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Mealey's Insurance Insolvency

  • February 21, 2025

    Magistrate Restricts Access In Asbestos Coverage Dispute Involving Insolvent Insurer

    OMAHA, Neb. — A Nebraska federal magistrate judge granted a motion filed by National Indemnity Co. (NICO) to restrict access to documents containing expert reports in its suit seeking to enforce obligations by defendants it calls reinsurers — one of which is now insolvent — for liability NICO incurred related to claims for asbestos exposure.

  • February 21, 2025

    Status Report Filed In 1st Circuit By Puerto Rico Insurance Commissioner

    BOSTON — In status report filed in the First Circuit U.S. Court of Appeals, the Puerto Rico insurance commissioner and the auxiliary rehabilitator of a health insurer informed the court that a court hearing a case under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act is currently considering an objection filed by Puerto Rico’s Financial Oversight and Management Board opposing requests by two plaintiffs in related cases before a Puerto Rico federal court asking the Title III court to allow their cases to proceed to trial.

  • February 21, 2025

    Legal Counsel Seeks Over $126K For Fees And Expenses In Insurer Bankruptcy Case

    WILMINGTON, Del. — Legal counsel for a trustee for estates in an insolvent insurer’s Chapter 7 bankruptcy proceeding filed an application in Delaware federal bankruptcy court seeking compensation and reimbursement of expenses for a total of $126,307.16.

  • February 20, 2025

    Guaranty Association Agrees To Inspection Of Homeowner’s Wind Damaged Property

    BARTOW, Fla. — The Florida Insurance Guaranty Association (FIGA) filed a notice in a Florida state court agreeing to an inspection of property purportedly damaged in a windstorm in a homeowner’s suit asserting that FIGA, as the alleged statutory obligor for his now-insolvent homeowners insurer, breached its obligations under state law by failing to adequately compensate the insured for his loss.

  • February 19, 2025

    Insurer, Captive Reinsurer Prevail In Appeal Of South Carolina Regulator’s Order

    COLUMBIA, S.C. — Saying that “the evidence relied upon by the Director was unreliable, unsupported, and contrary to law,” a South Carolina Administrative Law Court judge permanently enjoined the South Carolina Department of Insurance (SCDOI) from enforcing an order “until a final decision is issued by the [SDCOI] in this matter”; the order directed Atlantic Coast Life Insurance Co. (ACL) and ACL’s captive reinsurer, Southern Atlantic Re Inc. (SAR), to stop writing new business by the end of 2024, among other things.

  • February 19, 2025

    Loan Repayment Case Stayed In Dispute Between Malta-Based Company And Insurer

    RALEIGH, N.C. —  A North Carolina federal judge granted a Malta-based company’s unopposed motion to stay a breach of contract case a now-insolvent insurer filed against it for the company’s alleged failure to make payments on a loan.

  • February 19, 2025

    After Voluntary Dismissal By Insurers’ Receiver, Judge Tosses $300M Ponzi Case

    MIAMI — After a receiver for insolvent insurers and related entities filed a notice of voluntary dismissal, a Florida federal judge issued a docket-only entry dismissing without prejudice Wells Fargo in the receiver’s suit alleging that Wells Fargo aided and abetted fraud in a “massive” Ponzi scheme purportedly orchestrated by owners of insurers, some of which are now in receivership, resulting in elderly investor victims losing more than $300 million after scheme operators sold them promissory notes secured by collateral in stranger-oriented life insurance policies (STOLIs).

  • February 18, 2025

    Additional Briefing Sought In Row Over Guaranty Association Repayment Obligation

    RALEIGH, N.C. — A North Carolina federal judge issued an order permitting the parties to file additional briefs in the North Carolina Insurance Guaranty Association’s (NCIGA) suit against the U.S. Department of Health and Human Services (DHHS), its secretary and the Centers for Medicare and Medicaid Services (CMS), seeking a determination that the NCIGA is not a primary plan required to reimburse DHHS and CMS under the federal Medicare Secondary Payer (MSP) statute.

  • February 13, 2025

    Discovery Facilitator Named In Delaware Suit Over Alleged Asset Dissipation

    WILMINGTON, Del. — A discovery facilitator has been appointed in a Delaware Chancery Court case concerning the “Agera transactions” — a complex asset-swap arrangement that the plaintiffs allege resulted in the “dissipation of at least $250 million.”

  • February 10, 2025

    Summary Judgment Reversed In Medicaid Negligence Suit Involving Insolvency Pool

    ATLANTA  — A Georgia appellate court reversed a lower court ruling granting summary judgment to a state broker of Georgia Medicaid transportation services in a wheelchair user’s  negligence suit over a purported injury during a trip provided by the broker’s independent contractor, whose insurer was insolvent, finding that genuine issues of fact remain regarding an agency relationship between the broker and contractor.

  • February 10, 2025

    Florida Panel Upholds Ruling Denying Attorney Fees In Auto Claim Coverage Dispute

    WEST PALM BEACH, Fla.  — Without providing explanation, a Florida appellate court affirmed a lower court’s ruling denying an insured’s motion for attorney fees in an auto insurance coverage dispute where the lower court found that the insured was not entitled to attorney fees because the Florida Insurance Guaranty Association (FIGA) “did not affirmatively deny the claim.”

  • January 30, 2025

    Judge Appoints Special Master In Insurance Magnate’s Money Laundering Case

    CHARLOTTE, N.C. — A North Carolina federal judge appointed a special master to assist with restitution that is part of a plea agreement entered into by insurance magnate Greg Lindberg, the former owner of now-insolvent insurers, who pleaded guilty to money laundering conspiracy and conspiracy regarding his $2 billion scheme to defraud insurers and policyholders by funneling money through his extensive global network of insurance companies and was convicted on retrial in a related criminal proceeding.

  • January 28, 2025

    Pari Passu Advocated By Policyholders Seeking To Intervene In Rehabilitation

    HARTFORD, Conn. — A second motion to intervene has been filed in the Connecticut state court rehabilitation proceeding of life insurer PHL Variable Insurance Co. and the subsidiaries that reinsure its liabilities, this one by two policyholders who say their policies are worth millions and want a moratorium order to be modified to pay death benefits on a pari passu basis instead of capping such benefits at $300,000.

  • January 28, 2025

    3rd Circuit Stays Underwriting Association Mandate Pending Certiorari Filing

    PHILADELPHIA — Pending filing of a petition for writ of certiorari in the U.S. Supreme Court, the Third Circuit U.S. Court of Appeals without explanation granted an unopposed motion to stay the mandate of its ruling that the state-created Pennsylvania Professional Liability Joint Underwriting Association (JUA), which provides coverage to health care providers including those previously insured by insurers in liquidation, is a public entity rather than a private one.

  • January 27, 2025

    Magistrate Denies Insurer’s Bids To Compel Discovery In Asbestos Coverage Dispute

    BUFFALO, N.Y. — A federal magistrate judge in a single order denied an insurer’s motions to compel discovery in four similar suits against insurers filed by the estates of people who died purportedly from asbestos exposure, seeking payment of judgments entered against an asbestos mine, finding that though discovery of negotiations resulting in a funding agreement is related to the agreement’s impact, the disclosure of the agreement “is sufficient.”

  • January 24, 2025

    4th Circuit Denies Insurer’s Bid For Review Of Black Lung Benefits Award Ruling

    RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals denied an insurer and its insured coal mine operator’s petition for review of a U.S. Department of Labor benefits review board ruling upholding an administrative law judge’s order requiring the operator to pay black lung benefits to its former employee, finding that Virginia law does not require its state-created insurance guaranty funds “to assume liability” for the miner’s more-recent employer or its insolvent insurer.

  • January 17, 2025

    Bid To Pursue Resolution With Vesttoo Affiliate In Israel Draws Opposition

    WILMINGTON, Del. — Israeli investors’ request for a Delaware federal bankruptcy court to grant relief from the injunction in the Chapter 11 liquidation of Vesttoo Ltd. and dozens of affiliates so they can pursue arbitration and/or liquidation proceedings in Israel has drawn objections that the investors argue should be rejected.

  • January 17, 2025

    Partial Dismissal Recommended In $300M Ponzi Fraud Case Involving Bank, Insurers

    MIAMI — A Florida federal magistrate judge issued a report and recommendation advising granting in part and denying in part motions to dismiss filed by Wells Fargo in a receivership case and a related putative class action alleging that Wells Fargo aided and abetted fraud in a “massive” Ponzi scheme purportedly orchestrated by owners of insurers, some of which are now in receivership, resulting in elderly investor victims losing more than $300 million after scheme operators sold them promissory notes secured by collateral in stranger-oriented life insurance policies (STOLIs).

  • January 16, 2025

    South Carolina Orders Insurer, Captive Reinsurer To Stop Writing New Business

    COLUMBIA, S.C. — Documents that South Carolina regulators have made publicly available show that Atlantic Coast Life Insurance Co. (ACL) and ACL’s captive reinsurer Southern Atlantic Re Inc. (SAR) were confidentially put into administrative supervision in April 2024 and then ordered to stop writing new business by the end of 2024.

  • January 15, 2025

    Citing Settlement, Judge Dismisses Hurricane Coverage Row With Insolvent Insurer

    LAFAYETTE, La. — After being advised that the parties have settled, a Louisiana federal judge dismissed a homeowner’s suit against his now-insolvent insurer for its purported failure to cover damages caused by Hurricanes Laura and Delta.

  • January 09, 2025

    Partial Dismissal Granted In Suit Over Financing With Now-Insolvent Insurer

    NEW YORK — A New York state court justice granted in part an investment placement agent’s and related entity’s motion to dismiss in an aiding and abetting fraud and negligent misrepresentation suit over the agent’s alleged failure to disclose the creditworthiness of certain entities in a financing transaction, including a now-liquidated insurer, finding in part that the lender plaintiffs failed to sufficiently state a claim for negligent misrepresentation.

  • January 09, 2025

    Vice Chancellor Addresses Privilege Claims In DUFTA Case Discovery Dispute

    WILMINGTON, Del. — A Delaware Chancery Court vice chancellor ordered plaintiffs to produce some documents they had argued were privileged and to pay for additional depositions in a putative class suit over an alleged scheme to strip capital from an insurance subsidiary on which many policyholders depend for long-term care (LTC) disability benefits.

  • January 08, 2025

    Liquidation, Injunction Orders Entered For 2 Special Purpose Captive Insurers

    WILMINGTON, Del. — A Delaware Chancery Court vice chancellor on Jan. 7 entered liquidation and injunction orders regarding two special purpose captive insurance companies — American Casualty Reinsurance of Delaware LLC (ACRE) and American Equine Insurance Company LLC (AEIC) — that the Delaware Department of Insurance seized in June 2024 under confidential orders.

  • January 08, 2025

    Pennsylvania Appellate Judge Discharges Insurance Commissioner As Liquidator

    HARRISBURG, Pa. — Without providing explanation, a Pennsylvania appellate court judge issued an order discharging the Pennsylvania insurance commissioner as the statutory liquidator of Penn Treaty Network America Insurance Co.

  • January 07, 2025

    Magnate Files Answer In $1B Insurance Fraud Case, Says No RICO Enterprise Found

    RALEIGH, N.C. — Insurance magnate Greg Lindberg and his co-defendant asset management companies filed their answer to an amended complaint in a North Carolina federal court in a suit accusing them and other parties of Racketeer Influenced and Corrupt Organizations Act (RICO) violations related to their purported participation in a $1 billion scheme to defraud now-insolvent insurers once owned by Lindberg.