Mealey's Reinsurance
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May 31, 2024
Emergency Relief Disputed In RICO, Fraud Suit Involving Reinsurer’s Parent Company
NEW YORK — In a May 30 reply brief in a fraud and racketeering lawsuit over a secured credit facility and related guaranty agreement, plaintiffs urge a New York federal court to order certain defendants — including the parent company of Bermuda reinsurer 777 Re Ltd. — “into receivership or freeze their assets.”
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May 31, 2024
Fund Defends Bad Faith, Other Claims Against Dismissal Bid In Reimbursement Case
MONTGOMERY, Ala. — Urging an Alabama federal court to deny dismissal motions in a dispute over reimbursement for workers’ compensation claims, the plaintiff argues in part that a bad faith claim is proper because it “is not an ‘insurer’ under Alabama law and is not a party to a reinsurance contract with Defendants.”
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May 30, 2024
Retirees Urge Denial Of Dismissal Motion In ERISA Pension Risk Transfer Case
GREENBELT, Md. — Calling Thole v. U.S. Bank. N.A. “entirely distinguishable,” Lockheed Martin Corp. retirees urged a Maryland federal court to deny dismissal of their suit, which is one of a quartet of similar recent putative class actions challenging pension risk transfers (PRTs) under the Employee Retirement Income Security Act.
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May 30, 2024
Founder, Consultant Seek Acquittal Or 3rd Trial After Bribery Reconviction
STATESVILLE, N.C. — Following a retrial at which a federal jury in North Carolina again convicted an insurance and reinsurance management company’s founder and a consultant on bribery and another criminal count, the defendants on May 29 asked the court for a judgment of acquittal or a second retrial, arguing “insufficient evidence of a prohibited quo” and “instructional and evidentiary errors.”
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May 30, 2024
On Retrial, Federal Jury Again Convicts Founder, Consultant For Alleged Bribery Scheme
STATESVILLE, N.C. — On retrial, an insurance and reinsurance management company’s founder and a consultant were again each convicted on two criminal counts in connection with an alleged bribery scheme.
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May 30, 2024
Excess Loss Reinsurance Case With ERISA, Bad Faith Claims Closed On Deal Report
PITTSBURGH — After the parties reported that they reached an unspecified “tentative resolution,” a Pennsylvania federal judge administratively closed an Employee Retirement Income Security Act suit over an excess loss reinsurance contract.
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May 24, 2024
N.C. High Court Allows Supersedeas In Insurer’s Quest To Enforce $524M Judgment
RALEIGH, N.C. — Without providing explanation, the North Carolina Supreme Court ordered that a writ of supersedeas be “allowed” in an insurer’s suit seeking enforcement of a $524,009,051.26 judgment against Greg Lindberg, the founder of a multinational investment company who was recently convicted by a federal jury of a scheme to bribe North Carolina’s insurance commissioner.
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May 24, 2024
‘Two Acts’ Arguments Prevail In 1 Ruling In Reinsurance Allocation Dispute
MONTGOMERY, Ala. — Rejecting numerous interpretations an insurer urged in arguing that the two events at issue in a coverage dispute be treated as one act, an Alabama federal judge on May 23 granted summary judgment for a reinsurer on a single breach of contract claim.
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May 22, 2024
Counsel Withdrawal Hearing Continued In SEC Suit Against Insolvent Insurers’ Owner
WINSTON-SALEM, N.C. — A North Carolina federal magistrate judge granted, in part, a joint motion to appear remotely at a hearing scheduled 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 now-insolvent insurers, defrauded clients of more than $75 million, continuing the hearing and requiring the parties to file a joint status report by May 23.
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May 22, 2024
On Reconsideration, Judge Dismisses Implied Indemnity Claim Under State Law
JACKSON, Miss. — Granting a motion for reconsideration and dismissing a third-party complaint with prejudice in a dispute involving a franchisee and commutation of reinsurance, a Mississippi federal judge ruled that “[t]he implied indemnity claim necessarily fails under Mississippi law because it does not seek indemnification for passive negligence.”
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May 22, 2024
Parties In Bad Faith Suit Over Water Damage Report Unspecified Settlement
PHOENIX — After an insured, insurer and reinsurer reported an unspecified settlement in a bad faith suit over water damage, an Arizona federal judge ordered that the case be dismissed with prejudice unless the notice of settlement is withdrawn or a stipulation to dismissal is filed by June 17.
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May 22, 2024
Trustee Seeks Approval Of $2.9M Settlement In Insolvent Insurer’s Bankruptcy Case
WILMINGTON, Del. — A trustee for estates in an insolvent insurer’s Chapter 7 bankruptcy proceeding filed a motion to approve a $2.9 million settlement agreement between the parties, which includes a $100,000 payment to a broker who has assisted the trustee in managing the assets in the proceeding.
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May 17, 2024
Attorneys Get 25% Of $169M Exaction Class Settlement In ACA Reinsurance Row
WASHINGTON, D.C. — A U.S. Court of Federal Claims judge on May 16 granted final approval of a class settlement under which the government will pay $169,022,397.28 to resolve part of a long-running lawsuit over the Transitional Reinsurance Program (TRP) of the Patient Protection and Affordable Care Act (ACA), also awarding 25% of that sum, net of expenses, for attorney fees.
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May 16, 2024
U.S. High Court: With Request, Arbitrable Dispute Must Be Stayed, Not Dismissed
WASHINGTON, D.C. — A case involving an arbitrable dispute must be stayed and not dismissed pending arbitration where a party has requested a stay, a unanimous U.S. Supreme Court ruled May 16 in a case brought by delivery drivers against the individual owners and managers of Intelliserve and related corporate entities (together, Intelliserve).
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May 16, 2024
Reinsurer’s $3.2M Appeal Bond Is Approved In Breach Of Contract Dispute
DALLAS — After entering an amended final judgment against a reinsurer for $2,866,423.97, including attorney fees and interest, a Texas federal magistrate judge granted the reinsurer’s unopposed motion for approval of a $3.2 million appeal bond and to stay execution and enforcement of the judgment pending resolution of its appeal.
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May 16, 2024
Judgment For Government Is Entered On Last Claims In Microcaptive Penalty Row
WEST PALM BEACH, Fla. — Noting that the settlement terms include a tax attorney’s “payment of $5,200,000, inclusive of payments already made,” a Florida federal judge granted a joint motion for entry of judgment for the federal government on the remaining claim and counterclaim in a dispute over penalties for the tax attorney’s purported promotion of abusive tax shelters in the form of microcaptive insurance companies.
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May 16, 2024
Parties In Reinsurance Estoppel Row Brief Arbitration Arguments In 7th Circuit
CHICAGO — Parties to reinsurance agreements who disagree on the effects of prior arbitration are wrangling in the Seventh Circuit U.S. Court of Appeals, with the appellee arguing in its response brief that whether estoppel applies to the dispute “is an issue reserved for the arbitrators,” not “a threshold arbitrability question reserved for courts.”
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May 15, 2024
Sanctions Imposed, Strike Bid Denied In Reinsurer’s Breach Of Contract Case
FORT WORTH, Texas — Days after ordering a reinsurer’s attorneys to read certain materials and imposing a monetary sanction of $950, a Texas federal judge on May 14 entered a text-only order granting the other party’s motion to substitute counsel in the reinsurer’s lawsuit over allegedly inflated provisional commissions and breach of various agreements.
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May 15, 2024
On Appeal, Parties Argue Property Interest In ACA Reinsurance Takings Case
WASHINGTON, D.C. — Arguing primarily that the Transitional Reinsurance Program (TRP) of the Patient Protection and Affordable Care Act (ACA) “did not implicate a cognizable property interest,” the government filed an appellee brief urging the Federal Circuit U.S. Court of Appeals to affirm rulings against two self-insured group health plan trusts.
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May 15, 2024
Reinsurer Seeks Approval Of $3.2M Appeal Bond In Breach Of Contract Dispute
DALLAS — After entry of an amended final judgment against it for $2,866,423.97, including attorney fees and interest, a reinsurer filed a notice of appeal and an unopposed motion for approval of a $3.2 million appeal bond and to stay execution and enforcement of the judgment.
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May 14, 2024
4 Entities Hurt By Vesttoo Collapse Sue China Construction Bank, Others For Fraud
NEW YORK — Asserting that they were some of the “biggest victims” of the alleged fraud underlying the collapse of Vesttoo Ltd., entities including Porch Group Inc. and Homeowners of America Insurance Co. (HOA) sued China Construction Bank Corp. (CCBC) and related parties in a New York federal court for fraud and negligent supervision and retention.
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May 08, 2024
COMMENTARY: Bad Faith As A Substitute For Prejudice In Reinsurance Late Notice Disputes
By Robert M. Hall
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May 13, 2024
2nd Circuit Dismisses Arbitrator Bias Appeal As Moot After Award Is Made
NEW YORK — After being informed that an arbitration award issued the day before oral argument was scheduled to occur mooted the appeal, a Second Circuit U.S. Court of Appeals panel had the parties appear for a brief discussion and then on May 10 dismissed the case, also ordering that the lower court’s ruling be vacated.
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May 13, 2024
Citing Jury Verdict, Plaintiffs Seek Attorney Fees From U.S. In Microcaptive Row
FORT MYERS, Fla. — Following a Florida federal jury ruling against the government in consolidated cases over whether the plaintiffs’ involvement with purported microcaptive insurance companies constituted promotion of abusive tax shelters, the corporate plaintiffs are seeking approximately $600,000 in attorney fees and costs, and the government is countering in part that its position was “substantially justified.”
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May 13, 2024
Parties Brief Summary Judgment Arguments On Reinsurance Loss Allocation
MONTGOMERY, Ala. — In renewed briefing, parties in a suit over multiple reinsurance disputes make summary judgment arguments on a single breach of contract claim, with the reinsurer arguing that the loss for the lawsuit at issue “was properly ceded to the two impacted Treaties” and the insurer contending that the policy requires the two events at issue in the lawsuit “to be treated as one Wrongful Act.”