Mealey's Insurance Insolvency
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May 15, 2023
Guaranty Association Must Defend Insured Drywaller In Underlying Row, Insurer Says
JACKSONVILLE, Fla. — A New Mexico commercial general liability insurer defending its insured drywall company in a construction defects action filed a contribution suit in a Florida federal court against the Florida Insurance Guaranty Association (FIGA), as successor in interest to a now-insolvent Florida commercial liability insurer of the drywaller, asserting that FIGA is liable for defense costs and indemnity in the underlying action.
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May 15, 2023
Judge Remands Asbestos Exposure Case Against Insolvent Insurer, Others
NEW ORLEANS — A Louisiana federal judge granted a decedent’s daughter’s motion to remand in an asbestos exposure case filed against a shipyard, related parties and a now-insolvent insurer, finding that because the federal claims have been dismissed or settled, case law and common law support remand.
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May 11, 2023
Judgment Issued For Guaranty Association In Late Filed Asbestos Exposure Case
NEW ORLEANS — A Louisiana federal judge granted the Louisiana Insurance Guaranty Association’s (LIGA) summary judgment motion in a suit filed against it and a shipyard where a man says his exposure to asbestos there caused his mesothelioma, finding that the claim is not a covered claim as to LIGA because it was filed after the statutory claims filing period.
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May 11, 2023
On Settlement Report, Judge Orders Dismissal Of Duties Spat Over Reinsurance Trust
RICHMOND, Va. — Saying she was advised that the lawsuit concerning a reinsurance trust for an insolvent insurer “has been settled,” a South Carolina federal judge ordered dismissal of the case, which was on remand from the Fourth Circuit U.S. Court of Appeals.
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May 10, 2023
Pretrial Attachment Of Assets Granted In Suit Over Tax-Sharing Agreement
RALEIGH, N.C. — A North Carolina federal judge on May 9 granted an emergency motion by plaintiffs in a dispute over a tax-sharing agreement (TSA) for pretrial attachment of the defendant’s assets.
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May 09, 2023
Citing Liquidation Order, Reinsurer Seeks Stay Of Claims In Liabilities Row
OMAHA, Neb. — Arguing that two abstention doctrines apply because of Pennsylvania liquidation proceedings, a reinsurer moved in Nebraska federal court to stay claims against it in a suit over the $157.2 million settlement National Indemnity Co. (NICO) reached with Montana regarding alleged asbestos exposures.
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May 08, 2023
Hurricane Coverage Suit Adding Guaranty Association Remanded For No Diversity
NEW ORLEANS — A Louisiana federal judge remanded to state court an insured’s hurricane coverage suit against a now-insolvent insurer and Louisiana Guaranty Association (LIGA), finding that adding LIGA in an amended complaint defeated diversity jurisdiction.
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May 05, 2023
Insurance Guaranty Association Intervention Denied In Hurricane Coverage Suit
LAKE CHARLES, La. — A Louisiana federal magistrate judge denied the Louisiana Insurance Guaranty Association’s (LIGA’s) motion to intervene in a homeowner’s suit against a now-insolvent insurer seeking coverage for hurricane damage to her home, finding that LIGA “is not an intervenor of right” because LIGA’s statutory rights as an intervenor did not apply until after the insurer was deemed insolvent, which occurred after the suit was filed.
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May 05, 2023
Receiver Who Sought Rehab Has Concluded That Reinsurer Should Be Liquidated Instead
WILMINGTON, Del. — The receiver for Scottish Re (U.S.) Inc. in Rehabilitation (SRUS) has concluded that SRUS should be liquidated instead of rehabilitated, saying in a letter to the Delaware Court of Chancery that he intends to move for an order of liquidation in about 45 days.
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May 01, 2023
Diocese Seeks Liquidation Of Insurer, Reinsurer, Cites ‘Looting’ By Management
WILMINGTON, Del. — The Roman Catholic Diocese of Brooklyn, N.Y., seeks a writ of mandamus from the Delaware Superior Court to compel the Delaware insurance commissioner to start liquidation proceedings against Arrowood Indemnity Co., asserting that the commissioner is aware of the insolvency and must start liquidation and remove the current management, which purportedly “has been intentionally looting the company.”
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April 28, 2023
Joint Status Report Filed In Risk-Corridor Dispute Involving Insolvent Insurers
WASHINGTON, D.C — The federal government and a subclass member filed a joint status report in liquidated insurers’ suit seeking a declaratory judgment that the government owes insurers millions of dollars under the Patient Protection and Affordable Care Act (ACA) risk-corridor program, with the parties not disputing the amounts owed but the type of judgment to be entered against the subclass member.
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April 26, 2023
$1.4M Remains In Insolvent Insurer’s Fund Per U.S. Virgin Islands Commissioner
ST. THOMAS, Virgin Islands — The Virgin Islands commissioner of insurance filed an 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 an insolvent insurer and no new payments have been made to claimants or policyholders since the previous status report issued in January.
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April 26, 2023
Judge Orders Hearing In Chapter 11 Proceedings Of Defunct Workers’ Comp Insurer
WILMINGTON, Del. — A Delaware bankruptcy judge issued an order scheduling an omnibus hearing in the Chapter 11 bankruptcy proceeding of Patriot National Inc., a workers’ compensation insurance firm for which a litigation trust is now acting as successor-in-interest.
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April 25, 2023
Denial Of Guaranty Association Intervention Bid Affirmed In Hurricane Coverage Row
LAKE CHARLES, La. — A Louisiana federal judge affirmed a magistrate judge’s denial of the Louisiana Insurance Guaranty Association’s (LIGA) motion to intervene as a statutory obliger in a bad faith insurance coverage suit filed against a homeowners insurer over purported hurricane damages, finding that the magistrate correctly determined that LIGA failed to explain its interest in the suit.
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April 25, 2023
Liquidators To Appeal Denial Of Bid To Enforce Stay As To N.C. Judgment
NEW YORK — In an April 24 notice of appeal, the joint provisional liquidators (JPLs) of Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) and other debtors said they are challenging a New York federal bankruptcy judge’s ruling that a North Carolina court’s judgment and related activities do not violate an automatic stay entered under the U.S. Bankruptcy Code.
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April 24, 2023
Trustee Advises Federal Judge Of Sale Closure In $24M Insurance Policies Sale
FORT LAUDERDALE, Fla. — A liquidating trustee provided a Florida federal judge with notice of closing on the $24 million sale of trust policies related to a company in receivership after the judge approved the sale and a settlement between the trust and trust investment manager Acheron Capital Ltd.
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April 20, 2023
No Intervention For Guaranty Association Absent Interest In Hurricane Loss Dispute
LAKE CHARLES, La. — A Louisiana federal judge rescinded an earlier order and denied the Louisiana Guaranty Association’s (LIGA) motion to intervene after ordering supplemental briefing in a homeowners insurance coverage suit against the homeowners’ now-insolvent insurer over hurricane damage, finding that LIGA has failed to show what interest it is seeking to protect by participating in the current litigation.
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April 17, 2023
Reinsurer’s Receiver Tells Delaware Court Of Negotiations With ‘Major Counterparty’
WILMINGTON, Del. — In an April 14 update to the Delaware Court of Chancery on addressing the impact of higher-than-expected mortality due to the COVID-19 pandemic and other causes on a proposed rehabilitation plan, the receiver for Scottish Re (U.S.) Inc. in Rehabilitation (SRUS) reports pursuing negotiations with “a major counterparty."
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April 14, 2023
Bankruptcy Judge Stays Adversary Proceeding After Ruling In Main Case
NEW YORK — After denying a motion in a bankruptcy case to enforce a stay, a New York federal bankruptcy judge stayed an adversary proceeding for declaratory judgment that four North Carolina insurers filed against Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) and other debtors.
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April 14, 2023
Fla. Receiver Seeks Approval To Pay Consultants In Property Insurer’s Liquidation
TALLAHASSEE, Fla.— The Florida Department of Financial Services (DFS) moved a Florida state court to approve compensation of outside contractors to assist with the receivership of United Property and Casualty Insurance Co. (UPCIC), a Florida company ordered into liquidation, asserting that while DFS has the authority under Florida law to hire outside contractors, their compensation must be approved by the court.
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April 12, 2023
Bankruptcy Judge Denies Liquidators’ Bid To Enforce Stay As To N.C. Judgment
NEW YORK — Ruling against the joint provisional liquidators (JPLs) of Bermuda insurer and reinsurer PB Life and Annuity Co. Ltd. (PBLA) and other debtors, a New York federal bankruptcy judge said a North Carolina court’s judgment and related activities do not violate an automatic stay entered under the U.S. Bankruptcy Code.
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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.
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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.”
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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.
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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.