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

Mealey's Insurance Insolvency

November 08, 2024
Judgment Granted For Insurer In Row Over Defense In Underlying $270M Damage Suit

PORTLAND, Ore. — An Oregon federal judge granted summary judgment to a commercial general liability insurer, as transferee of a now-insolvent insurer, sued in a declaratory judgment action by a workers’ compensation insurer seeking contribution for defense costs incurred in a $270 million underlying suit against their mutual insured manufacturer of semiconductors over birth defects purportedly caused by chemical exposure, finding that the liability insurer does not have a duty to defend due to policy exclusions.
November 08, 2024
La. Panel Vacates Order For Lack Of Admissibility Ruling In Asbestos Coverage Row

BATON ROUGE, La. — A Louisiana appellate panel vacated and remanded a lower court ruling that denied a motion for summary judgment filed by a company that purportedly used asbestos-containing products in an asbestos liability suit filed against it and multiple defendants, including a now-insolvent insurer, finding that the lower court incorrectly denied summary judgment to the company without ruling on the parties’ objections to the evidence.
November 05, 2024
Judge Tosses Insurance Mogul’s Bid To Protect Assets In Row Over $576M Judgment

TAMPA, Fla. — A Florida federal judge dismissed without prejudice a suit filed by insurance mogul Greg Lindberg, the former owner of now-insolvent insurers, seeking an emergency injunction to protect his assets from a $576 million judgment pursuant to a personal guaranty for a reinsurance agreement, finding that abstention is appropriate where there are pending state court proceedings.
October 30, 2024
Court Gets Updates On Objections To Proposals In Reinsurer’s Liquidation

WILMINGTON, Del. — Delaware Chancery Court has been updated on the status of disputes over four proof of claim (POC) procedures the receiver for life and health reinsurer Scottish Re (U.S.) Inc. (SRUS) proposed for its liquidation, with the receiver filing an acknowledgement “that clarifies and should resolve several aspects which prompted objections” and certain cedents and retrocessionaires listing issues that they say “remain unresolved.”
October 24, 2024
$92M Attorney Fee Award Entered In ACA Row Between Health Insurers And Government

WASHINGTON, D.C. — Pursuant to the opinion and order issued by a U.S. Court of Federal Claims judge granting class counsel’s renewed motions for approval of attorney fee requests, the clerk of court entered a judgment of $92,424,335.84 to class counsel 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.
October 24, 2024
Homeowner Sues Guaranty Association Over Not Covering Loss For Windstorm Damage

BARTOW, Fla. — A homeowner whose home was purportedly insured by a now-insolvent insurer sued the Florida Insurance Guaranty Association (FIGA) in Florida state court, asserting that FIGA, as the alleged statutory obligor for the insurer, breached its obligations under state law by failing to adequately compensate the insured for his loss related to windstorm damage.
October 23, 2024
Extension Again Granted In $1B RICO Insurance Fraud Scheme Involving Mogul

RALEIGH, N.C. — Without explanation, a North Carolina federal judge granted defendants’ third motion for an extension to answer an amended complaint in a suit accusing them of Racketeer Influenced and Corrupt Organizations Act (RICO) violations related to their purported participation in a $1 billion scheme to defraud now-insolvent insurers once owned by former insurance mogul Greg Lindberg.
October 23, 2024
$21K Bill Of Costs Filed In Case With $576M Judgment Against Insurance Magnate

GREENSBORO, N.C. — Life insurer Universal Life Insurance Co. (ULICO) filed a $21,963.01 bill of costs in a North Carolina federal court in a suit with a judgment requiring insurance magnate Greg Lindberg, former owner of now-insolvent insurers, to pay more than $576 million pursuant to a personal guaranty for a reinsurance agreement.
October 22, 2024
Judge Remands Hurricane Damage Dispute Involving Insurer, Guaranty Association

BATON ROUGE, La. — “[F]or the reasons set forth” in a Louisiana federal magistrate judge’s report and recommendation to remand to state court a hurricane coverage dispute between a homeowner and his now-insolvent insurer, a Louisiana federal judge remanded the case “for lack of subject matter jurisdiction” after the magistrate judge granted the insured’s motion to amend his complaint to add the Louisiana Insurance Guaranty Association (LIGA) as a defendant.
October 22, 2024
Motion To Substitute Guaranty Association Denied In Row Over Hurricane Coverage

LAFAYETTE, La. — A Louisiana federal magistrate judge denied an insured’s motion to substitute the Louisiana Insurance Guaranty Association (LIGA) for a now-insolvent insurer in a dispute over coverage for purported damages caused by Hurricanes Laura and Delta, finding that even if the court determined that it had subject matter jurisdiction over LIGA through a transfer of interest from the insurer to LIGA, the state of Louisiana’s interest in regulating insurance provides a sufficient reason for abstention.
October 16, 2024
Summary Judgment Granted For Guaranty Association In Asbestos Coverage Dispute

NEW ORLEANS — A Louisiana federal judge granted summary judgment to the Louisiana Insurance Guaranty Association (LIGA), the purported statutory obligor for insurance policies issued by a now-insolvent insurer of the defendants sued by a now-deceased man alleging that workplace exposure to asbestos caused his mesothelioma, finding that the wrongful death claims filed by the man’s wife and two daughters are barred by the insurance liquidator’s deadline to file claims.
October 16, 2024
Dismissal Stipulated To In Breach Of Contract Suit Against Wealth Management Firm

RALEIGH, N.C. — Without providing an explanation, the parties in a breach of contract suit filed in North Carolina federal court by a now-insolvent insurer against a wealth management company alleged to have violated a loan agreement stipulated to dismissal of the company’s counterclaims.
October 16, 2024
Insurer And Investment Firm Stipulate To Dismissal In Breach Of Contract Suit

RALEIGH, N.C. — An insurer in rehabilitation and the Malta-based investment firm its sued for breach of contract related to the firm’s purported failure to make payments on a loan filed a stipulation of dismissal in North Carolina federal court regarding the firm’s counterclaims.
October 10, 2024
California Bishop Amends Complaint, Seeks Insurance Coverage For Sex Abuse Suits

SAN FRANCISCO — The Roman Catholic Bishop of Oakland, Calif., filed a fifth amended declaratory judgment and breach of statutory duty complaint in a California federal court against numerous insurers and the California Insurance Guarantee Association (CIGA), which the plaintiff believes assumed responsibilities for its now-insolvent insurer, seeking a declaratory judgment stating that the plaintiff is entitled to a defense and indemnity regarding covered claims for the more than 300 suits filed against it related to alleged clergy sexual abuse.
October 10, 2024
Florida Panel Dismisses Reinsurer’s Appeal From Insolvency Proceeding

TALLAHASSEE, Fla. — In a brief per curiam disposition, a Florida appellate panel partly dismissed and partly affirmed an offshore reinsurer’s appeal of the denial of its motion to lift an automatic stay in a workers’ compensation insurer’s liquidation and to compel arbitration.
October 10, 2024
Claims Objection Bar Date Extension Granted In Liquidation Of Vesttoo

WILMINGTON, Del. — A Delaware federal bankruptcy judge has granted a motion to extend the claims objection bar date by 180 days to April 7 in the Chapter 11 liquidation of Vesttoo Ltd. and its dozens of affiliates.
October 09, 2024
Louisiana Federal Judge Tosses Hurricane Coverage Row With Guaranty Association

LAKE CHARLES, La. — After being advised that the parties have settled, a Louisiana federal judge dismissed a hurricane coverage dispute between insureds and the Louisiana Insurance Guaranty Association (LIGA), which was substituted for their now-insolvent insurer.
September 30, 2024
Judge Orders Parties To File Stipulation Of Dismissal In Insurer Liquidation Case

TOPEKA, Kan. — After being advised of a settlement in the liquidation proceedings of an insolvent medical malpractice insurer, a Kansas federal judge in a docket-only entry ordered the parties to file a stipulation of dismissal by Nov. 18.
September 30, 2024
Dismissal Granted To D&O Insurer In Coverage Dispute With Insurance Commissioner

OKLAHOMA CITY — An Oklahoma federal judge granted a D&O insurer’s motion to dismiss a declaratory judgment suit filed against it by the Oklahoma insurance commissioner, as receiver of another insurer in liquidation whose parent company was insured under a policy issued by the D&O insurer, finding that neither the liquidation order nor the Oklahoma Uniform Insurers Liquidation Act (OUILA) gives the insurance commissioner standing to “succeed” to the rights of the directors or officers.
September 26, 2024
Claims Objection Bar Date Extension Sought In Liquidation Of Vesttoo

WILMINGTON, Del. — A Delaware federal bankruptcy judge has been asked to extend the claims objection bar date by 180 days in the Chapter 11 liquidation of Vesttoo Ltd. and its dozens of affiliates.
September 25, 2024
Judge Grants Extension In $1B RICO Insurance Fraud Scheme Involving Magnate

RALEIGH, N.C. — Without providing an explanation, a North Carolina federal judge granted defendants’ motion for an extension to file answers to an amended complaint in a suit accusing them of Racketeer Influenced and Corrupt Organizations Act (RICO) violations related to their purported participation in a $1 billion scheme to defraud now-insolvent insurers once owned by former insurance magnate Greg Lindberg.
September 25, 2024
Judge Tosses All Claims In Hurricane Coverage Dispute With Guaranty Association

NEW ORLEANS — “Considering” the parties’ joint dismissal motion, a Louisiana federal judge dismissed with prejudice 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.
September 24, 2024
Judge Grants DOJ’s $1.45M Forfeiture Bid In Bribery Case Against Insurance Magnate

STATESVILLE, N.C. — A North Carolina federal judge on Sept. 23 granted the Department of Justice’s (DOJ) motion for the preliminary forfeiture of two bank accounts totaling $1,454,758.45 seized by the Federal Bureau of Investigation while investigating a case resulting in a retrial at which the former owner of now-insolvent insurers was again convicted of bribery and conspiracy, finding that the government established the required nexus to show that the seized proceeds were related to the crimes.
September 24, 2024
Discovery Ruling Issued In Asbestos Coverage Row Involving Insolvent Insurer

OMAHA, Neb. — A Nebraska federal magistrate judge granted in part National Indemnity Co. (NICO)’s motion to compel discovery of an insurer in its suit seeking to enforce obligations by multiple insurers, one of whom is now insolvent, for the liability NICO incurred related to claims for asbestos exposure, finding that the attorneys’ eyes only designation (AEO) must be removed from discovery material due, in part, to the insurer’s failure to “articulate why an AEO designation is the right tool to prevent this harm.”
September 23, 2024
Confidentiality Stipulation Filed In $300M Ponzi Fraud Case Involving Insurers

MIAMI — Plaintiffs and defendant Wells Fargo filed a confidentiality stipulation in a Florida federal court in a putative class action suit alleging that Wells Fargo aided and abetted fraud in a “massive” Ponzi scheme purportedly orchestrated by owners of insurers, some of whom 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).