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

Mealey's Insurance Insolvency

July 10, 2023
South Dakota High Court: Trust Not Liable For Guaranty Association Assessments

PIERRE, S.D. — The South Dakota Supreme Court reversed a lower court decision determining that the South Dakota Life and Health Guaranty Association had the authority to assess the South Dakota Bankers Benefit Plan Trust after its membership with the guaranty association ended, finding that because the assessments occurred after the legislature eliminated the requirement for the trust’s membership in the association, the trust was not obligated to pay the assessments to cover an insolvent insurer’s obligations.
July 07, 2023
Insurance Commissioner Reports Balance Over $1.4M In Insolvent Insurer’s Fund

ST. THOMAS, Virgin Islands — The Virgin Islands commissioner of insurance filed a court-ordered quarterly accounting and status report with a U.S. Virgin Islands federal court showing that more than $1.4 million remains in a fund set up for payment of claims to an insolvent insurer’s policyholders.
July 05, 2023
New York Justice Compels Arbitration In Row Over Reinsurance Receivables

NEW YORK — Saying that selecting an arbitrator constitutes participating in arbitration and that a “liquidator case is inapplicable to this action where the Liquidator is not party to the arbitration,” a New York justice compelled arbitration in a dispute over reinsurance receivables.
July 03, 2023
Dismissal Bid Is Terminated In Appeal Over Partial Stay Of Adversary Proceeding

NEW YORK — Citing a ruling by a North Carolina court, movants successfully sought termination of their bid to dismiss an appeal in New York federal court that seeks reversal of a bankruptcy judge’s order partially staying an adversary proceeding filed by the joint provisional liquidators (JPLs) of Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) and other debtors.
June 27, 2023
Receiver Updates Delaware Court On Plans To Seek Liquidation Of Reinsurer

WILMINGTON, Del. — The receiver for Scottish Re (U.S.) Inc. in Rehabilitation (SRUS) intends to seek entry of a liquidation and injunction order “on or about July 12,” he told the Delaware Court of Chancery in a successful bid to enlarge the word limit.
June 22, 2023
North Carolina Panel Affirms Enforceability Of MOU Involving Insolvent Insurers

RALEIGH, N.C. — A North Carolina appellate court affirmed in part a lower court’s decision that a memorandum of understanding (MOU) was enforceable in a breach of contract and fraud suit filed by insolvent insurers against their purchaser and his affiliated companies, finding that the lower court correctly relied on evidence to affirm the fraud judgment.
June 21, 2023
Kansas Federal Judge Asks For Status Report In Insolvent Insurer’s Liquidation

TOPEKA, Kan. — A Kansas federal judge ordered the Kansas insurance commissioner, as liquidator of an insolvent medical malpractice insurer, the insolvent insurer’s parent company and others to file another status report advising the court on the liquidation proceedings if the liquidator has not moved to lift the stay in the case by the end of July.
June 21, 2023
Pennsylvania Supreme Court Affirms Approval Of Rehabilitation Plan For SHIP

PHILADELPHIA — In a one-page per curium order, the Pennsylvania Supreme Court on June 20 affirmed an appellate court’s approval of a plan of rehabilitation for the Senior Health Insurance Company of Pennsylvania (SHIP), a Pennsylvania life and health insurance company.
June 20, 2023
Condo Association Moves To Substitute FIGA For Insolvent Insurer In Coverage Row

BRADENTON, Fla. — A condominium association that sued its now-insolvent insurer for breach of contract in a Florida court for refusal to pay all alleged storm-related losses moved to substitute the Florida Insurance Guaranty Association (FIGA) for the insurer, asserting that FIGA is “obligated for the covered claim” because it arose before the insurer’s adjudication of insolvency.
June 19, 2023
Judge Finds No Duty To Indemnify In MDL Coverage Row Involving Liquidated Insurer

KANSAS CITY, Kan. — A Kansas federal judge granted a liability insurer’s 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 there is no “potential. . . to owe a duty to indemnify . . . in the MDL action.”
June 19, 2023
Guaranty Association Seeks $186,000 In Damages From Window Cleaning Company

CLEARWATER, Fla. — The Florida Insurance Guaranty Association (FIGA), as successor in interest to the Florida Department of Financial Services, filed in a Florida court a notice of mediation authority, authorizing a claims adjustor to settle for it in a suit filed against a window cleaning service, alleging that the window cleaners negligently performed cleaning services on exterior glass at condominiums insured by a now-insolvent insurer, resulting in damages of more than $186,570.68.
June 15, 2023
Judge Grants Transfer In Breach Of Contract Dispute Over Insolvent Annuity Insurer

PHILADELPHIA — A Pennsylvania federal judge granted an auto insurer’s motion to transfer a breach of contract suit filed against it by an annuitant after her structured settlement annuity payments related to injuries sustained in an auto accident were reduced when the annuity insurer was placed into liquidation, finding that Pennsylvania courts lack jurisdiction because the annuitant’s car accident in New Jersey and the resulting settlement issued by a New Jersey court “do not relate to any insurance policy issued” by the auto insurer in Pennsylvania.
June 15, 2023
Third-Party Complaint Is Filed In Suit Involving Reinsurance Commutation

JACKSON, Miss. — Defendants in a lawsuit involving what the plaintiff alleges was “a corporate insurance and risk management program promoted, created, and put in place by Defendants for Domino’s Pizza franchisees” have filed a third-party complaint against Domino’s Pizza LLC and related entities in a Mississippi federal court.
June 14, 2023
Florida Judge Orders Receiver For Insolvent Insurer To Continue Subrogation Suit

TALLAHASSEE, Fla. — A Florida judge issued an order granting a motion filed by the Florida Department of Financial Services as receiver for an insolvent insurer to continue a subrogation action in another state court despite the objections of a general contractor sued in the other state court action.
June 13, 2023
Bifurcated Settlement Proposed For 1 Defendant In SEC Suit Over Alleged Fraud

DURHAM, N.C. — The U.S. Securities and Exchange Commission on June 12 asked a North Carolina federal court to approve a bifurcated settlement it 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.
June 12, 2023
Insurers Seek Dismissal Of Appeal Over Partial Stay Of Adversary Proceeding

NEW YORK — Arguing lack of subject matter jurisdiction, appellees asked a New York federal court to dismiss an appeal seeking to overturn a New York federal bankruptcy judge’s order partially staying an adversary proceeding filed by the joint provisional liquidators (JPLs) of Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) and other debtors.
June 08, 2023
Magistrate Schedules Conference In D&O Policy Row Involving Insurer In Rehab

INDIANAPOLIS — An Indiana federal magistrate judge ordered an insurer in rehabilitation and primary and excess directors and officers (D&O) insurers it sued for breach of contract to appear in an upcoming telephonic conference to discuss case status.
June 08, 2023
D&O Coverage Dispute Dismissed Per Liquidator And Excess Insurer’s Stipulation

SIOUX FALLS, S.D. — Two days after a liquidator and an excess insurer filed a joint stipulation of dismissal in the liquidator’s suit seeking a declaration that coverage exists under a claims-made excess insurance policy above a directors and officers (D&O) policy with regard to a $21 million wrongful acts claim, a South Dakota federal judge issued a one-page order dismissing the case.
June 01, 2023
Mich. High Court Orders Briefing In No-Fault Suit Involving Guaranty Association

LANSING, Mich. — The Michigan Supreme Court issued an order directing an insurer, Michigan Property & Casualty Guaranty Association (MPCGA) and conservator for an injured auto-accident passenger who received no-fault benefits from an insurer later declared insolvent, to file briefs in the insurer’s appeal of a decision finding that the uninsured driver of the vehicle involved in the accident was deemed insured under her brother’s policy.
May 25, 2023
Asbestos Firms Appeal Reilly-Benton’s Settlement With Insurance Association

NEW ORLEANS — Two asbestos law firms have appealed 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), which is obligated to pay covered claims for an insolvent insurer.
May 25, 2023
Magistrate Recommends Adding Guaranty Association In Insureds’ Wind Damage Suit

LAFAYETTE, La. — Two weeks after a Louisiana federal magistrate judge issued a report recommending granting homeowners’ motion to add the Louisiana Insurance Guaranty Association (LIGA) as a defendant in a suit against their now-insolvent homeowners’ insurer, a federal judge adopted the report and recommendation, finding that the magistrate’s findings were “correct under applicable law.”
May 23, 2023
Insolvent Insurer Substituted With Guaranty Association In Hurricane Coverage Row

MONROE, La. — A Louisiana federal magistrate judge granted an insured’s request to substitute its insurer that was ordered into liquidation by a Florida state court with Louisiana Insurance Guaranty Association (LIGA) in a breach of contract suit against the insurer seeking coverage for purported hurricane damage to commercial property.
May 23, 2023
Bankruptcy Judge Approves Trustee’s Settlement Request In Debtor Insurer Case

WILMINGTON, Del. — A Delaware federal bankruptcy judge issued an order granting a trustee’s motion to approve specified settlements in an insolvent insurer’s Chapter 7 bankruptcy proceeding, finding that the settlements were “fair and equitable” and in the best interests of the estates and creditors.
May 16, 2023
Insurer Does Not Oppose 1 Of 3 Stay Requests In Asbestos Liabilities Row

OMAHA, Neb. — After three defendants cited Pennsylvania liquidation proceedings in asking a Nebraska federal court for stays in a suit over the $157.2 million settlement National Indemnity Co. (NICO) reached with Montana regarding alleged asbestos exposures, NICO says in a May 15 filing that it does not oppose a stay against one of the defendants.
May 15, 2023
Panel: Insolvent Insurer’s Reinsurer Can’t Claim Attorney Fees As General Creditor

CHICAGO — An Illinois appellate court affirmed a lower court’s determination that an insolvent insurer’s reinsurer seeking payment of a judgment for unpaid premiums, attorney fees and arbitration interest had a claim of a general creditor, rather than one for costs and expenses of administration, finding that based on statutory language and case law, the trial court correctly determined the reinsurer’s priority level.