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Mealey's Reinsurance

  • April 18, 2025

    Captive Insurance Manager Seeks IRS Rule Injunction, Alleges Agency Overreach

    KNOXVILLE, Tenn. — Invoking both the Administrative Procedure Act (APA) and the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), a captive insurance manager filed a complaint in a federal court in Tennessee challenging an Internal Revenue Service final rule targeting small captive tax avoidance schemes, requesting that the regulation be set aside as unlawful, arbitrary and capricious and an overreach of statutory authority.

  • April 18, 2025

    Judge Won’t Reconsider Denying Attorney Fees In Jury Trial Microcaptive Case

    FORT MYERS, Fla. — Saying that the rules the corporate plaintiffs invoked don’t “provide a basis for reconsideration,” a Florida federal judge declined to revisit his denial of approximately $600,000 in attorney fees and costs in consolidated jury trial cases where they successfully challenged penalties that were imposed because the Internal Revenue Service deemed their involvement with purported microcaptive insurance companies to be promotion of abusive tax shelters.

  • April 17, 2025

    Defendant Seeks Immediate Appeal After PRT Challenge Survives Dismissal

    GREENBELT, Md. — Requesting that denial of its dismissal motion be certified for immediate interlocutory appeal in a putative class Employee Retirement Income Security Act lawsuit challenging pension risk transfers (PRTs), Lockheed Martin Corp. told a Maryland federal court that a sister court’s contradictory ruling highlights the need for review by the Fourth Circuit U.S. Court of Appeals.

  • April 17, 2025

    Tax Court Judge Denies IRS Attempt To Link Concessions To Microcaptive Penalties

    WASHINGTON, D.C. — After rejecting the Internal Revenue Service commissioner’s request for partial summary judgment to impose accuracy-related penalties in consolidated cases involving disallowed microcaptive insurance deductions, a U.S. Tax Court judge issued a mixed ruling on a motion in limine, ruling that some contested documents are privileged because they contain communications seeking federal tax advice.

  • April 17, 2025

    Plaintiffs Lack DUFTA Standing, Insurance Holding Company Says In Delaware Court

    WILMINGTON, Del. — Arguing that the plaintiffs in a putative class suit lack standing to bring a Delaware Uniform Fraudulent Transfer Act (DUFTA) claim, an insurance holding company and its affiliates seek summary judgment in the Delaware Chancery Court over an alleged scheme to strip capital from an insurance subsidiary on which many policyholders depend for long-term care (LTC) disability benefits.

  • April 17, 2025

    $195,000 Class Deal Gets Final OK In Suit Over Allegedly Fraudulent Policies

    SANTA ANA, Calif. — Noting the absence of objections and that “the average class member payment will be $467.77, and the highest payment will be $5,204.40,” a California federal judge granted final approval to a $195,000 class settlement that resolves a suit over allegedly counterfeited insurance policies sold through a captive reinsurance arrangement.

  • April 11, 2025

    Reinsurer Alleges Breach Of Transaction Agreement, $4.7M Loss In N.Y. Federal Court

    NEW YORK — A reinsurer that acquired a retirement plan recordkeeping business alleges in a suit filed in New York federal court that a financial services firm and its subsidiary unduly requested a $50 million bonus payout, breached their transaction agreement and mismanaged assets, leading to a $4.7 million shortfall.

  • April 09, 2025

    Delaware Court Grants Trio Of Captive Pool Members’ Coordinated Motions For TROs

    WILMINGTON, Del. — Three participants in a captive insurance and reinsurance pool were granted permission by a Delaware state court to coordinate on a single briefing schedule in regard to individually filed motions for temporary restraining orders (TROs) and expedited proceedings in three separate cases against the pool manager in a dispute over an alleged illegal reorganization that transferred policies from an “A” rated pool with more than $1 billion in assets to a new, unrated insurer with limited capitalization.

  • April 09, 2025

    Federal Judge: Crop Insurance Suit Doesn’t Fall Under Federal Jurisdiction

    OMAHA, Neb. — Opining that a crop insurance cooperative’s argument that a dispute over allegedly misrepresented crop insurance falls under federal jurisdiction fails to meet preemption standards, a federal judge granted a group of farmers and businesses’ request to return their complaint to state court, as their tort claims do not invoke federal questions.

  • April 09, 2025

    Dismissal Or Stay Sought In Row Involving Legionnaires’ Under Reinsurance Contract

    DETROIT — Citing an arbitration provision that is part of a reinsurance agreement, defendants in a suit over claims concerning Legionnaires’ disease moved in Michigan federal court for dismissal or, alternatively, a stay pending arbitration.

  • April 08, 2025

    Texas Federal Judge Dismisses Breach Of Contract Claim Tied To Vesttoo Collapse

    DALLAS — Finding that portions of a 2017 reinsurance authorization agreement do not support a homeowners insurer’s interpretation or allegations, a Texas federal judge granted a reinsurance broker’s motion to dismiss a breach of contract claim tied to the collapse of Vesttoo Ltd., also denying as moot a claim against a voluntarily dismissed party.

  • April 07, 2025

    Crypto Protection Plan Falsified Insurance Backing, Financial Services Firm Says

    WILMINGTON, Del. — A financial services firm and its subsidiary allege in the Delaware Court of Chancery that a group of individuals and their affiliated entities fraudulently marketed and sold a protection plan for Bitcoin mining equipment and cryptocurrency transactions, falsely claiming that it was backed by legitimate insurers, breaching contractual obligations and evading nearly $33 million in customer payouts.

  • April 03, 2025

    N.C. Judge Upholds Fiduciary Claims, Dismisses Damages In Captive Insurer Row

    LINCOLNTON, N.C. — A North Carolina judge issued a mixed dismissal order in a shareholder action against the director of a captive insurer, allowing claims for breach of fiduciary duty, constructive fraud, unjust enrichment and removal of a director to proceed while dismissing separate claims for equitable accounting and punitive damages.

  • April 03, 2025

    U.K. Reinsurer Posts $403K Bond In Asbestos Claims Reinsurance Contract Dispute

    NEW YORK — A U.K.-based reinsurer posted a $403,748.42 bond in a federal court in New York, the amount sought by the assignee of the liquidator of an insolvent insurer in a reinsurance contract dispute relating to ongoing asbestos claims.

  • April 02, 2025

    ‘Utah Insurers’ Fighting Rehabilitation Bid Win OK To Keep Some Filings Private

    SALT LAKE CITY — Three entities collectively referred to in the case as “Utah Insurers” have been granted permission to keep numerous pleadings private, with a Utah judge so ordering in a ruling issued without explanation in the state insurance commissioner’s suit seeking to have them placed into rehabilitation.

  • April 01, 2025

    Insurer, Reinsurer Seek To Oppose Reconsideration Of Cleanup Case Production Ruling

    PADUCAH, Ky. — An insurer and reinsurer seek leave from a Kentucky federal magistrate judge to file an opposition to a ferrosilicon producer’s motion for reconsideration of a January ruling that denied the producer’s motion to compel production of documents from the insurers in a dispute over pollution-related cleanup costs; they argue in their reply in support of their motion for leave that the motion for reconsideration violates at least two prior orders and improperly raises new arguments.

  • March 31, 2025

    Retirees’ PRT Case Against Lockheed Martin Survives Dismissal

    GREENBELT, Md. — The same day a similar suit was dismissed without prejudice in a District of Columbia federal court, retirees beat a dismissal motion in another one of the recent set of putative class Employee Retirement Income Security Act lawsuits challenging pension risk transfers (PRTs), with a Maryland federal judge ruling in their favor on March 28.

  • March 31, 2025

    Defendants In 1 PRT Suit Win Dismissal For Lack Of Standing

    WASHINGTON, D.C. — Defendants won one of the first two rulings on dismissal motions in a recent set of similar putative class Employee Retirement Income Security Act lawsuits challenging pension risk transfers (PRTs), with a District of Columbia federal judge on March 28 dismissing a case filed by Alcoa USA Corp. retirees on the grounds that they lack standing.

  • March 31, 2025

    Del. Chancery Court Grants Stipulation To Liquidate Trust In Reinsurance Dispute

    WILMINGTON, Del. — The Delaware Chancery Court approved a stipulation between the receiver for a stock reinsurance company and an insurer, authorizing the liquidation of a trust account and the distribution of up to $2.9 million to satisfy claims asserted under a reinsurance agreement.

  • March 27, 2025

    U.S. Tax Court Rules For IRS In Yet Another Purported Microcaptive Case

    WASHINGTON, D.C. — In line with the court’s prior rulings in similar cases, a U.S. Tax Court judge ruled against petitioners who challenged adverse Internal Revenue Service determinations regarding a purported microcaptive insurance arrangement, concluding that the arrangement “did not constitute insurance for federal income tax purposes because [a captive insurer] did not distribute the risk of loss among its policyholders, and [the arrangement] was not insurance in the commonly accepted sense.”

  • March 27, 2025

    Partial Dismissal Granted In Suit Over Alleged Mistreatment Of Student

    ELIZABETH CITY, N.C. — Concluding that some claims survive dismissal in a suit over alleged mistreatment of an 11-year-old student, a North Carolina federal judge ruled in part that a negligence claim falls outside “the scope of [a] reinsurance policy's exclusionary language,” so governmental immunity was waived “only to the extent that the Plaintiff has alleged negligence.”

  • March 27, 2025

    Policy Owners Ask Connecticut Court To Affirm Setoff Rights In Rehabilitation Row

    HARTFORD, Conn. — Asset managers holding matured insurance policies filed a memorandum requesting that a Connecticut state court affirm that policy owners may apply unpaid death benefit claims as setoffs against ongoing premium obligations during a life insurer’s rehabilitation, arguing that such rights are mandated under state and common law; in a response filed two weeks later, the rehabilitator argues that that stance is “meritless.”

  • March 25, 2025

    State Agency Must Show Cause In Microcaptive Tax Row, Federal Magistrate Orders

    NASHVILLE, Tenn. — A federal magistrate judge in Tennessee ordered a state agency to show cause as to why it should not be compelled to comply with an Internal Revenue Service summons that sought the procurement of tax documents as part of a continuing investigation into microcaptive insurance companies and potential tax evasion.

  • March 24, 2025

    Unspecified Deal Report Ends Jury Trial In Suit Over Alleged Legal Malpractice

    EAST ST. LOUIS, Ill. — Saying without details that the parties informed her “that this case has settled” but consummating the agreement will take some time, an Illinois federal judge concluded a jury trial concerning alleged legal malpractice, directing that the case be dismissed with prejudice in 60 days if the parties don’t request a delay.

  • March 24, 2025

    Lender Alleges Guaranty Breach, Seeks $40M In Damages Before N.Y. Federal Court

    NEW YORK — A reinsurer acting as a finance lender is seeking a jury trial and $40.1 million in damages from a Florida businessman in a federal court in New York for an alleged breach of a personal guaranty agreement following the default of a $34.4 million loan.