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LexisNexis® Mealey's™ Insurance Insolvency Legal News



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Panel: Kentucky Insurance Guaranty Association Liable For Miner's Black Lung Benefits
CINCINNATI - The Kentucky Insurance Guaranty Association (KIGA) should provide benefits under the Black Lung Benefits Act to a disabled miner now that a mine operator and its insurer are both insolvent, the Sixth Circuit U.S. Court of Appeals affirmed Sept. 29 (Island Fork Construction v. Jimmy Bowling, No. 16-4319, 6th Cir., 2017 U.S. App. LEXIS 18891).



Panel: Michigan Insurance Guaranty Association Failed To Pay Settlement Agreement
LANSING, Mich. - The Michigan Property & Casualty Guaranty Association (MPCIGA) could not raise any valid defense as to why it wrongfully failed to pay an amount owed to an estate by an insolvent insurer, a Michigan appeals panel ruled Oct. 12, affirming summary disposition to the estate (Dorothy Hassan v. Michigan Property & Casualty Guaranty Association, No. 332738, Mich. App., 2017 Mich. App. LEXIS 1593).



Health Care Provider Has No Right To File Case Against Insolvent Insurer, Panel Says
LANSING, Mich. - An injured person's health care provider has no independent statutory right to bring an action against an insolvent no-fault insurer for payment of personal injury protection (PIP) benefits, a Michigan appeals panel ruled Oct. 19, applying recent Michigan Supreme Court law (The Detroit Medical Center v. Michigan Property & Casualty Guaranty Association, et al., No. 326792, Mich. App., 2016 Mich. App. LEXIS 2596).



Panel Affirms Denial Of Disability Benefits Under Insolvent Insurer's Policy
SALT LAKE CITY - An accident did not cause a worker's degenerative arthritis, an Utah appeals panel ruled Oct. 13, declining to disturb the denial of the worker's permanent partial disability (PPD) compensation under an insolvent insurer's policy (Raymond M. Snyder v. Labor Commission, et al., No. 20160822-CA, Utah App., 2017 Utah App. LEXIS 197).



Workers' Comp Insurer Offers Discovery Plan In Suit With Insolvent Insurer
ATLANTA - A workers' compensation insurer proposes a stipulated discovery plan and scheduling order on Oct. 9 with the Georgia federal court in a dispute over whether its policies insured certain staffing companies for claims also tendered to an insolvent insurer (Georgia Insurers Insolvency Pool v. Sussex Insurance Co., No. 16-03975, N.D. Ga.).



Denied Motorist Coverage Meets Definition Of Uninsured Under Insolvent Insurer's Policy
INDIANAPOLIS - A vehicle involved in a car accident that has liability insurance but was denied coverage meets the definition of uninsured motor vehicle under an insolvent insurer's policy, an Indiana appeals panel ruled Sept. 25 (Indiana Insurance Guaranty Association v. Carlos A. Smith, No. 71A03-1703-CT-610, Ind. App., 2017 Ind. App. LEXIS 403).



Judge Refuses To Dismiss Recovery Claim On Settlement With State Guaranty Association
COLUMBIA, S.C. - A South Carolina federal judge on Sept. 20 denied a request to dismiss an insurer's claim seeking recovery of a portion of a settlement with the North Carolina Insurance Guaranty Association (NCIGA) in correspondence with below-deductible obligations under insurance policies (Companion Property and Casualty Insurance Co. v. Charles David Wood Jr., et al., No. 17-00514, D. S.C., 2017 U.S. Dist. LEXIS 152688).



Judge Declines To Dismiss Claims Against Bank Over Reinsurance Trust Mishandling
COLUMBIA, S.C. - An insurer sufficiently alleged claims for breach of contract, breach of fiduciary duty, negligence/gross negligence and negligent misrepresentation against a bank for its role as trustee of a reinsurance trust with an insolvent insurer, a South Carolina federal judge ruled Sept. 28, refusing to dismiss the claims (Accident Insurance Company Inc. v. U.S. Bank National Association, et al., No. 16-2621, D. S.C., 2017 U.S. Dist. LEXIS 159628).



Judge Issues Stipulations In Reinsurer, Liquidator's Breach Of Contract Suit
NEW YORK - A New York federal judge on Sept. 26 granted stipulations agreed upon by a reinsurer and the liquidator of The Home Insurance Co. with regard to claims and other issues in a dispute over reinsurance proceeds allegedly owed to the insurer's estate (Roger A. Sevigny v. Trygvesta Forsikring A/S, Trygvesta Forsikring A/S v. Cerberus Holding Company LLC., No. 16-04874, S.D. N.Y.).



Judge: Breach Of Duty Claim As To Funeral Trusts With Insolvent Insurers Is Barred
ST. LOUIS - A claim for determination of rights in and representation for the merchandise and services trust and a petition for a restitutionary award against trustees for breaching trustee duties relating to preneed funeral and cemetery trusts under policies with insolvent insurers are barred by the doctrine of res judicata, a Missouri federal judge ruled Sept. 28 (Winner Road Properties LLC v. BMO Harris Bank, N.A., No. 16-1395, E.D. Mo., 2017 U.S. Dist. LEXIS 161300).



Panel: Environmental Claim To Insolvent Insurer Is Barred By Res Judicata
NEW YORK - A New York appeals court affirmed on Oct. 12 that an insured's environmental claim submitted to an insolvent insurer is barred by res judicata and collateral estoppel, based on prior rulings on the same claim and issues (Northern States Power Co. v. Maria T. Vullo, No. 41294/86, N.Y. App. Div., 1st Dept., 2017 N.Y. App. Div. LEXIS 7195).



Federal Judge Remands Tennessee Insurance Guaranty Association Reimbursement Suit
NASHVILLE, Tenn. - A Tennessee federal judge on Sept. 25 remanded a reimbursement dispute filed by the Tennessee Insurance Guaranty Association (TIGA) over a workers' compensation claim against book publishers because diversity jurisdiction is not present (Tennessee Insurance Guaranty Association v. Penguin Random House LLC, et al., No. 17-1070, M.D. Tenn., 2017 U.S. Dist. LEXIS 158988).



CIGA Appeals Judgment On Reimbursement Sought Against It For Workers' Comp Claims
LOS ANGELES - The California Insurance Guarantee Association (CIGA) on Oct. 9 cross-appealed to the Ninth Circuit U.S. Court of Appeals challenging a ruling vacating and setting aside reimbursement demands made to it under workers' compensation insurance policies (California Insurance Guarantee Association v. Don J. Wright, et al., No. 15-01113, C.D. Calif.).



Colorado High Court Grants Dismissal Of CIGA, Insured Appeal Over Recoupment
DENVER - The Colorado Supreme Court on Oct. 12 granted the voluntary dismissal of a cross-appeal of a decision finding that a net worth provision allowed the Colorado Insurance Guaranty Association (CIGA) to recoup payments it made to an insured employer's injured employee from the employer because its net worth exceeded $25 million (Sunstate Equipment Co. LLC v. Colorado Insurance Guaranty Association, No. 2016SC384, Colo. Sup., 2017 Colo. LEXIS 957).



Government: Jurisdiction Lacking In Liquidators' Suit Over Reinsurance Funds
COLUMBIA, S.C. - The U.S. government says in its Sept. 26 reply brief in a South Carolina federal court that liquidators for a failed South Carolina Patient Protection and Affordable Care Act (ACA) co-operative insurer failed to establish jurisdiction in their lawsuit alleging improper withholding of reinsurance payments from and setting off of debts owed by the government (Raymond G. Farmer, et al. v. United States of America, et al., No. 17-00956, D. S.C.).



Reinsurer Argues Dispute With Insolvent Insurer Must Be Arbitrated Or Transferred
AUSTIN, Texas - A New Zealand reinsurer argues in a Sept. 12 reply brief that a Texas federal court should transfer venue or compel arbitration of a reinsurance agreement dispute with an insolvent insurer because a breach of contract claim is subject to an arbitration clause (Gramercy Insurance Co. v. Contractor's Bonding Ltd., No. 17-723, W.D. Texas).



Judge Approves Insurer's Liquidator's Report On Allowed, Disallowed Claims
HARRISBURG, Pa. - In the liquidation of Reliance Insurance Co., a Pennsylvania trial judge on Oct. 4 approved the liquidator's report and recommendations on guaranty association (GA) notices of determination (NODs) through July 31, 2017, for disallowed and allowed claims (In re: Reliance Insurance Co. in liquidation, No. 1 REL 2001, Pa. Cmwlth.).



Home's Liquidator Seeks Approval Of $1.7M Asbestos Settlement With Insured
CONCORD, N.H. - The liquidator for The Home Insurance Co. on Oct. 23 asked a New Hampshire trial court to approve a $1.7 million settlement with an insured to resolve asbestos claims under three insurance policies (In the Matter of the Liquidation of The Home Insurance Co., No. 03-E-0106, N.H. Super., Merrimack Co.).



Mississippi High Court: Members Of Failed Self-Insurers Fund Liable For Claims
JACKSON, Miss. - Former members of a failed self-insurers fund are liable for a pro rata share of workers' compensation claims, the Mississippi Supreme Court ruled Aug. 31, affirming summary judgment in favor of the Mississippi Workers' Compensation Group Self-Insurer Guaranty Association because indemnity agreements hold the former members responsible to pay (Scott Penn Inc., et al. v. Mississippi Workers' Compensation Group Self-Insurer Guaranty Association, No. 2016-CA-00944-SCT, Miss. Sup., 2017 Miss. LEXIS 353).



Federal Judge Denies Limiting Discovery In Workers' Comp Suit With Insolvent Insurer
ATLANTA - In a dispute over whether workers' compensation policies insured certain staffing companies for claims also tendered to an insolvent insurer, a Georgia federal judge on Sept. 20 denied a proposed case management approach for limited discovery (Georgia Insurers Insolvency Pool v. Sussex Insurance Co., No. 16-cv-03975, N.D. Ga.).



Judge Denies Insolvent Insurer's Bid For Defense Costs Based On Underlying Settlement
KANSAS CITY, Kan. - A Kansas federal judge on Aug. 29 overruled an insolvent directors and officers (D&O) insurer's request for litigation-related fees and costs pursuant to an underlying settlement agreement between a bank's receiver and the bank's directors and officers (BancInsure Inc. v. Carl L. McCaffree, et al., No. 12-2110, D. Kan., 2017 U.S. Dist. LEXIS 138629).



Federal Court Stays Insolvent Insurer's ACA Risk-Corridor Suit
WASHINGTON, D.C. - Judgment on any ruling that the government improperly withheld funds from a bankrupt Patient Protection and Affordable Care Act (ACA) insurer would need to wait until resolution of pending appeals of risk-corridor rulings, a federal claims court judge held Sept. 5 in staying the case (Doug Ommen, et al. v. United States, No. 17-957, Fed. Clms., 2017 U.S. Claims LEXIS 1081).



Insurer's Liquidators Oppose Dismissal Of Withholding Reinsurance Funds Claims
COLUMBIA, S.C. - Liquidators for a failed South Carolina Patient Protection and Affordable Care Act (ACA) co-operative insurer in a Sept. 5 brief in South Carolina federal court oppose the U.S. government's motion to dismiss their lawsuit alleging the improper withholding of reinsurance payments from and setting off debts owed by the government (Raymond G. Farmer, et al. v. United States of America, et al., No. 17-00956, D. S.C.).



Insolvent Insurer's Owner's Federal Claims Are Barred By Limitations, Judge Says
ATLANTA - An insolvent insurer's owner's federal claims against the Georgia insurance commissioner, acting as the insurer's liquidator, and his deputy liquidator in a civil action are barred by the two-year statute of limitations, a Georgia federal judge ruled Aug. 31 (Richard O'Dom v. Ralph T. Hudgens, et al., No. 16-3911, N.D. Ga., 2017 U.S. Dist. LEXIS 140514).



Michigan High Court Sends Dispute With Insolvent Insurer Back For Reconsideration
LANSING, Mich. - The Michigan Supreme Court on Sept. 12 vacated an appeals court's decision finding that a trial court erred in not considering deposition testimony in determining whether a genuine issue of material fact existed in a coverage dispute against an insolvent insurer over personal injury protection (PIP) benefits (The Detroit Medical Center v. Michigan Property & Casualty Guaranty Association, et al., No. 154363, Mich. Sup., 2017 Mich. LEXIS 1622).



Insolvent Insurers' Receiver Seeks Clarification On Panel's Trust Law Remedies Ruling
ST. LOUIS - In a dispute over the mishandling of funds belonging to insolvent funeral insurers, a receiver and state guaranty associations petitioned for panel rehearing on Sept. 14 so that the Eighth Circuit U.S. Court of Appeals can clarify that it was not attempting to limit trust law remedies available to the trial court on remand (Jo Ann Howard and Associates, P.C., et al. v. J. Douglas Cassity, et al., Nos. 15-3872 & 15-3878, 8th Cir., 2017 U.S. App. LEXIS 15621).



Insolvent Insurer Opposes Lifting Federal Court Case Stay Pending Receivership
BOISE, Idaho - A trust bank's request to lift a stay on its coverage case against an insolvent insurer pending the insurer's receivership proceedings and the bank's request for a preliminary injunction should be denied, the insolvent insurer argues in a Sept. 8 response in Idaho federal court (Idaho Trust Bank v. BancInsure Inc., et al., No. 12-00032, D. Idaho).



Special Deputy Receiver Opposes Arbitration In $1M Reinsurance Dispute
AUSTIN, Texas - A special deputy receiver in a Sept. 5 filing in a Texas federal court opposes a New Zealand reinsurer's motion to transfer or stay a $1 million claim under a reinsurance agreement pending arbitration because the forum-selection clause and arbitration provision do not apply (Gramercy Insurance Co. v. Contractor's Bonding Ltd., No. 17-723, W.D. Texas).



Reinsurer Says It And Home's Liquidator Agree To Stipulation In Breach Of Contract Suit
NEW YORK - A reinsurer on Sept. 8 wrote to a New York federal court advising it that the reinsurer and the liquidator of The Home Insurance Co. have agreed on a stipulation proposed to address claims and other issues in a dispute over reinsurance proceeds allegedly owed to the insurer's estate (Roger A. Sevigny v. Trygvesta Forsikring A/S, Trygvesta Forsikring A/S v. Cerberus Holding Company, LLC., No. 16-04874, S.D. N.Y.).



New Hampshire Justice Approves Home's Liquidator's $16M Asbestos Settlements
CONCORD, N.H. - A New Hampshire justice on Aug. 22 approved two settlements totaling more than $16 million to resolve asbestos claims against insureds under seven insurance policies issued by an insolvent insurer (In the Matter of the Liquidation of The Home Insurance Co., No. 03-E-0106, N.H. Super., Merrimack Co.).



New Hampshire Justice Approves Home's Liquidator's Settlement With Insured
CONCORD, N.H. - A New Hampshire justice on Sept. 3 approved a settlement agreement of $178,545 between the liquidator for The Home Insurance Co. and an insured (In the matter of the liquidation of The Home Insurance Co., No. 03-E-0106, N.H. Super., Merrimack Co.).



8th Circuit Finds Insurers' Receiver's Trust-Law Claim Should Be Tried By Court
ST. LOUIS - In a dispute over the mishandling of funds belonging to insolvent funeral insurers, the Eighth Circuit U.S. Court of Appeals ruled that a trust-law claim in equity should have been tried to a trial judge rather than a jury (Jo Ann Howard and Associates, P.C., et al. v. J. Douglas Cassity, et al., Nos. 15-3872 & 15-3878, 8th Cir., 2017 U.S. App. LEXIS 15621).



Panel: Assignee's Breach Of Contract Suit Against Reinsurer Is Untimely
CHICAGO - A breach of contract lawsuit filed by an assignee of certain reinsurance receivables rights from an insolvent insurer was untimely, the Seventh Circuit U.S. Court of Appeals affirmed Aug. 7, finding that 215 Illinois Insurance Code Statute 5/206, 215 ILCS 5/206, does not provide that a liquidator may wait until the end to net the debits and credits (Pine Top Receivables of Illinois, LLC v. Banco De Seguros Del Estado, No. 16-3499, 7th Cir., 2017 U.S. App. LEXIS 14492).



Judge Declines To Stay Coverage Action Pending Insurer's Liquidation
ST. LOUIS - A Missouri federal judge on Aug. 16 refused to stay a professional liability insurer's dispute against an insolvent insurer over wrongful act claims submitted by the insolvent insurer because she found that the contractual issues are not pivotal to the underlying state court liquidation action (Allied World Surplus Lines Insurance Co. v. Galen Insurance Co., et al., No. 17-1185, E.D. Mo., 2017 U.S. Dist. LEXIS 130426).



Judge Enters Judgment On Reimbursement Sought Against CIGA For Workers' Comp Claims
LOS ANGELES - A California federal judge entered judgment on Aug. 9 vacating and setting aside three reimbursement demands made to the California Insurance Guarantee Association (CIGA) under workers' compensation insurance policies (California Insurance Guarantee Association v. Thomas E. Price, et al., No. 15-01113, C.D. Calif.).



Tennessee Insurance Guaranty Association Seeks Remand Of Reimbursement Suit
NASHVILLE, Tenn. - The Tennessee Insurance Guaranty Association (TIGA) argues in an Aug. 14 brief that a Tennessee federal court should remand its reimbursement dispute over a workers' compensation claim against book publishers because diversity jurisdiction is not present (Tennessee Insurance Guaranty Association v. Penguin Random House LLC, et al., No. 17-1070, M.D. Tenn.).



Reinsurer Tells Federal Court Defunct Insurer Agreed To Arbitrate Reinsurance Case
AUSTIN, Texas - A New Zealand reinsurer in an Aug. 22 motion asks a Texas federal court to transfer venue to the state of Georgia or compel arbitration of a reinsurance agreement dispute with an insolvent insurer based upon the agreement's arbitration clause (Gramercy Insurance Co. v. Contractor's Bonding Ltd., No. 17-723, W.D. Texas).



Government Seeks Dismissal Of Failed ACA Insurer's Claims Of Withholding Reinsurance Funds
COLUMBIA, S.C. - The U.S. government on Aug. 22 moved to dismiss a lawsuit filed by an insurer's liquidators in a South Carolina federal court, where it is accused of the improper withholding of reinsurance payments from, and setting off debts owed by, the failed South Carolina Patient Protection and Affordable Care Act (ACA) co-operative insurer (Raymond G. Farmer, et al. v. United States of America, et al., No. 17-cv-00956, D. S.C.).



Judge Issues Order On Sealing Docs In Workers' Comp Insurer, Insolvent Insurer Dispute
ATLANTA - In a dispute over whether workers' compensation policies insured certain staffing companies for claims also tendered to an insolvent insurer, a Georgia federal judge issued a protective order on Aug. 28 on the procedures for sealing confidential materials (Georgia Insurers Insolvency Pool v. Sussex Insurance Co., No. 16-3975, N.D. Ga.).



Trust Bank Seeks Lift Of Stay In Insurer's Receivership, Seeks Preliminary Injunction
BOISE, Idaho - A trust bank on Aug. 14 moved for an order in an Idaho federal court to lift a stay pending an insurer's receivership proceedings and for a preliminary injunction, arguing that the receiver has ignored a summary judgment ruling for more than two years and recommended that the insured take nothing (Idaho Trust Bank v. BancInsure Inc., et al., No. 12-00032, D. Idaho).



Justice Places Fiduciary Insurance Company Of America Into Liquidation
JAMAICA, N.Y. - A New York justice on July 25 ordered Fiduciary Insurance Company of America to be placed into liquidation and named the state's financial services superintendent as liquidator (In the matter of the application of Maria T. Vullo, Superintendent of Financial Services of New York for an order to take possession and liquidate Fiduciary Insurance Company of America, No. 703264/2017, N.Y. Sup., Queens Co.).



Insurer's Receiver Asks Trial Court To Set Date For Objection On Claims Denial
OKLAHOMA CITY - An insolvent insurer's receiver on Aug. 8 moved an Oklahoma trial court to provide a deadline of notice for any objection to his claims evaluation and recommendations in the insurer's liquidation proceeding (State of Oklahoma, ex rel. John Doak v. Pegasus Insurance Company Inc., No. CJ-2010-5131, Okla. Dist., Oklahoma Co.).



Judge Terminates Policy Coverage In SeniorSure Healthplan Receivership
OKLAHOMA CITY - An Oklahoma judge on Aug. 10 terminated policy coverage and authorized the return of unearned premiums to insureds in the receivership of SeniorSure Healthplan Inc. (State of Oklahoma, ex rel. John D. Doak v. SeniorSure Healthplan Inc., No. CJ-2017-3547, Okla. Dist., Okla. Co.).



Judge Approves Payment Of Reinsurance To Insured In Insurer's Liquidation
HARRISBURG, Pa. - In the liquidation of Reliance Insurance Co., a Pennsylvania trial judge on Aug. 9 approved a direct payment of $269,341 in proceeds by a guarantor of a reinsurer to an insured (In re: Reliance Insurance Co. in liquidation, No. 1 REL 2001, Pa. Cmwlth.).



Judge Puts An End To Atlantic Preferred Insurance's Liquidation
TALLAHASSEE, Fla. - A Florida trial judge closed the estate of Atlantic Preferred Insurance Co. Inc. on June 7, directing final discharge and authorizing destruction of obsolete records in the insurer's liquidation (In re Atlantic Preferred Insurance Company Inc., No. 2006-CA-001083, Fla. Cir., 2nd Cir., Leon Co.).



Trial Judge Closes Estate Of Florida Workers' Compensation Fund
TALLAHASSEE, Fla. - A Florida trial judge ordered the closure of the receivership for Florida Workers' Compensation Fund (FWCF) on June 27 and ordered the receiver to retain $570,625.45 as a reserve for "wind up" expenses (In Re: Receivership of Florida Workers' Compensation Fund, No. 1998-CA-3962, Fla. Cir., Leon Co.).



Judge Closes Estate Of HomeWise Preferred Insurance Company
TALLAHASSEE, Fla. - A Florida judge on June 27 directed the final discharge and authorized the destruction of obsolete records in the receivership of HomeWise Preferred Insurance Co., thus, effectively closing the insurer's estate (In re: Receivership of HomeWise Preferred Insurance Co., No. 2011-CA-2404, Fla. Cir., 2nd Jud., Leon Co.).