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

Mealey's Insurance Insolvency

August 20, 2024
Hurricane Coverage Row With Guaranty Association Dismissed With Reopening Provision

NEW ORLEANS — After being advised that the parties reached a compromise agreement, a Louisiana federal judge dismissed a breach of contract suit over damages from Hurricane Ida filed against the Louisiana Insurance Guaranty Association (LIGA), which was substituted for an insolvent homeowners insurer, finding that the claims must be dismissed without prejudice only as to the right to reopen the case if the settlement is not completed within 60 days.
August 20, 2024
Judge Closes Case Seeking To Stay Arbitration On Report Of Settlement In Principle

NEW YORK — Citing a notice “that all claims asserted herein have been settled in principle,” a New York federal judge closed a case in which the successor of an assuming reinsurer sought to stay an arbitration demand.
August 15, 2024
Health Insurers, U.S. Government File Status Report In Dispute Over ACA Payments

WASHINGTON, D.C. — Health insurers and the U.S. government filed a joint status report in the U.S. Court of Federal Claims in a risk-corridor payment dispute under the Patient Protection and Affordable Care Act (ACA) that is related to a similar suit involving insurers in liquidation also seeking compensation under the ACA.
August 14, 2024
Partial Dismissal Granted In $1B RICO Insurance Fraud Scheme Involving Magnate

RALEIGH, N.C. — A North Carolina federal judge on Aug. 13 partially dismissed a Racketeer Influenced and Corrupt Organizations Act (RICO) case against defendants accused of participating in a $1 billion scheme to defraud now-insolvent insurers once owned by former insurance magnate Greg Lindberg, finding that the pleadings lack specificity as to those entities indirectly owned by Lindberg.
August 14, 2024
Chancellor Notified As To Service Of Process In Health Plan Liquidation Proceeding

WILMINGTON, Del. — The assignee for the benefits of creditors of Friday Health Plans Inc. (FHP) and Friday Health Plans Management Services Co. Inc. (FHP MSC) filed a letter in the Delaware Chancery Court notifying a vice chancellor that the assignee filed copies of an affidavit of service establishing service of process in the court’s assignment for the benefit of creditors (ABC) proceeding to liquidate the assets of FHP and FHP MSC.
August 13, 2024
Panel Tosses Bid For Stay In Receivership Action Against Owner Of Defunct Insurers

RALEIGH, N.C. — Without providing an explanation, the North Carolina Court of Appeals on Aug. 12 dismissed a motion for a temporary stay in a judgment creditor’s suit seeking the appointment of a general receiver over the assets of judgment debtor Greg E. Lindberg, a former owner of insurers now in rehabilitation who was convicted of bribing the North Carolina insurance commissioner.
August 12, 2024
After Reassignment, Judge Considers Vacating Ruling In Hurricane Coverage Dispute

LAFAYETTE, La. — After a hurricane coverage dispute was reassigned to a different Louisiana federal judge, the new judge opined about considering vacating the previous judge’s order denying a homeowner’s motions to amend and file a supplemental complaint to add the Louisiana Insurance Guaranty Association (LIGA) as a defendant as the purported statutory obligor for a now-insolvent homeowners insurer.
August 09, 2024
Panel Reverses, Tosses Claims Against Guaranty Association In Coverage Dispute

GRETNA, La. — A Louisiana appeals court reversed a lower court’s judgment denying the Louisiana Insurance Guaranty Association’s (LIGA) exception of no cause of action and dismissed homeowners’ claims in a dispute over their now-insolvent insurer’s alleged failure to cover damage from Hurricane Ida, finding that the petition fails to state a claim for statutory damages against LIGA.
August 09, 2024
Motion To Confirm $166.6M Arbitral Award Granted To Dutch Insolvency Practitioners

GREENSBORO, N.C. — A North Carolina federal judge on Aug. 8 granted a motion filed by Dutch insolvency practitioners for a Dutch insurer in liquidation to confirm a Dutch tribunal’s arbitral award and judgment, which converts from euros to $166,600,942, finding that the respondents, a former owner of insolvent insurers and his related companies, failed to establish “any grounds for a refusal to confirm the award.”
August 06, 2024
Claims Against Defendant Insurer Alleged Owed $28.9M Are Dismissed By Stipulation

OMAHA, Neb. — Claims against one of what had been four remaining defendants in a suit National Indemnity Co. (NICO) filed over a $157.2 million settlement it reached with Montana regarding alleged asbestos exposures have been dismissed with prejudice under a joint stipulation that a Nebraska federal judge granted.
August 05, 2024
Upon Notice Of Settlement, Judge Dismisses Damage Suit Against Insolvent Insurer

WEST PALM BEACH, Fla. — Three days after homeowners notified a Florida judge that they had settled their case, the judge dismissed their insurance coverage suit against an insolvent insurer and the Florida Insurance Guaranty Association (FIGA) over purported water damage from a leaking dishwasher.
August 01, 2024
Magistrate Grants Continuance For Status Conference In D&O Insurers’ Coverage Row

INDIANAPOLIS — Finding “good cause,” an Indiana federal magistrate judge granted defendant insurers’ motion for a continuance of a status conference in a suit filed against them by an insurer now in rehabilitation, seeking a declaration that specified directors and officers (D&O) policies apply to cover claims in underlying litigation.
July 29, 2024
After Forced Deal, Insurer Sues Reinsurer’s Former Parent Company In Federal Court

NEW YORK — Alleging a “$300 million fraud,” an insurer sued a holding company in New York federal court, asserting claims for securities and common-law fraud and breach of contract in connection with the insurer’s April 14 purchase of Bermuda-based reinsurer JRG Reinsurance Company Ltd.
July 26, 2024
Moratorium Granted In Rehabilitation Proceeding For Life Insurer, Subsidiaries

HARTFORD, Conn. — A Connecticut judge has granted a moratorium motion filed by the rehabilitator of a life insurer and the subsidiaries that reinsure its liabilities.
July 25, 2024
Panel Says Insolvency Pool Not Entitled To Reimbursement In Workers’ Comp Claim

ATLANTA — The Georgia Court of Appeals affirmed a lower court ruling denying the Georgia Insurers Insolvency Pool’s request for reimbursement from the solvent insurer of a business using a temporary worker from a staffing agency when the agency’s insurer became insolvent, finding that reimbursement is not appropriate because the injured worker was not a borrowed servant of the business.
July 24, 2024
CMS, HHS Seek Dismissal Of Guaranty Association’s MSP Suit Against Them

RALEIGH, N.C. — The U.S. Department of Health and Human Services (DHHS), its secretary and the Centers for Medicare and Medicaid Services (CMS) on July 23 filed a brief in North Carolina federal court supporting summary judgment and dismissal of the North Carolina Insurance Guaranty Association’s (NCIGA) suit against them, arguing that the secretary correctly found that NCIGA, as a primary plan under the federal Medicare Secondary Payer (MSP) statute, must reimburse CMS for a workers’ compensation claim involving an insolvent insurer.
July 23, 2024
Judge Issues Standing Order In Negligence Suit Against Purported Insurer’s Counsel

ATLANTA — A Georgia federal judge issued a standing order outlining case management in a negligence suit against legal counsel for a purported health insurer now in liquidation regarding the law firm’s role in aiding and abetting in an alleged scheme to entice people to purchase health plans that ultimately left “members without coverage and with devastating medical bills.”
July 22, 2024
Supreme Court Denies Rehearing In Civil Rights Suit Involving Guaranty Association

WASHINGTON, D.C — The U.S. Supreme Court on July 22 denied rehearing its previous denial of writ of certiorari filed by a man seeking review of the Fifth Circuit U.S. Court of Appeals’ ruling upholding a district court’s grant of summary judgment to an off-duty sheriff’s deputy and the Louisiana Insurance Guaranty Association (LIGA) in the man’s suit alleging that the off-duty officer used excessive force and violated the man’s civil rights when restraining him.
July 19, 2024
Insureds File Contempt Motion In Hurricane Coverage Row With Guaranty Association

LAKE CHARLES, La. — Insureds whose rental property purportedly incurred hurricane damage filed a contempt motion in Louisiana federal court against an independent adjustor for its failure to respond to a subpoena in their hurricane coverage dispute with the Louisiana Insurance Guaranty Association (LIGA), which was substituted for their now-insolvent insurer.
July 19, 2024
Receiver’s Determination Proposal In Reinsurer’s Liquidation Draws Feedback

WILMINGTON, Del. — Standard of review has emerged as an issue of contention in Delaware Chancery Court filings concerning final determination procedures in the liquidation of a life and health reinsurer, with the receiver’s proposal that an abuse of discretion standard be used for his proofs of claim recommendations drawing objections.
July 19, 2024
Discovery Deadline Unchanged In SEC Suit Against Owner Of Insurers In Receivership

WINSTON-SALEM, N.C. — A North Carolina federal magistrate judge granted in part a joint motion to extend the case schedule in the U.S. Securities and Exchange Commission’s suit alleging that an advisory services company, its former executive and its former owner, who also owned insurers now in receivership, defrauded clients of more than $75 million, allowing an extra 30 days for “additional fact discovery” but keeping the deadline for close of discovery.
July 18, 2024
Preliminary Injunction Entered In Fraud Suit Over Secured Loans

NEW YORK — A New York federal judge has entered a preliminary injunction against six defendants — including the parent company of Bermuda reinsurer 777 Re Ltd. — in a suit over fraud and racketeering allegations concerning a secured credit facility and related guaranty agreement.
July 17, 2024
Stay Granted In Hurricane Coverage Row After Guaranty Association Substitution

LAKE CHARLES, La. — A Louisiana federal judge granted a motion to stay filed by defendant Louisiana Insurance Guaranty Association (LIGA), which was substituted for a now-insolvent insurer in a hurricane coverage dispute, finding the stay appropriate due to the possibility of the restoration company that intervened in federal court intervening in a similar state court suit.
July 17, 2024
Magistrate Extends Response Filing Time For D&O Insurers In Coverage Dispute

INDIANAPOLIS — Without providing an explanation, an Indiana federal magistrate judge granted in part defendant insurers’ motion for extension to respond to a summary judgment motion filed by an insurer now in rehabilitation in its suit against them seeking a declaration that specified directors and officers (D&O) policies apply to cover claims in underlying litigation.
July 16, 2024
Judge Allows Insurer To Seal Portions Of Complaint Disputing Coverage For Diocese

SANTA ANA, Calif. — A federal judge in California on July 15 granted an insurer’s administrative motion to seal references to confidential information and documents in its declaratory judgment lawsuit disputing coverage for underlying sexual abuse lawsuits brought under the California Child Victims Act against The Roman Catholic Bishop of Orange.