Mealey's Reinsurance
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January 10, 2024
Ruling A Microcaptive Arrangement Not Insurance, Tax Court Upholds Penalties
WASHINGTON, D.C. — A microcaptive arrangement was “not insurance for federal income tax purposes,” and the three shareholders of a California corporation are liable for accuracy-related penalties totaling 20% of the amount the corporation understated income tax from 2012 to 2014 as a result, a U.S. Tax Court judge ruled.
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January 05, 2024
Merck, Insurers Ask N.J. High Court To Dismiss Cyberattack Coverage Dispute
TRENTON, N.J. — Merck & Co. Inc. and certain insurers filed stipulations in the New Jersey Supreme Court seeking dismissal of the insurers from Merck’s lawsuit seeking coverage for its losses arising from a June 2017 malware/cyberattack.
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January 04, 2024
1 Defendant Files Status Report In Insurer’s Suit Over Asbestos Liabilities Row
OMAHA, Neb. — Evaluating proof of claims in separate liquidation proceedings “is expected to take several years,” a defendant told a Nebraska federal court in its latest status report in a suit over the $157.2 million settlement National Indemnity Co. (NICO) reached with Montana regarding alleged asbestos exposures.
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January 03, 2024
Exclusion Bids Regarding Claims, Outside Counsel Disputed In Reinsurance Row
LOS ANGELES — In California federal court filings, parties in a reinsurance billings suit over a variety of claims are disputing attempts by one defendant to exclude evidence regarding claims submitted to other reinsurers and opinions of outside counsel.
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January 03, 2024
Company Seeks To Compel Insurers To Produce Documents In AFFF Litigation
CHARLESTON, S.C. — A company that makes firefighting products filed a motion on Jan. 2 in South Carolina federal court seeking to compel insurance companies to produce documents in a coverage dispute related to injuries from the firefighting substance aqueous film forming foam (AFFF) in the multidistrict litigation for AFFF, arguing that the insurers have refused to produce basic categories of documents that are directly related to the issues in dispute and are “plainly subject to discovery.” The company contends that the insurers’ objections to discovery requests are not valid, especially considering that the insurers are “seeking to escape up to $1 billion in coverage.”
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January 02, 2024
Exclusion, Partial Summary Judgment Bids Disputed In Microcaptive Insurance Suit
WEST PALM BEACH, Fla. — A tax attorney and the federal government have signaled agreement to resolve the attorney’s claim for disclosure of tax information even as they pursue summary judgment and expert exclusion motions in the case involving a penalty related to microcaptive insurance companies in a Florida federal court.
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January 02, 2024
Defendants Must Pay $72.5M In Oil Seizure Row Involving Insurrection Clause
NEW YORK — After a New York federal jury found for plaintiff CITGO Petroleum Corp. on three of four issues in a suit stemming from the February 2020 seizure of crude oil at a Venezuelan port and involving a marine cargo reinsurance policy, judgment of $54,235,187.24 plus $18,321,092.02 in prejudgment interest was entered against the defendants.
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January 02, 2024
Committee Gets OK For Vote On Liquidation Plan In Vesttoo Chapter 11 Cases
WILMINGTON, Del. — A Delaware federal bankruptcy judge who is allowing the Official Committee of Unsecured Creditors to put its Chapter 11 plan of liquidation for Vesttoo Ltd. and 48 affiliates to a vote also granted its motions for leave to conduct discovery against two banking organizations.
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January 02, 2024
Alleging Unpaid Claims, Iowa-Based Insurers Sue Foreign Reinsurer
DES MOINES, Iowa — Asserting a breach of contract claim and a bad faith claim, two members of the GuideOne family of insurance companies sued a China-based reinsurer for what they allege are its refusals to pay some valid claims for reinsurance reimbursement.
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January 02, 2024
Collapsed Hedge Fund’s Co-Founder Withdraws Appeal Over Offset Ruling
NEW YORK — A co-founder of the collapsed hedge fund Platinum Partners who argued that application of New York offset law should reduce his liability to zero has withdrawn his Second Circuit U.S. Court of Appeals challenge to a ruling that left him liable for just under $2.8 million.
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December 28, 2023
Settlement Conference Set In Reinsurers’ Suit Over Fatal Aircraft Crash
TOLEDO, Ohio — A suit that four reinsurers filed against an overhaul and repair company over a November 2019 aircraft crash in the Democratic Republic of Congo that resulted in “numerous deaths” has been referred to an Ohio federal magistrate judge for a settlement conference.
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December 21, 2023
Preliminary Injunction Bid Fails In Dispute That Arose Under Fronting Arrangement
NEW ORLEANS — An insurer has established a substantial likelihood of success on certain aspects of some claims against a managing general agent (MGA) but is not entitled to a preliminary injunction, a Louisiana federal judge has ruled in the case arising from a fronting arrangement.
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December 21, 2023
Reinsurer Wins Summary Judgment In Securities Suit Involving Loss Ratios
CAMDEN, N.J. — Citing findings including evidence of “a complex actuarial process to set loss reserves,” a New Jersey federal judge granted summary judgment to a reinsurer and some of its former executives after finding that shareholders used a “falsity-by-omission” theory of liability in alleging that the defendants violated federal securities laws.
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December 21, 2023
Jury Awards More Than $49M In Damages Relating To Insurrection Clause
NEW YORK — A New York federal jury found for plaintiff CITGO Petroleum Corp. on three of four issues in a breach of contract case involving a marine cargo reinsurance policy, awarding damages of more than $49.3 million for claims stemming from the seizure of crude oil at a Venezuelan port in February 2020.
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December 19, 2023
N.C. High Court Grants Review Of Fraud Judgment In Insolvent Insurers’ Suit
RALEIGH, N.C. — The North Carolina Supreme Court granted discretionary review to the purchaser of now-insolvent insurers and his affiliated companies’ regarding an appellate court’s decision affirming a judgment for fraud in a breach of contract suit.
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December 18, 2023
Global Settlement Resolving Reinsurance Collateral Row Wins Approval
ST. LOUIS — A global settlement agreement involving limited liability companies that owned and operated dozens of Jack in the Box restaurants under franchise agreements has been approved and related requests granted in a federal bankruptcy court in Missouri.
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December 19, 2023
Unsecured Creditors Update Proposed Liquidation Plan In Vesttoo Chapter 11 Cases
WILMINGTON, Del. — The Official Committee of Unsecured Creditors on Dec. 18 filed an amended proposed combined disclosure statement and Chapter 11 plan of liquidation for the jointly administered cases of Vesttoo Ltd. and 48 affiliates in Delaware federal bankruptcy court.
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December 18, 2023
Liquidation Order Prompts Letters, Order In Environmental Claims Row
NEWARK, N.J. — After all parties in a suit over environmental investigation and remediation briefly weighed in on the implications of a different court’s liquidation order pertaining to one defendant, a New Jersey federal magistrate judge delayed a status conference and granted that defendant “leave to file a motion for relief relating to the Liquidation Order.”
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December 18, 2023
Cooperation Noted In Probation Bid In Alleged Reinsurance Bribery Case
MIAMI — Stressing his cooperation with the U.S. government and arguing in part that “while [he] paid bribes to obtain the business, [he] delivered top-notch services,” a defendant who pleaded guilty to a scheme to bribe Ecuadorian insurance officials urged a Florida federal court to impose a probationary sentence.
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December 15, 2023
Vice Chancellor Issues Final Order In Hedge Fund’s Suit Over Nonpublic Info
WILMINGTON, Del. — A vice chancellor of the Delaware Chancery Court has issued a final order specifying the circumstances under which a public holding company would be required to produce certain nonpublic information to a hedge fund regarding a captive reinsurer that issued dividends totaling approximately $1.2 billion.
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December 15, 2023
2nd Circuit: Government’s Acquittal Challenges Can Resume After Sentencing
BROOKLYN, N.Y. — Consolidated interlocutory appeals the U.S. government filed over a ruling that acquitted two former hedge fund executives of their convictions for a count of conspiracy to commit wire fraud have been remanded to a New York federal court to allow sentencing and final judgment on their remaining convictions.
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December 14, 2023
Israeli Law Raised In Feedback On Liquidation Plan For Vesttoo And Its Affiliates
WILMINGTON, Del. — In two Dec. 13 filings citing Israeli law and other issues, Vesttoo Ltd. and its affiliated debtors and a venture capital organization and individual that report significant related interests urge a Delaware federal bankruptcy court not to approve a Chapter 11 plan of liquidation and related arrangements as currently proposed.
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December 14, 2023
Panel Issues Ruling In $5M Enforcement Action Against Owner Of Insolvent Insurers
RALEIGH, N.C. — A North Carolina appeals court vacated a lower court injunction enjoining the owner of insolvent insurers from withdrawing without the North Carolina Insurance commissioner’s consent more than $5,000 from any entity controlled by the owner in an enforcement action for a $524,009,051.26 judgment, finding that the lower court lacked jurisdiction to issue the injunction.
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December 13, 2023
Captive Cell Reinsurer Is Allowed To Intervene In Row Between Insurer And MGA
NEW ORLEANS — After a Louisiana federal magistrate judge found that a captive cell reinsurer “is entitled to intervene as of right” in an insurer’s case against a managing general agent (MGA), the reinsurer filed an intervenor complaint for breach of contract and declaratory judgment alleging that it is due most premium income purportedly held by the MGA.
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December 13, 2023
Insurers Accuse Aon Of Negligence, Other Claims In Suit Over Vesttoo Dealings
NEW YORK — A group of four insurers has sued Aon PLC (Aon) and Aon Insurance Managers (Bermuda) Ltd. in New York state court, asserting eight claims including constructive fraud and negligence in connection with the events that preceded the bankruptcy of Vesttoo Ltd.