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Preview: LexisNexis® Mealey's™ Reinsurance Legal News

LexisNexis® Mealey's™ Reinsurance Legal News



Headline Reinsurance Legal News from LexisNexis®



 



Panel Denies Mortgage Lender, Captive Reinsurer's Appeal On Federal Statute
WASHINGTON, D.C. - On petition by a large mortgage lender and its captive reinsurer, a District of Columbia Circuit U.S. Court of Appeals majority on Jan. 31 upheld a federal statute's provision preventing the U.S. president from firing an agency's director without cause (PHH Corp., et al. v. Consumer Financial Protection Bureau, No. 15-1177, D.C. Cir., 2018 U.S. App. LEXIS 2336).



Insured Does Not Show Contract With Reinsurer, Federal Judge Concludes
PITTSBURGH - An insured is not in contractual privity with a reinsurer under an insurance policy or a reinsurance agreement, a Pennsylvania federal judge held Feb. 8, dismissing breach of contract, bad faith and civil conspiracy claims (Three Rivers Hydroponics LLC v. Florists' Mutual Insurance Co., et al., No. 15-00809, W.D. Pa., 2018 U.S. Dist. LEXIS 20699).



Judge Dismisses Majority Of Claims In Kickback Scheme Over Lender-Placed Insurance
CHICAGO - In a lawsuit alleging a kickback scheme in lender-placed insurance, an Illinois federal judge on Feb. 8 dismissed most of the claims except for breach of contract and bad faith claims pertaining to alleged overcharging of nonexistent inspections (Mariusz Dolegiewicz v. U.S. Bank Trust, N.A., et al., No. 17-4737, N.D. Ill., 2018 U.S. Dist. LEXIS 21089).



Reinsurer, Insurer Agree To Litigate $1.25M Breach Of Contract Dispute
HARTFORD, Conn. - A Connecticut federal judge on Feb. 7 granted a joint motion by a reinsurer and insurer to withdraw a motion to dismiss and a motion to enjoin and instead to litigate a $1.25 million breach of contract dispute over settlement of underlying asbestos claims (Travelers Casualty and Surety Co. v. Allstate Insurance Co., No. 17-02144, D. Conn.).



Government Did Not Violate Insurers', Reinsurers' 5th Amendment Rights, Panel Says
WASHINGTON, D.C. - The U.S. government's termination of insurers and reinsurers' lawsuits pursuant to a claims settlement agreement between it and Libya and its subsequent legislation and executive order did not constitute a compensable taking under the Fifth Amendment, the Federal Circuit U.S. Court of Appeals affirmed Feb. 12 (Aviation & General Insurance Company Ltd., et al. v. United States, Nos. 16-2389 & 16-2402, Fed. Cir., 2018 U.S. App. LEXIS 3275).



Justice Allows Tortious Interference Claim Against Insurer's Claims Handler
NEW YORK - In a dispute over an alleged profit arrangement between insurers and reinsurers, an estate's executor established sufficient allegations to move forward with his tortious interference claim against a claims handler for its denial of payment of an underlying $7.1 million asbestos judgment, a New York justice ruled Jan. 24 (Ruby Konstantin v. Certain Underwriters at Lloyd's London, et al., No. 652897/2013, N.Y. Sup., New York Co., 2018 N.Y. Misc. LEXIS 407).



Insurer, Reinsurer Submit Briefs On New York High Court Decision's Application
NEW YORK - In a coverage dispute over asbestos litigation costs, a reinsurer and insurer submitted letters on Feb. 9 to the Second Circuit U.S. Court of Appeals concerning how a New York high court ruling applies to a reinsurance contract's per-occurrence liability cap (Global Reinsurance Corporation of America v. Century Indemnity Co., No. 15-2164, 2nd Cir.).



Pennsylvania Federal Judge Allows Class To Add Bad Faith Claim Against Life Insurer
PHILADELPHIA - In a consolidated class action against a life insurer for breaches of its policies through consideration of lower investment income and higher reinsurance costs, a Pennsylvania federal judge on Feb. 1 allowed the class to amend its complaint to add a tortious breach of good faith and fair dealing claim on behalf of a California subclass (In re: Lincoln National Co. Litigation, No. 16-06605, E.D. Pa., 2018 U.S. Dist. LEXIS 16355).



Reinsurer Tells Nebraska Federal Court Promissory Note Is Void, Unenforceable
LINCOLN, Neb. - A reinsurer moved for summary judgment on Feb. 9 in Nebraska federal court, arguing that a promissory note executed pursuant to a reinsurance participation agreement (RPA) is void and unenforceable as a matter of public policy (Applied Underwriters Inc. v. Top's Personnel Inc., No. 15-90, D. Neb.).



Bankrupt Reinsurance, Insurance Provider Hit With Suit By Former Employees
WILMINGTON, Del. - Former employees of a bankrupt insurance and reinsurance services company filed a putative class action complaint on Feb. 1 in the Delaware bankruptcy court, alleging that they were laid off without proper notice under the Workers' Adjustment and Retraining Notice Act (WARN Act) (In re: Patriot National Inc., et al., Chapter 11, No. 18-10189, Michelle L. Cole, et al. v. Patriot National Inc., et al., Adv. Pro. No. 18-5, D. Del. Bkcy.).



Insurer, Bank Settle Dispute Over Reinsurance Funds Mishandling
COLUMBIA, S.C. - An insurer and a bank filed a joint status report on Feb. 5 informing a South Carolina federal judge that they have reached a tentative settlement over accusations that the bank mishandled reinsurance funds (Companion Property and Casualty Insurance Co. v. U.S. Bank National Association v. Redwood Reinsurance Spc. Ltd., et al., No. 15-01300, D. S.C.).



Reinsurer Asserts Class Action Counterclaim Against Workers' Comp Insurer
LINCOLN, Neb. - In a dispute over whether a reinsurer owes $152,616.35 under a promissory note executed pursuant to a reinsurance participation agreement (RPA), the reinsurer filed a counterclaim on Feb. 2 in the Nebraska federal court, alleging that an insurer fraudulently charged employer-insureds inflated premiums and costs for workers' compensation insurance (Applied Underwriters Inc. v. Top's Personnel Inc., No. 15-90, D. Neb.).



Judge Extends Deadlines In Cases Over Reinsurance Participation Agreement
SACRAMENTO, Calif. - In two putative class actions over a reinsurance participation agreement (RPA), a California federal judge on Feb. 6 issued extensions on deadlines for expert disclosures, completion of discovery and discovery motions (Shasta Linen Supply Inc. v. Applied Underwriters Inc., et al., Nos. 16-00158 & 16-01211, E.D. Calif., 2018 U.S. Dist. LEXIS 6079).



U.S. Supreme Court Denies Cert On Arbitration Clause In Reinsurance Agreement
WASHINGTON, D.C. - The U.S. Supreme Court on Jan. 22 denied certiorari in a dispute where a reinsurer asked whether "an argument that applies equally" to an arbitration clause under a reinsurance participation agreement (RPA) "as a whole is sufficient to specifically challenge a delegation provision" under Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 70 (2010) (Applied Underwriters Captive Risk Assurance Company Inc. v. Minnieland Private Day School Inc., No. 17-717, U.S. Sup., 2017 U.S. S. Ct. Briefs LEXIS 4426).



Judge: Reinsurer Is Liable For $5M Settlement Between Insurer, Steel Maker
NEW YORK - A reinsurer is liable for an insurer's $5 million settlement with a steel maker, a New York federal judge ruled Jan. 23, granting the insurer's motion to enforce an arbitration award (National Indemnity Co. v. IRB Brasil Resseguros S.A., No. 15-3975, S.D. N.Y.).



Texas Federal Judge Opts To Transfer Dispute Between Insolvent Insurer, Reinsurer
AUSTIN, Texas - Rather than remand or compel arbitration, a Texas federal judge on Jan. 19 transferred venue of a reinsurance agreement dispute between a reinsurer and an insolvent insurer to a Georgia federal court based upon a forum-selection clause (Gramercy Insurance Co. v. Contractor's Bonding Ltd., No. 17-723, W.D. Texas, 2018 U.S. Dist. LEXIS 8674).



Nebraska Federal Judge Transfers Reinsurer's Breach Of Contract Case
LINCOLN, Neb. - A Nebraska federal judge on Jan. 16 transferred a breach of contract dispute regarding a reinsurance participation agreement (RPA) between parties to a similar case in the Connecticut federal court based upon the first-to-file rule (Applied Underwriters Captive Risk Assurance Co. v. Charter Oak Oil Co., No. 17-164, D. Neb., 2018 U.S. Dist. LEXIS 8301).



Florida Self-Insured Agency Sues Reinsurer For Breach Of Contract
FORT MYERS, Fla. - A reinsurer failed to reimburse a $750,000 settlement and defense costs associated with a civil rights lawsuit, a Florida self-insured intergovernmental risk management association alleges in a Jan. 16 complaint filed in a Florida federal court (Public Risk Management of Florida v. Munich Reinsurance America Inc., No. 18-27, M.D. Fla.).



Reinsurer Seeks Dismissal Of Breach Of Contract Case In Favor Of Parallel Action
HARTFORD, Conn. - A reinsurer in a Jan. 16 motion seeks dismissal of a breach of contract complaint filed in Connecticut federal court based upon its refusal to pay $1.25 million under a series of reinsurance agreements to an insurer for a settlement of underlying asbestos claims (Travelers Casualty and Surety Co. v. Allstate Insurance Co., No. 17-02144, D. Conn.).



Judge Grants Judgment To Mortgagors, Reinsurer On RESPA, Unjust Enrichment Claims
PITTSBURGH - In a mortgage insurance reinsurance scheme case, a Pennsylvania federal judge on Jan. 19 granted judgment on the pleadings to mortgagors and a reinsurer with regard to a Real Estate Settlement Procedures Act (RESPA) claim and an unjust enrichment claim (Linda Menichino, et al. v. Citibank, N.A., et al., No. 12-00058, W.D. Pa., 2018 U.S. Dist. LEXIS 8648).



Judge Dismisses Breach Of Fiduciary, Negligence Claims Against Reinsurance Broker
NEW YORK - An insurer failed to establish its negligence and breach of fiduciary counterclaims against a reinsurance broker, a New York federal judge ruled Jan. 17, finding no special relationship between the parties (Holborn Corp. v. Sawgrass Mutual Insurance Co., No. 16-09147, S.D. N.Y., 2018 U.S. Dist. LEXIS 7848).



Reinsurance Firm Files Chapter 11 Bankruptcy With Plans To Restructure
WILMINGTON, Del. - A reinsurance firm filed for Chapter 11 protection on Jan. 28 in the Delaware bankruptcy court with a plan to sell its equity free and clear of more than $30 million in interest liabilities (In re Scottish Holdings Inc., et al., No. 18-10160, D. Del. Bkcy.).



Judge Issues Judgment In Government's Reinsurance Dispute Of Student Loan
JACKSONVILLE, Fla. - A Florida federal judge on Jan. 30 granted a default judgment in favor of the U.S. government for $10,532.47, plus continuing interest, for its reinsurance coverage of a student loan after the defendant failed to appear (United States of America v. Stephon B. Meadows, No. 17-1087, M.D. Fla., 2018 U.S. Dist. LEXIS 14639).



2nd Circuit Orders Briefing In Reinsurance Dispute Over Occurrence Liability Cap
NEW YORK - In a coverage dispute over asbestos litigation costs, the Second Circuit U.S. Court of Appeals on Jan. 26 ordered an insurer and reinsurer to submit briefing concerning how a New York high court ruling applies to a reinsurance contract's per-occurrence liability cap (Global Reinsurance Corporation of America v. Century Indemnity Co., No. 15-2164, 2nd Cir.).



Reinsurer Says Insurer Fails To Show Asbestos Payments Are Covered, Seeks New Trial
UTICA, N.Y. - A reinsurer argues in its Jan. 19 reply brief for a new trial following a jury's $64 million verdict that an insurer does not show that seven reinsurance agreements cover payments made to an insured in an asbestos claims settlement (Utica Mutual Insurance Co. v. Fireman's Fund Insurance Co., No. 09-00853, N.D. N.Y.).



Insurer Opposes Reopening Discovery In Reinsurance Case On Class Certification
LINCOLN, Neb. - In a dispute over whether a reinsurer owes $152,616.35 under a promissory note executed pursuant to a reinsurance participation agreement (RPA), an insurer argues in its Jan. 24 response that it would be unduly delayed and prejudiced if a Nebraska federal court grants the reinsurer's request for leave to amend an answer and to reopen discovery on a limited basis for class certification (Applied Underwriters Inc. v. Top's Personnel Inc., No. 15-90, D. Neb.).



Judge: Parties Settle Case Over Fraudulent Transfers Of Reinsurance Funds
ATLANTA - Parties to a dispute over alleged fraudulent transfers of reinsurance funds told a Georgia federal court on Jan. 18 that they have reached a settlement agreement (Canal Insurance Co., et al. v. Golden Isles Reinsurance Company Ltd., et al., No. 15-03331, N.D. Ga.).



Insurers Object To Magistrate's Report As To Reinsurance Claims In 9/11 Dispute
NEW YORK - Insurers on Jan. 25 filed an objection to a New York federal magistrate judge's recommendation that their claims arising out of reinsurance contracts be denied in a coverage dispute stemming from the terrorist attacks on Sept. 11, 2001, and also challenged the magistrate's calculation of prejudgment interest (In re: Terrorist Attacks on September 11, 2001, No. 03-MDL-1570, Continental Casualty Co. v. Al Qaeda Islamic Army, No. 04-5970, S.D. N.Y.).



Magistrate Judge Denies Protection On Reinsurance Participation Agreement
SACRAMENTO, Calif. - In two putative class actions, a California federal magistrate judge ruled Jan. 12 that insurers are not entitled to a protective order regarding submission of a reinsurance participation agreement (RPA) (Shasta Linen Supply Inc. v. Applied Underwriters Inc., et al., Nos. 16-00158 & 16-01211, E.D. Calif., 2018 U.S. Dist. LEXIS 6079).



Reinsurers Breached Their Contract By Failing To Pay Share Of Loss, Insurer Says
BRIDGEPORT, Conn. - With regard to settlements of underlying asbestos claims, two reinsurers breached their contract by failing to pay their share of losses, an insurer says in its Jan. 16 complaint filed in Connecticut federal court (Travelers Casualty and Surety Co. v. Nationwide Mutual Insurance Co., et al., No. 18-00088, D. Conn.).



Insurer Asserts Breach Of Contract Against Reinsurer In Federal Court
HARTFORD, Conn. - A reinsurer breached its contract by refusing to pay $1.25 million under a series of reinsurance agreements with an insurer for the insurer's settlement of underlying asbestos claims, the insurer says in a Dec. 22 complaint filed in Connecticut federal court (Travelers Casualty and Surety Co. v. Allstate Insurance Co., No. 17-02144, D. Conn.).



Insurer: Excess Reinsurer Breached Contract In Denial Of Claim Reimbursement
MIAMI - An international health insurer alleges in a Dec. 20 complaint filed in a Florida federal court that an excess reinsurer breached its contract by refusing to pay $139,000 for an underlying medical claim paid by the health insurer (VIP Universal Medical Insurance Group Ltd. v. BF&M Life Insurance Company Ltd., et al., No. 17-24633, S.D. Fla.).



Liquidator Files Breach Of Contract Claim Against Holding Company In Reinsurance Suit
NEW YORK - In a dispute over reinsurance proceeds allegedly owed to an insolvent insurer, a liquidator on Jan. 2 asserted a breach of contract claim in a New York federal court against a holding company based upon its alleged assumption of facultative reinsurance agreements and subsequent breach of those agreements (Roger A. Sevigny v. Trygvesta Forsikring A/S, Trygvesta Forsikring A/S v. Cerberus Holding Company LLC., No. 16-04874, S.D. N.Y.).



Insurer Opposes New Trial As Jury Had Evidence For $64M Award Against Reinsurer
UTICA, N.Y. - In response to a reinsurer's motion for a new trial, an insurer argues in a Jan. 12 brief to a New York federal court that a jury had ample evidence in a "dozen witnesses and hundreds of exhibits" before reaching a $64 million verdict against a reinsurer over asbestos claims (Utica Mutual Insurance Co. v. Fireman's Fund Insurance Co., No. 09-00853, N.D. N.Y.).



Insurer Says Reinsurer Breached Contract With Regard To Asbestos Claims
BRIDGEPORT, Conn. - A reinsurer breached its contract by refusing to pay its share of losses arising out of the settlement of asbestos claims, an insurer says in a Jan. 16 complaint filed in the Connecticut federal court (Travelers Casualty and Surety Co. v. Lamorak Insurance Co., No. 18-00087, D. Conn.).



6th Circuit Denies Rehearing For Ruling On Documents Between Insurer, Reinsurer
CINCINNATI - In an asbestos coverage dispute, the Sixth Circuit U.S. Court of Appeals on Jan. 3 denied a panel rehearing and rehearing en banc on a decision to not conduct an in camera review of an insurer's documents disclosed to third parties other than a reinsurer and a claims adjuster (In re OneBeacon Insurance Co. v. The William Powell Co., No. 17-3852, 6th Cir.).



Insurer Seeks To Certify $3.2M Default Judgment Final Against Reinsurer
SAN DIEGO - An insurer asks a California federal court in a Jan. 12 motion to certify as final a $3.2 million default judgment against a reinsurer over its alleged breach of reinsurance agreements as a result of a series of fraudulent transfers (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif.).



SEC Settles With Reinsurance Executive On $2.5 Fraudulent Scheme Against Investors
NEW HAVEN, Conn. - A reinsurance executive accused of engaging in a $2.5 million fraudulent scheme settled claims brought by the Securities and Exchange Commission on Jan. 11 after the SEC filed a complaint in Connecticut federal court (Securities and Exchange Commission v. David S. Haddad, et al., No. 18-00055, D. Conn.).



Federal Judge Grants Additional Discovery Extension To Reinsurer
NEW YORK - In a reinsurance coverage dispute for a trucking accident, a New York federal judge on Jan. 3 granted a two-month discovery deadline extension to a reinsurer (Endurance Assurance Corp. v. Florists' Mutual Insurance Co., et al., No. 16-09955, S.D. N.Y.).



Federal Judge Dismisses Case Over Insurers' Breach Of Policy For Failing To Pay
MILWAUKEE - In a dispute where a state insurance fund claimed that a policy above its own was reinsurance, a Wisconsin federal judge adopted on Dec. 29 the fund and insurers' joint stipulations for dismissal of the lawsuit alleging that the insurers breached their agreements with the fund by failing to pay a fire claim (State of Wisconsin Local Government Property Insurance Fund v. Lexington Insurance Co., et al., No. 15-142, E.D. Wis.).



Government Appeals Ruling On Yield Crop Exclusion For Reinsurance With FCIC
DENVER - The U.S. government on Dec. 12 filed a notice of appeal to the 10th Circuit U.S. Court of Appeals regarding a decision that a division of the U.S. Department of Agriculture improperly determined that a yield crop exclusion was not immediately available to farmers upon the passage of a farm bill for purposes of calculation in reinsurance coverage (Glenn Ausmus, et al. v. Sonny Perdue, et al., No. 16-01984, D. Colo., 2017 U.S. Dist. LEXIS 169305).