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Mealey's Insurance Insolvency

  • April 30, 2025

    Stay Granted In $1B Insurance Fraud Case Pending Sentencing In Related Cases

    RALEIGH, N.C. — A North Carolina federal judge granted a consent motion to stay in a suit accusing Insurance magnate Greg Lindberg and his co-defendant asset management companies and other parties of Racketeer Influenced and Corrupt Organizations Act violations related to their purported participation in a $1 billion scheme to defraud now-insolvent insurers once owned by Lindberg.

  • April 30, 2025

    Residents Sue State-Mandated Insurer ‘Of Last Resort’ Over Los Angeles Wildfires

    LOS ANGELES — California residents sued the California Fair Plan Association (CFPA) and its largest members in a state court seeking damages for the defendants’ alleged bad faith breach of their property insurance policies following the Los Angeles wildfires in January.

  • April 25, 2025

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

    SAN FRANCISCO — Oral argument is scheduled in the First District California Court of Appealin 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.

  • April 23, 2025

    Judge Adopts Report And Settlements, Dismisses Insurers In Asbestos Coverage Row

    BUFFALO, N.Y. — A New York federal judge adopted a magistrate judge’s combined report and recommendation to settle estates’ claims with insurers and dismiss the claims against them in four similar suits filed by the estates of people who died purportedly from asbestos exposure, seeking payment of judgments entered against an asbestos mine, finding no error in the magistrate judge’s report and recommendation.

  • April 23, 2025

    Reinsurer, Life Insurer Seek Approval Of $6.48M Liquidation In Delaware Court

    WILMINGTON, Del. — A stipulation filed in the Delaware Chancery Court between the receiver for a stock reinsurance company and a life insurer would provide for the distribution of $6.48 million and the liquidation of a reinsurance trust to resolve claims under a secured treaty.

  • April 23, 2025

    Policyholder Asks To Intervene, Contest Benefits Cap In Insurer Rehabilitation

    WATERBURY, Conn. — A corporate policyholder holding $18 million in death benefits from a life insurer in rehabilitation moved to intervene in a Connecticut state court action, seeking involvement in future proceedings and participation in discovery, arguing that a moratorium order capping payout at $300,000 per insured policy imposes a disproportionate financial burden and violates priority rules under state insurance law.

  • April 23, 2025

    Recommendation To Dismiss Guaranty Association Adopted In Hurricane Coverage Row

    LAFAYETTE, La. — In a homeowner’s hurricane coverage dispute, a Louisiana federal judge adopted a magistrate judge’s report and recommendation to dismiss the Louisiana Insurance Guaranty Association (LIGA) upon finding that the homeowner failed to show good cause for not timely serving LIGA as required under Federal Rules of Civil Procedure.

  • April 22, 2025

    Citing No Diversity, Judge Remands Hurricane Ida Coverage Dispute To State Court

    NEW ORLEANS — A Louisiana federal judge granted a homeowner’s motion to remand to state court a Hurricane Ida coverage dispute after the Louisiana Guaranty Association (LIGA) was added as a defendant, finding that due to the absence of complete diversity, “remand to state court is appropriate.”

  • 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 16, 2025

    Discovery Hearing Canceled In Bad Faith Suit Upon Liquidation Of Insurer

    LAS VEGAS — In a docket-only minute order, a Nevada federal magistrate judge canceled a discovery hearing after previously issuing an order staying a bad faith suit against an insurer upon receiving notification that a Kansas state court entered a judgment of liquidation, finding the insurer insolvent.

  • April 15, 2025

    Stipulation Filed In Fraudulent Transfer Case After Insurer Liquidation Settlement

    TOPEKA, Kan. — After being advised that settlement agreements were approved by a Kansas state court, parties in a fraudulent transfer case in Kansas federal court involving the insolvent insurer filed a stipulation of dismissal.

  • April 15, 2025

    Bad Faith Suit: CFPA Systematically Failed To Investigate, Pay Wildfire Claims

    LOS ANGELES — Plaintiffs sued California Fair Plan Association (CFPA) and its “largest” members for breach of contract and bad faith in a California court, seeking compensation for their losses incurred by the January Los Angeles wildfires and to hold CFPA “accountable for its decade-long, systematic failure to properly investigate and pay wildfire claims.”

  • April 11, 2025

    Panel Affirms Judgment For Now-Insolvent Insurer In Water Damage Coverage Dispute

    MIAMI — A Florida appellate court affirmed a lower court’s ruling granting summary judgment to a now-insolvent insurer in a dispute with homeowners over coverage for plumbing-related water damage to their home, finding that the lower court correctly determined that the water damage was excluded from coverage under the homeowners’ policy.

  • April 09, 2025

    Magistrate Grants Wells Fargo’s Motion To Withhold Discovery In $300M Ponzi Suit

    MIAMI — A Florida federal magistrate judge granted in part Wells Fargo’s motion to withhold discovery in a putative class action alleging that Wells Fargo aided and abetted fraud in a “massive” Ponzi scheme purportedly orchestrated by owners of insurers, some of which are now in receivership, resulting in elderly investor victims losing more than $300 million after scheme operators sold them promissory notes secured by collateral in stranger-oriented life insurance policies (STOLIs).

  • April 08, 2025

    Florida Panel Affirms Dismissal Of PIP Suit Against Guaranty Association

    MIAMI — A Florida state appellate court affirmed a lower court’s dismissal of a suit seeking payment of personal injury protection (PIP) benefits from the Florida Insurance Guaranty Association (FIGA) for an insured’s injuries sustained in an auto accident after FIGA allegedly refused to pay the claim following the PIP insurer’s insolvency, finding that because the suit was not filed against the insurer before its insolvency, dismissal “was proper” and barred by the statute of limitations.

  • 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 03, 2025

    Citing Settlement Negotiations, Judge Denies Motions In D&O Coverage Row

    INDIANAPOLIS — Noting that the “parties report they are in the process of finalizing a formal settlement agreement,” an Indiana federal judge denied without prejudice a motion for oral argument and the parties’ cross-motions for summary judgment in a suit filed by an insurer now in rehabilitation seeking a declaration that specified directors and officers (D&O) policies apply to cover claims in underlying litigation.

  • April 02, 2025

    Petition Distributed In High Court In Row Over Status Of Underwriting Association

    WASHINGTON, D.C. — The U.S. Supreme Court on April 1 distributed for conference a petition filed by the state-created Pennsylvania Professional Liability Joint Underwriting Association (JUA), which provides coverage to health care providers, including those previously insured by insurers in liquidation, seeking review of a Third Circuit U.S. Court of Appeals ruling holding that the JUA did not have constitutional rights to challenge the constitutionality of  Pennsylvania laws due to JUA’s nature as a public entity instead of a private one.

  • 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

    Magistrate Grants Hurricane Coverage Quash Motion, Says Discovery ‘Not Unlimited’

    NEW ORLEANS — A Louisiana federal magistrate judge granted the Louisiana Insurance Guaranty Association’s (LIGA) motion to quash discovery in a hurricane coverage dispute in which the homeowners seek discovery of more than 200 requests for admission from LIGA regarding whether it paid for repairs of certain items in the home, finding that “[w]hile discovery can be broad, it is not unlimited.”

  • 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

    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 27, 2025

    Extended Report Response Time Granted In Insurance Magnate Money Laundering Case

    CHARLOTTE, N.C. — A North Carolina federal judge granted insurance magnate Greg Lindberg’s motion for an extension to file objections to a presentence investigation report after he pleaded guilty to money laundering conspiracy and conspiracy regarding his $2 billion scheme to defraud insurers and policyholders by funneling money through his extensive global network of insurance companies and was convicted on retrial in a related criminal proceeding.

  • March 26, 2025

    Report Adopted, Dismissal Denied In $300M Class Ponzi Suit Against Wells Fargo

    MIAMI — Agreeing with a magistrate judge’s “well-reasoned findings,” a Florida federal judge adopted the magistrate judge’s report and recommendation and denied Wells Fargo’s dismissal motion in a putative class action alleging that Wells Fargo aided and abetted fraud in a “massive” Ponzi scheme purportedly orchestrated by owners of insurers, some of which are now in receivership, resulting in elderly investor victims losing more than $300 million after scheme operators sold them promissory notes secured by collateral in stranger-oriented life insurance policies (STOLIs).

  • March 25, 2025

    Judge Authorizes Payment Of Over $126K For Fees, Expenses In Insurer Bankruptcy

    WILMINGTON, Del. — A Delaware federal bankruptcy court judge granted an application for compensation and reimbursement to a trustee’s legal counsel in an insolvent insurer’s Chapter 7 bankruptcy proceeding, authorizing the trustee to pay his counsel $126,307.16, which includes $125,438 in compensation.