Mealey's Insurance Insolvency
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August 15, 2023
Judge Stays Wind Damage Case Against Homeowners Insurer, Cites Receivership Filing
McALLEN, Texas — A Texas federal judge on Aug. 14 stayed a breach of contract case against a homeowners insurer related to its purported failure to adequately cover a claim for wind damages, finding that a stay is merited because the Florida Department of Financial Services’ (DFS) “filing of the petition for receivership operates as an automatic stay under Florida law.”
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August 15, 2023
Under Stipulation, Reinsurer May Intervene In California Liquidation Proceeding
LOS ANGELES — Following a stipulation by a liquidator and a reinsurer who had a dispute playing out in two jurisdictions, a California judge has ruled that the reinsurer may intervene in the state court action.
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August 15, 2023
Appellees To Court: Uphold Adversary Proceeding Ruling Under McCarran–Ferguson
NEW YORK — Urging a New York federal court to uphold a bankruptcy judge’s order partially staying an adversary proceeding in an expansive dispute involving a reinsurer, four entities collectively referred to as the NC Insurance Cos. argue in their appellees’ brief that the adversary proceeding is reverse-preempted under the McCarran–Ferguson Act (MFA).
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August 11, 2023
Judge Compels Arbitration, Grants Dismissal In Fraud Suit Involving Reinsurance
GREENSBORO, N.C. — Compelling arbitration and granting dismissal without prejudice in a suit over an alleged scheme involving reinsurance, a North Carolina federal judge on Aug. 10 said in part that the plaintiff’s consent to arbitrate all claims means “there is no reason for this case to remain on this Court’s docket.”
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August 09, 2023
Justice Seals Communications With Liquidated Insurer, But Not Asbestos Settlement
NEW YORK — A New York justice found no good reason to seal or redact the amount a liquidator settled asbestos claims for, but said communications among the liquidator, counsel and the referee who oversaw the settlements included discussion of litigation strategy and would be sealed.
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August 04, 2023
Nevada Judge Grants Receiver’s Request To Liquidate Health Insurer
LAS VEGAS — A Nevada state court judge granted the state insurance commissioner’s motion to place a health insurer into liquidation, finding that the commissioner, acting as receiver, established grounds for liquidation pursuant to state law.
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August 04, 2023
Wisconsin Judge OKs Rehab Plan For Reinsurer Of Town Mutual Insurers
MADISON, Wis. — A Wisconsin judge has approved a rehabilitation plan for Wisconsin Reinsurance Corp. and its subsidiary 1st Auto & Casualty Insurance Co. that will, among other things, “re-mutualize” Wisconsin Re, establish a reinsurance pool for town mutual insurers that Wisconsin Re would administer and narrow 1st Auto’s focus.
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August 03, 2023
Florida Guaranty Association Dismisses $186,000 Suit Against Window Cleaners
CLEARWATER, Fla. — Florida Insurance Guaranty Association (FIGA), as successor in interest to the Florida Department of Financial Services, voluntarily dismissed its suit in Florida state court seeking damages of $186,570.68 from a window cleaning company that was allegedly negligent when cleaning windows at condominiums insured by a now-insolvent insurer.
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August 03, 2023
Assignee Of Insolvent Colorado Health Insurer Seeks Liquidation In Delaware Court
WILMINGTON, Del. — A limited liability company, acting as assignee for the benefit of creditors of Friday Health Plans Inc. (FHP) and Friday Health Plans Management Services Co. Inc. (FHP MSC) petitioned a Delaware state court for assignment for the benefit of creditors, seeking, among other things, to liquidate the assets of the FHP and FHP MSC.
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August 01, 2023
Judge Reverses Dismissal Of Adversary Proceeding Challenging Transfers
NEW YORK — Applying the “conceivable effect” test and finding “related to” jurisdiction, a New York federal judge on July 31 reversed dismissal of a Puerto Rico insurance company’s adversary proceeding against entities it alleged received fraudulent conveyances from a reinsurer that is in liquidation.
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July 26, 2023
Delaware Court Enters Liquidation, Injunction Order For Life And Health Reinsurer
WILMINGTON, Del. — A Delaware Chancery Court vice chancellor has granted a receiver’s motion for entry of a liquidation and injunction order pertaining to life and health reinsurer Scottish Re (U.S.) Inc. (SRUS); among other things, the order gives the receiver discretion to “reject any executory contract to which SRUS is a party.”
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July 26, 2023
Judgment Appealed To 10th Circuit In Coverage Row Involving Liquidated Insurer
DENVER — A health care insurer with an excess errors and omissions (E&O) policy issued by a now-insolvent insurer appealed to the 10th Circuit U.S. Court of Appeals a district court’s order granting judgment for a liability insurer seeking a declaration that a directors and officers (D&O) policy issued to the health insurer does not provide coverage for claims in an underlying multidistrict litigation antitrust dispute.
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July 26, 2023
Magistrate Denies Request To Add Guaranty Association In Hurricane Coverage Suit
LAKE CHARLES, La. — A Louisiana federal magistrate judge denied homeowners’ motion to amend to add the Louisiana Guaranty Association (LIGA) as a defendant in a suit against their now-insolvent insurer over failure to adequately compensate them for hurricane-related losses, finding that amendment would be “futile” because it would require dismissing the suit “for lack of subject matter jurisdiction.”
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July 25, 2023
Asbestos Firms, Insolvent Insurer Group Duel In Settlement Appeal
NEW ORLEANS — An appeal by two asbestos law firms of a Louisiana federal bankruptcy judge’s approval of a $1 million settlement between the Chapter 7 trustee for a bankrupt insulation supplier and the Louisiana Insurance Guaranty Association (LIGA) should be tossed because the firms’ arguments against dismissal “focus primarily on rehashing their arguments before the Bankruptcy Court,” the trustee and LIGA argue in a reply brief in federal court.
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July 20, 2023
Rehab Plan Proposed For Reinsurer Of Wisconsin Town Mutual Insurers
MADISON, Wis. — Following issuance of a rehabilitation order, Wisconsin’s commissioner of Insurance has asked a Wisconsin court to approve a rehabilitation plan for Wisconsin Reinsurance Corp. and its subsidiary 1st Auto & Casualty Insurance Co.
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July 20, 2023
Challenge To Denial Of Stay Enforcement Bid Is Dismissed On Stipulation
NEW YORK — One appeal has been dropped in a sprawling dispute involving the joint provisional liquidators (JPLs) of Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) and other debtors, with a New York federal judge granting the parties’ stipulation of dismissal with prejudice.
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July 19, 2023
Judge Denies Motions To Amend In Hurricane Coverage Suit Against Insolvent Insurer
LAFAYETTE, La. — A Louisiana federal judge denied a homeowner’s motions to amend and file a supplemental complaint in his suit against a now-insolvent insurer for failure to cover damages purportedly caused by Hurricanes Laura and Delta, finding that adding the Louisiana Insurance Guaranty Association (LIGA) “would be futile” because it would destroy diversity jurisdiction and require dismissal.
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July 19, 2023
Judge Grants Homeowners’ Dismissal In Hurricane Damage Row With Insolvent Insurer
NEW ORLEANS — A Louisiana federal judge granted homeowners’ motion to dismiss their claims for breach of contract and breach of the duty of good faith and fair dealing against an insolvent insurer and the Louisiana Guaranty Association (LIGA) as the purported guarantor for the insurer, related to the insurer’s alleged failure to compensate them for damages caused by Hurricane Ida.
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July 19, 2023
Michigan High Court Extends Deadline In Coverage Row Involving Insolvent Insurer
LANSING, Mich. — The Michigan Supreme Court issued an order giving an insurer additional time to file a supplemental brief in its appeal of a decision finding that an uninsured driver involved in an auto accident was covered under her brother’s policy after a passenger injured in the accident received no-fault benefits from an insurer later declared insolvent.
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July 18, 2023
Settlement Notice Issued In Water Damage Coverage Row Involving Insolvent Insurer
MIAMI — An insurer on July 17 provided a Florida court with notice that it served a homeowner with a proposed settlement in the homeowner’s breach of contract suit against the insurer and an insolvent insurer, alleging failure to cover all water-related damages.
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July 17, 2023
Judge Allows Adding Guaranty Association And Remands In Hurricane Coverage Dispute
NEW ORLEANS — A Louisiana federal judge on July 14 granted a homeowner’s motion to add the Louisiana Guaranty Association (LIGA) as a defendant and remanded to state court her suit against a now-insolvent insurer for its breach of contract and bad faith failure to compensate her for purported damage caused by Hurricane Ida, finding that the purpose of the amendment “is the inclusion of the proper defendant, rather than the exclusion of federal jurisdiction.”
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July 17, 2023
Receiver Asks Delaware Court to Liquidate Life And Health Reinsurer
WILMINGTON, Del. — As previously signaled, the receiver for Scottish Re (U.S.) Inc. in Rehabilitation (SRUS) on July 14 moved in the Delaware Court of Chancery for entry of a liquidation and injunction order declaring, in part, that the life and health reinsurer “is impaired, insolvent, and in an unsound condition.”
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July 14, 2023
Bifurcated Settlement Granted For 1 Defendant In SEC Suit Over Alleged Fraud
DURHAM, N.C. — A North Carolina federal judge has approved a bifurcated settlement that the U.S. Securities and Exchange Commission negotiated with one of three defendants in a civil suit over a former investment advisory firm’s alleged “series of fraudulent and improper schemes” that defrauded clients of more than $75 million.
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July 13, 2023
Window Cleaners Name Mediation Attendees In Guaranty Association’s $186,000 Suit
CLEARWATER, Fla. — A window cleaning company filed in a Florida state court a certification of authority naming attendees at a mediation conference in a suit filed against the company by the Florida Insurance Guaranty Association (FIGA), as successor in interest to the Florida Department of Financial Services, alleging that it negligently performed cleaning services on windows at condominiums insured by a now-insolvent insurer, resulting in damages of more than $186,570.68.
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July 12, 2023
Panel Affirms Denial To Add Punitive Damages In Suit Against Now-Insolvent Insurer
DAYTONA BEACH, Fla. — A Florida appellate court affirmed a lower court’s order denying a homeowner’s request to amend his complaint to add punitive damages in his breach of the duty of good faith and fair dealing suit against a now-insolvent insurer, finding that the homeowner failed to satisfy punitive damages requirements under Florida law regarding the “general business practice” related to the insurer’s alleged lack of standards for investigating claims.