaranty Association

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on Feb. 26 dismissed an insurer’s appeal of a district court’s order remanding to state court a receiver’s asbestos coverage suit against insurers and the South Carolina Property and Casualty Insurance Guaranty Association, finding that the court does not have jurisdiction over the remand order.
February 23, 2024
Reverse-Preemption Ruling Concerning Adversary Case Is Upheld On Appeal

NEW YORK — Agreeing with a bankruptcy judge’s determination that reverse-preemption under the McCarran–Ferguson Act (MFA) applies, a New York federal judge on Feb. 22 upheld the partial stay of an adversary proceeding in an expansive dispute involving a reinsurer.
February 23, 2024
Pa. High Court Tosses State Law Question Of Joint Underwriting Association Status

PHILADELPHIA — The Pennsylvania Supreme Court dismissed a previously granted petition for certification of a state law question regarding the private or public entity status of the Pennsylvania Professional Liability Joint Underwriting Association (JUA), which provides coverage to health care providers, including those previously insured by insurers in liquidation, finding that the high court “improvidently granted this certification request” because the question “is principally one of federal law.”
February 23, 2024
Firm Deadline Sought For Procedures Proposal In Reinsurer’s Liquidation

WILMINGTON, Del. — Fifty-four cedents and retrocessionares have asked the Delaware Chancery Court to require the receiver for life and health reinsurer Scottish Re (U.S.) Inc. (SRUS) “to move for approval of a proof of claim process and related liquidation procedures” by March 4.
February 22, 2024
Liability Insurer Seeks Extension To Respond In Dispute With Health Insurer

DENVER — A liability insurer moved for an extension to file an answer brief in a health insurer’s appeal to the 10th Circuit U.S. Court of Appeals of a district court’s ruling that the liability insurer does not owe a duty to indemnify the health insurer in an underlying multidistrict litigation antitrust dispute involving an excess errors and omissions (E&O) policy issued by a now-insolvent insurer.
February 22, 2024
Property Owner Sues Guaranty Association, Says Insolvent Insurer Didn’t Cover Loss

SANFORD, Fla. — A property owner on Feb. 16 filed a complaint in a Florida state court against the Florida Insurance Guaranty Association (FIGA), asserting that it has been statutorily “activated” to pay outstanding claims for a now-insolvent property insurer that was previously ordered into liquidation.
February 21, 2024
Life Insurer Files Third-Party Complaint Against Assignee, Seeks Reimbursement

CINCINNATI — A life insurer that was sued in Ohio federal court for breach of contract by the liquidating trustee for a viatical settlement provider filed its answer and a third-party complaint against an assignee of a life insurance policy, seeking reimbursement for any amount the insurer is required to pay the trustee.
February 21, 2024
North Carolina Guaranty Association Seeks Ruling That It’s Not MSP Primary Plan

RALEIGH, N.C. — The North Carolina Insurance Guaranty Association (NCIGA) sued the U.S. the Department of Health and Human Services (HHS), its secretary and the Centers for Medicare and Medicaid Services (CMS) in a North Carolina federal court, seeking a determination that the NCIGA is not a primary plan under the federal Medicare Secondary Payer (MSP) statute and therefore not obligated to reimburse CMS regarding a workers’ compensation claim involving an insolvent insurer.
February 16, 2024
Bonding Company’s Objection Overruled In Row With Insolvent Insurer’s Liquidator

HARRISBURG, Pa. — A Pennsylvania appellate court on Feb. 15 overruled an insurance bonding company’s objection in a suit filed against it by the Pennsylvania insurance commissioner, as liquidator for an insolvent insurer, seeking to void the insurer’s $3.02 million wire transfer to the bonding company, finding that the objection must be overruled because the transfer is voidable as a preferential transfer.
February 15, 2024
Liquidation Order Leads To Permanent Stay For 1 Defendant In Coverage Row

NEWARK, N.J. — All claims against one defendant in a suit in New Jersey federal court over environmental investigation and remediation have been permanently stayed because of a liquidation and injunction order issued by the Delaware Court of Chancery.
February 15, 2024
Disputes Over Liquidation Proposal Sent To Mediation In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — A Delaware federal bankruptcy judge has referred matters pertaining to a proposed Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of its affiliates to mediation.
February 14, 2024
Consent Decree Entered Under 1 Dismissal In Case Over Alleged Counterfeit Policies

LOUISVILLE, Ky. — A variety of claims and parties have been dismissed under agreements in a sprawling suit over allegations of fraud, trademark counterfeiting and trademark infringement involving captive reinsurance programs, with a Kentucky federal court permanently enjoining two defendants “from future infringement of Plaintiffs’ trademarks.”
February 14, 2024
Claims Against LIGA Tossed In Asbestos Coverage Suit Involving Insolvent Insurer

NEW ORLEANS — A Louisiana federal judge granted summary judgment to the Louisiana Insurance Guaranty Association (LIGA) and dismissed an asbestos liability suit against it, finding that the claims for asbestos-related lung cancer against LIGA, as the statutory obligor for a now-insolvent insurer, are not covered claims.
February 12, 2024
Condo Association Says It Settled Hurricane Coverage Row With Guaranty Association

SANFORD, Fla. — A condominium association notified a Florida state court of its settlement with the Florida Insurance Guaranty Association (FIGA), the receiver for the now-insolvent commercial property insurer that the condo association sued seeking coverage for damage caused by Hurricane Irma.
February 08, 2024
Dismissal Granted In Asbestos Liability Case Involving Guaranty Association

NEW ORLEANS — A Louisiana federal judge on Feb. 7 granted a motion for voluntary dismissal of a man’s claim that he was exposed to asbestos through contact with a specific worker at a shipyard but keeping other claims regarding exposure against the shipyard, related parties, multiple insurers and the Louisiana Insurance Guaranty Association (LIGA).
February 06, 2024
Hail Damage Suit Against Guaranty Association Tossed For Lack Of Jurisdiction

BATON ROUGE, La. — A Louisiana federal judge dismissed a breach of contract and bad faith suit regarding failure to compensate a homeowner for hailstorm damage against a now-insolvent insurer and the Louisiana Insurance Guaranty Association (LIGA), finding that the court lacks subject matter jurisdiction because both LIGA and the homeowner are citizens of Louisiana.
February 01, 2024
Accounting Denied As To Disputed $185 Million Attorney Fees In Insurers’ ACA Row

WASHINGTON, D.C. — A U.S. Court of Federal Claims judge denied in part objecting class members’ motion for an accounting of a vacated $185 million attorney fee award in suits filed by insurers, some of which are insolvent, over risk-corridor payments under the Patient Protection and Affordable Care Act (ACA), finding that because the court has not yet considered a renewed fee request, the accounting is unnecessary at this time.