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

Mealey's Insurance Insolvency

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.
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.
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.
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.
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.
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.”
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.
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.”
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.
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.
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.
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.
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.
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.
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.
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.”
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.”
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.
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.
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.
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.