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Mealey's Reinsurance

  • 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.

  • March 20, 2025

    Judge Remands Reinsurance Dispute After Finding No Foreign Arbitration Agreement

    NEWARK, N.J. — A New Jersey federal judge on March 19 adopted a magistrate judge’s report and recommendation and remanded a reinsurance dispute to state court as the defendant international reinsurers who sought removal under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) failed to establish that the relevant parties entered a binding arbitration agreement.

  • March 20, 2025

    Hawaii High Court Opines On Answers As To Insurer’s Subrogation Rights

    HONOLULU — The Hawaii Supreme Court issue an 80-page opinion expanding on its earlier order that answered three reserved questions on how the subrogation rights of property and casualty insurance carriers bear on a proposed global settlement of claims related to the August 2023 Maui wildfires.

  • March 20, 2025

    5th Circuit Affirms 3 Captive Insurance Arbitration Awards, Partially Reverses 4th Award

    NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel affirmed three arbitration awards to Louisiana reconstructive surgeons totaling more than $7.6 million but partially reversed a fourth award of nearly $88.7 million after finding a company’s executive who was held jointly and severally liable for that award was a nonsignatory to the arbitration agreement and could not be bound by it under the doctrine of direct-benefits estoppel in a dispute involving a captive insurance agreement.

  • March 19, 2025

    5th Circuit Oral Argument Set, Amicus Brief Filed In IRS Microcaptive Row

    NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals scheduled oral argument for April 1 in a case involving whether microcaptive insurance arrangements are ineligible for federal tax benefits and just over a week later granted an opposed motion for an out-of-time amicus brief by an individual facing IRS penalties who urges the court to adopt the U.S. Tax Court’s interpretation of the timeliness requirement for supervisory approval of penalties.

  • March 18, 2025

    Subrogees Must Arbitrate $28M Algerian Turbine Claim, 11th Circuit Says

    ATLANTA — An 11th Circuit U.S. Court of Appeals panel on March 18 affirmed an order compelling arbitration of a dispute over approximately $28 million in damages to an Algerian power plant caused by a turbine failure, finding that insurers, reinsurers and retrocessionaires are subrogees of the plant-owner and therefore bound by an arbitration agreement in a services contract with entities that manufactured the turbine.

  • March 18, 2025

    Oral Argument Sought In Challenge To Rehab Plan For Workers’ Comp Insurer

    SAN FRANCISCO — Both parties have requested oral argument in the First District California Court of Appeal in a workers’ compensation insurance carrier’s challenge to a nonconsensual rehabilitation plan that was approved as part of conservation proceedings brought by California’s insurance regulator and includes resolution of dozens of reinsurance participation agreement (RPA) lawsuits.

  • March 18, 2025

    Insurance Mogul Ordered To ‘Pay Disgorgement’ In SEC Fraud Suit Against Him

    WINSTON-SALEM, N.C. — A North Carolina federal judge entered judgment against insurance mogul Greg Lindberg, a former owner of insurers in liquidation and rehabilitation, requiring him to “pay disgorgement of ill-gotten gains and prejudgment” in response to the U.S. Securities and Exchange Commission’s motion for judgment, with Lindberg’s consent, in its suit alleging that he, his advisory services company and its former executive defrauded clients of more than $75 million.

  • March 18, 2025

    Farmer Seeks De Novo Review, Overturning Of Decision In Crop Insurance Spat

    SIOUX FALLS, S.D. — A farmer who says he “exhausted all administrative remedies” filed a complaint in a federal court in South Dakota seeking de novo review of a decision by a federal agency’s independent appeals division after it upheld a determination that a crop insurance regulator lacked authority to issue a noncompliance finding under the farmer’s Whole Farm Revenue Protection (WFRP) policy, which reduced a crop loss payout.

  • March 17, 2025

    Reinsurance Pool Entities Seek Dismissal, Claim Contractual Permissibility

    WILMINGTON, Del. — Citing compliance with contractual agreements, the manager of a captive insurance and reinsurance pool and others ask a Delaware state court to dismiss a verified derivative complaint filed by a pool member who alleges that the manager and others engaged in an illegal reorganization that transferred policies from its "A" rated pool with more than $1 billion in assets to a new, unrated insurer with limited capitalization.

  • March 17, 2025

    Dismissal Bids Fought In Row Over Vesttoo-Linked Letters Of Credit

    NEW YORK — In four motions that have drawn opposition, China Construction Bank Corp. (CCBC) and related defendants seek dismissal of claims that stem from the alleged fraud underlying the collapse of nonparty Vesttoo Ltd., arguing primarily that the New York federal court lacks jurisdiction and the claims are not sufficiently stated.

  • March 14, 2025

    Citing Deal Talks, Parties In Indemnification Row Get Briefing Suspension

    BOSTON — Summary judgment briefing has been suspended for about two months in an indemnification dispute involving a stock purchase agreement (SPA) and reinsurance agreement, with a Massachusetts federal judge granting the parties’ joint request for the suspension in a March 13 text-only order.

  • March 14, 2025

    South Carolina Regulator Loses Reconsideration Bid In Administrative Law Court

    COLUMBIA, S.C. — A South Carolina Administrative Law Court judge has allowed the continued operation of Atlantic Coast Life Insurance Co. (ACL) and ACL’s captive reinsurer, Southern Atlantic Re Inc. (SAR), by rejecting a request to reconsider an earlier order.

  • March 10, 2025

    COMMENTARY: Sustainability Recalibration: What Insurers And Policyholders Should Know About ESG (Environmental, Social, and Governance Considerations) Under Trump 2.0, Part 2

    By Scott M. Seaman

  • March 10, 2025

    Parties In Reinsurance Case Stipulate Consequential Damages Request Mooted

    CHICAGO — An insurer’s motion for partial judgment on the pleadings in an ongoing dispute with its reinsurer was declared moot by a federal judge in Illinois after the parties filed a joint stipulation in which they agreed that the reinsurer will not seek relief for attorney fees or other consequential damages on claims under a reinsurance agreement.

  • March 10, 2025

    Reinsurance Dispute Closed After Parties Agree To Dismiss All Claims

    OMAHA, Neb. — A federal judge in Nebraska dismissed with prejudice a suit involving a reinsurance contract and a settlement with the state of Montana over alleged asbestos exposures, following a joint stipulation between the parties to dismiss all claims.

  • March 06, 2025

    Del. Chancery Court Approves Stipulation Resolving Reinsurance Agreement Dispute

    WILMINGTON, Del. — The Delaware Chancery Court approved a stipulation between the receiver for a stock reinsurance company and a life insurance company, allowing the receiver to liquidate at least $58.4 million from a trust account and to distribute at least $49.6 million to the life insurance company.

  • March 06, 2025

    Reinsurance Pool Manager Accused Of Illegal $1B Transfer In Reorganization Scheme

    WILMINGTON, Del. — A member of a captive insurance and reinsurance pool alleges in a complaint filed in a Delaware state court that the pool manager and others engaged in an illegal reorganization that transferred policies from its "A" rated pool with more than $1 billion in assets to a new, unrated insurer with limited capitalization and only $170 million in reinsurance limits.

  • March 05, 2025

    Fact Witness Testimony Limited In RESPA Class Suit Over Captive Reinsurance Pacts

    FRESNO, Calif. — A federal judge in California barred a fact witness in a long-running Real Estate Settlement Procedures Act (RESPA) case from providing opinion testimony based on scientific, technical or specialized knowledge but allowed testimony regarding performed analysis and data review in connection with risk transfer and reinsurance services that he and a partner were hired to provide.

  • March 05, 2025

    ‘Plausible’ Interpretations Doom Summary Judgment Bids In Reinsurance Row

    WHITE PLAINS, N.Y. — Calling both sides’ interpretations of facultative reinsurance certificates “plausible,” a New York federal judge denied competing summary judgment motions in a breach of contract suit involving a confidential environmental losses settlement.