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LexisNexis® Mealey's™ Insurance Insolvency Legal News



Headline Insurance Insolvency Legal News from LexisNexis®



 



New York Appeals Panel: Agent's Action Was Not Cause Of Insolvent Insurer's Losses
ALBANY, N.Y. - An insurance agent's conduct was not the proximate cause of an insolvent insurer's losses under surety bonds, the Third Department New York Supreme Court Appellate Division held March 8, affirming the dismissal of the insurer's negligence, breach of contract and breach of fiduciary duty claims (Frontier Insurance Co. in liquidation v. Merritt & McKenzie Inc., No. 524078, N.Y. Sup., App. Div., 3rd Dept., 2018 N.Y. App. Div. LEXIS 1525).



Insolvent Insurer's Former Employee Petitions U.S. High Court On Defamation Suits
WASHINGTON, D.C. - A former employee of an insolvent insurer on Feb. 12 petitioned the U.S. Supreme Court on whether, in defamation suits, "a court must distinguish between false and defamatory statements of 'fact' and false and defamatory statement of 'opinion,' with the latter afforded protection from liability for defamation under the First Amendment" (Jamus Jacobs v. The Oath for Louisiana, et al., No. 17-1146, U.S. Sup., 2018 U.S. S. Ct. Briefs LEXIS 594).



Panel Reverses Judgment On Rehabilitator's Negligence Claim Against School Board
FRANKFORT, Ky. - An insured vs. insured exclusion bars coverage for a deputy rehabilitator's negligence claims against a school board association, a majority of the Kentucky Court of Appeals ruled March 9; however, the majority affirmed that insurance coverage existed for identical claims against a board of trustees (Certain Underwriters at Lloyd's, London v. Joseph N. Pope Jr., et al., No. 2016-CA-001028-MR, Ky. App., 2018 Ky. App. Unpub. LEXIS 131).



Judge Allows Receiver To Amend Negligence Suit Against Reinsurance Intermediaries
OKLAHOMA CITY - An Oklahoma federal judge on March 8 granted an insolvent insurer's receiver's request for leave to amend his negligence lawsuit against reinsurance intermediaries for their alleged negligence in providing reinsurance services to the insurer (State of Oklahoma, et al. v. Axiom Re LP, et al., No. 17-0484, W.D. Okla., 2018 U.S. Dist. LEXIS 38131).



Panel: Arbitration Award Was Not In Violation Of Texas Insurance Guaranty Act
DALLAS - An arbitration award against contractors was not in direct violation of the Texas Property and Casualty Insurance Guaranty Act when their insurer became impaired, a Texas appeals panel ruled Feb. 28 (The Holmes Builders at Castle Hills Ltd., et al. v. Alfred H. Gordon, et al., No. 05-16-00887, Texas App., 5th Dist., 2018 Tex. App. LEXIS 1572).



Administrative Services Provider Moves To Arbitrate Dispute With Insurer's Liquidator
FRANKFORT, Ky. - After an earlier order denying arbitration was vacated on appeal, an administrative services provider on Feb. 26 filed a renewed motion to compel arbitration of a dispute with an insolvent insurer's liquidator (Nancy G. Atkins v. CGI Technologies and Solutions Inc., No. 16-00037, E.D. Ky.).



Bankruptcy Judge Approves Bid Procedures Deal Between Reinsurance Firm, Creditors
WILMINGTON, Del. - In a Chapter 11 proceeding filed by a reinsurance firm, a Delaware bankruptcy judge on Feb. 28 approved bidding procedures between the firm, unsecured creditors and its stalker horse bidder in a planned sale of the reinsurance firm's operating subsidiary's stock (In re Scottish Holdings Inc., et al., No. 18-10160, D. Del. Bkcy.).



Stockholders Seek Class Cert In Suit Against Bankrupt Reinsurance, Insurance Provider
WILMINGTON, Del. - Common stockholders of a bankrupt insurance and reinsurance services company on March 2 moved for certification of their class and appointment of class representatives and counsel in a Delaware bankruptcy court lawsuit in which the company is accused of laying off employees 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.).



Idaho Insurance Guaranty Association Seeks To Dismiss Bank's Coverage Dispute
BOISE, Idaho - The Idaho Insurance Guaranty Association (IIGA) on March 9 moved in an Idaho federal court to dismiss for lack of jurisdiction a lawsuit brought by a trust bank against its insolvent insurer (Idaho Trust Bank v. BancInsure Inc., et al., No. 12-00032, D. Idaho).



Liquidator Seeks Default Judgment On Third-Party Breach Of Contract Claim
NEW YORK - In a New York federal court dispute over reinsurance proceeds allegedly owed to an insolvent insurer, a liquidator on Jan. 31 requested that a default judgment be entered on his third-party breach of contract claim against a holding company (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 Closes Case Between Insurer, Insolvent Insurer Pending Settlement Talks
ATLANTA - A Georgia federal judge on Feb. 28 closed, rather than staying, a dispute between a workers' compensation insurer over whether its policies insured certain staffing companies for claims also tendered to an insolvent insurer pending the parties' ongoing settlement negotiations (Georgia Insurers Insolvency Pool v. Sussex Insurance Co., No. 16-03975, N.D. Ga.).



Doctor Seeks Stay Of Malpractice Suit Based On Insurer's Liquidation Order
WILMINGTON, Del. - A doctor on Feb. 20 in a Delaware trial court moved to stay a medical malpractice case against him and hospitals pursuant to a liquidation order issued against his insurer (Jocelyn Rice v. Bayhealth Medical Center Inc., et al., No. N16C-10-158, Del. Super.).



Pedestrian Sues New Jersey Insurance Guaranty Association For Personal Injuries
PATERSON, N.J. - A New Jersey pedestrian injured from a hit-and-run vehicle accident alleges in a March 6 complaint filed in a New Jersey court that the state's insurance guaranty association is responsible for her medical costs (Morghan Tisdol v. New Jersey Property Liability Insurance Guaranty Association, No. PAS-L-000768-18, N.J. Super., Passaic Co.).



6th Circuit Rejects Insurer's Liquidator's Reverse-Preemption Argument In Arbitration Suit
CINCINNATI - In a dispute between an insolvent insurer's liquidator and an administrative services provider over whether work for the insurer should be arbitrated, the Sixth Circuit U.S. Court of Appeals held Feb. 9 that the McCarran-Ferguson Act does not reverse-preempt the enforcement of a contractual arbitration clause under the Federal Arbitration Act (FAA) (Nancy G. Atkins, liquidator of Kentucky Health Cooperative Inc. v. CGI Technologies and Solutions Inc., No. 17-5506, 6th Cir., 2018 U.S. App. LEXIS 3130).



Magistrate Judge Lifts Stay Against Idaho Insurance Guaranty Association
BOISE, Idaho - An Idaho federal magistrate judge on Feb. 16 lifted a stay against the Idaho Insurance Guaranty Association (IIGA) in a trust bank's coverage dispute but declined to lift a stay and grant a preliminary injunction against an insolvent insurer (Idaho Trust Bank v. BancInsure Inc., et al., No. 12-00032, D. Idaho, 2018 U.S. Dist. LEXIS 26168).



Panel: New Jersey Insurance Guaranty Association Not Subject To Attorney Fees
TRENTON, N.J. - The New Jersey Property-Liability Insurance Guaranty Association (NJPLIGA) is not subject to awards of attorney fees, a state appeals panel affirmed Jan. 26 because attorney fees are not a "covered claim" paid by the NJPLIGA (Rafaela A. Guichardo v. New Jersey Property-Liability Insurance Guaranty Association, No. A-4410-15T3, N.J. Super., App. Div., 2018 N.J. Super. Unpub. LEXIS 196).



Insurer's Liquidator Has No Interest To Land, New York Bankruptcy Judge Says
WHITE PLAINS, N.Y. - Reversionary interests in land parcels are property of a reorganized debtor, and an insurer's liquidator is precluded from interfering with those interests, a New York federal bankruptcy judge ruled Feb. 15, ordering transfer of title to the reorganized debtor (In re: Frontier Insurance Group Inc., et al., Chapter 11, No. 05-36877, Benjamin Lawsky v. Frontier Insurance Group LLC, et al., Adv. Pro. No. 14-9022, S.D. N.Y. Bkcy., 2018 Bankr. LEXIS 442).



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.).



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.).



Panel: Auto Insurer Is Liable For Additional Insured's PIP Benefits
TRENTON, N.J. - An auto insurer is liable for personal injury protection (PIP) benefits for an unnamed additional insured under terms of a voided insurance contract, a New Jersey appeals panel affirmed Feb. 8 (Tyrone S. Henry Sr., et al. v. Santosh S. Bhowmik, et al., No. A-3331-15T4, N.J. Super., App. Div., 2018 N.J. Super. Unpub. LEXIS 286).



Claimants Seek Benefits From New Jersey Insurance Guaranty Association
TRENTON, N.J. - Two claimants allege in a Feb. 16 complaint filed in the New Jersey federal court that they are entitled to benefits from the New Jersey Property Liability Guaranty Association (NJPLIGA) for injuries arising from a motor vehicle accident involving an unidentified motor vehicle owner and operator (Porfirio Torres, et al. v. New Jersey Property Liability Insurance Guaranty Association, No. 18-02290, D. N.J.).



Pedestrian Seeks Benefits From New Jersey Insurance Guaranty Association
NEWARK, N.J. - A pedestrian injured in a car accident filed a complaint on Jan. 2 in a New Jersey court against the state's insurance guaranty association, seeking personal injury protection (PIP) benefits (Deborah Yarrell v. New Jersey Property-Liability Insurance Guaranty Association, No. ESX-L-000007-18, N.J. Super., Essex Co.).



Pedestrian Sues New Jersey Insurance Guaranty Association For PIP Benefits
NEWARK, N.J. - In a personal injury lawsuit, a pedestrian filed a complaint on Jan. 16 in a New Jersey state court alleging that the state's insurance guaranty association is wrong to refuse him personal injury protection (PIP) benefits (Edward DeVaughn v. New Jersey Property-Liability Insurance Guaranty Association, No. ESX-L-000318-18, N.J. Super., Essex Co.).



Judge Rejects Defunct ACA Insurer's Risk-Adjustment Program Challenge
BOSTON - A now-defunct Patient Protection and Affordable Care Act (ACA) health insurer's complaints about the law's risk-adjustment program seek impermissible retroactive rule making or fail to allege that the original rules were arbitrary or capricious, a federal judge in Massachusetts held Jan. 30 (Minuteman Health Inc. v. United States Department of Health and Human Services, et al., No. 16-11570, D. Mass., 2018 U.S. Dist. LEXIS 14727).



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.).



Panel Stays $5M Negligence Dispute Based On Insolvent Insurer's Liquidation Order
HARRISBURG, Pa. - Pursuant to a liquidation order of an insolvent insurer, the Pennsylvania Superior Court on Feb. 12 issued an automatic stay of a negligence dispute against a hospital, a radiology group and a doctor in which a jury awarded $5 million to a woman (Anita E. Tong-Summerford v. Abington Memorial Hospital and Radiology Group of Abington, P.C., et al., Nos. 3114 EDA 2016 & 3310 EDA 2016, Pa. Super., 2018 Pa. Super. LEXIS 113).



Geo. V. Hamilton Settles Dispute With Insurance Association For $6 Million
PITTSBURGH - A Pennsylvania insurance guaranty association will pay $6 million to the asbestos trust planned in the Chapter 11 case of debtor Geo. V. Hamilton Inc. to resolve a coverage dispute involving five policies issued to Hamilton by now-insolvent insurers, with a federal bankruptcy judge approving the deal Feb. 14 (In re Geo. V. Hamilton, Inc., No. 15-23704, W.D. Pa. Bkcy.).



Kaiser Gypsum Debtors Agree To Claim Amount In Insolvent Insurers' Run-Off
CHARLOTTE, N.C. - A North Carolina federal bankruptcy judge on Feb. 17 approved in a minute order a settlement between Chapter 11 debtors Kaiser Gypsum Co. Inc. and Hanson Permanente Cement Inc. and the joint scheme administrator for two insolvent British insurers, setting claim values for the debtors in the insurers' run-off proceedings (In re Kaiser Gypsum Company, Inc., et al., No. 16-31602, W.D. N.C. Bkcy.).



$750,000 For Claim In Insurer's Liquidation Is Best Deal, Bestwall Says
CHARLOTTE, N.C. - Chapter 11 debtor Bestwall LLC is willing to take $750,000 in cash now from a purchaser of a defunct insurer's asbestos policy rather than wait for years to see if it can collect the policy's remaining $3.75 million from the insurer's liquidation proceedings, Bestwall says in a Feb. 1 motion in North Carolina federal bankruptcy court (In re Bestwall LLC, No. 17-31795, W.D. N.C. Bkcy.).



Florida Judge Orders Insurance Company Of The Americas Into Liquidation
TALLAHASSEE, Fla. - Insurance Company of the Americas (ICA) was ordered into liquidation on Jan. 24 by a Florida trial judge, and the Florida Department of Financial Services (FDFS) was named receiver (In re: The Receivership of Insurance Company of the Americas, No. 2018 CA 00125, Fla. Cir., Leon Co.).



Pennsylvania Judge Orders Healthcare Providers Insurance Exchange Into Liquidation
HARRISBURG, Pa. - Healthcare Providers Insurance Exchange (HPIX) was ordered into liquidation on Jan. 12 by a Pennsylvania trial judge, and the state's insurance commissioner was appointed liquidator (Jessica K. Altman v. Healthcare Providers Insurance Exchange, No. 1 HPI 2017, Pa. Cmwlth.).



Pennsylvania Trial Judge Approves Final Accounting For First Sealord Surety Inc.
HARRISBURG, Pa. - A final accounting and distributions of assets for the liquidation of First Sealord Surety Inc. was approved by a Pennsylvania judge on Dec. 6 (In re: First Sealord Surety Inc. in liquidation, No. 1 FSS 2012, Pa. Cmwlth.).



New York Court Issues Ancillary Receivership Against Guarantee Insurance Co.
NEW YORK - A New York justice on Jan. 26 granted an order of ancillary receivership against Guarantee Insurance Co. and appointed the state's superintendent of financial services as receiver (In the receivership of Guarantee Insurance Co., No. 453158/2017, N.Y. Sup., New York Co.).



Insurer Responds To Home Liquidator's Settlement Of Lead Bodily Injury Claims
CONCORD, N.H. - Responding to a $200,000 settlement by the liquidator of The Home Insurance Co. with an additional insured on lead bodily injury claims, another insurer in a Jan. 4 filing tells a New Hampshire trial court that it reserves its rights to contribution claims (In the Matter of the Liquidation of The Home Insurance Co., No. 03-E-0106, N.H. Super., Merrimack Co.).



Panel Declines To Reopen Insurer's Liquidation For Decades-Old Proofs Of Claim
TRENTON, N.J. - A Michigan state road agency cannot reopen the liquidation of Integrity Insurance Co. to recover payouts from car accident claims, a New Jersey appeals panel affirmed Jan. 19, finding that the liquidation was properly finalized (In the matter of the liquidation of Integrity Insurance Co., No. A-3285-15T3, N.J. Super., App. Div., 2018 N.J. Super. Unpub. LEXIS 134).



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).



Bankruptcy Federal Judge Approves Insolvent Mortgage Insurer's Reorganization
WILMINGTON, Del. - A Delaware federal bankruptcy judge on Jan. 9 confirmed an insolvent mortgage insurer's Chapter 11 reorganization over objections from the Office of the U.S. Trustee and Illinois regulators (In re: Triad Guaranty Inc., Chapter 11, No. 13-11452, D. Del. Bkcy.).



Panel Affirms Ending Of Benefits Paid By Insurance Guaranty Association
BATON ROUGE, La. - In a workers' compensation case, a Louisiana appeals panel on Jan. 8 upheld the termination of indemnity and medical benefits paid by the Kentucky Insurance Guaranty Association (KIGA) because there was no connection between an employee's multiple sclerosis (MS) diagnosis and work accident (Kym Hurst v. Cirrus Allied LLC and Kentucky Insurance Guaranty Association, No. 2017 CA 0731, La. App., 1st Cir., 2018 La. App. LEXIS 43).



Florida High Court Ends Workers' Comp Suit Review Against Insolvent Insurer
TALLAHASSEE, Fla. - The Florida Supreme Court on Dec. 29 approved the voluntary dismissal of a review in a workers' compensation lawsuit filed by an employer and its insolvent insurer against a claimant (Laura Stewart v. Florida Workers' Compensation Insurance Guaranty Association, et al., No. SC17-1757, Fla. Sup., 2017 Fla. LEXIS 2568).



Judicial Notice Of Documents Addressed In Case Between Insolvent Insurer, Former Owner
WILMINGTON, Del. - In a dispute between an insolvent insurer and the insurer's former owner who is now in prison for wire fraud, a Delaware master in chancery on Jan. 18 recommended that the court take judicial notice of certain documents and statements pertaining to the insurer's liquidation proceeding and the owner's criminal trial (Indemnity Insurance Corp., RRG v. Jeffrey Cohen, C.A. No. 8985-CB, Del. Chanc., 2018 Del. Ch. LEXIS 16).



Trial Judge Approves Final Notices Of Determinations In Insurer's Liquidation
HARRISBURG, Pa. - A Pennsylvania trial judge on Jan. 17 approved a liquidator's application on her recommendation of final life and health guaranty association (L&H GAs) omnibus notices of determinations (NODs) in Reliance Insurance Co.'s liquidation proceeding (In re: Reliance Insurance Co. in liquidation, No. 1 REL 2001, Pa. Cmwlth.).



Insurance Commissioner Files Accounting Report In Insurer's Liquidation
ST. THOMAS, Virgin Islands - A Virgin Islands insurance commissioner filed an accounting and status report on Dec. 29 as requested by a Virgin Islands federal judge in a previous order discharging the commissioner as liquidator of an insolvent insurer (In the matter of Phoenix Fire and Marine Insurance Company Ltd., No. 1991-271, D. Virgin Islands).



Judge Approves Liquidator's Recommendation Of $27M For Notices Of Determination
HARRISBURG, Pa. - A Pennsylvania judge on Dec. 6 approved a liquidator's recommendation of a total allowed amount of $27 million for 256 notices of determinations (NODs) in Reliance Insurance Co.'s liquidation proceeding (In re: Reliance Insurance Co. in liquidation, No. 1 REL 2001, Pa. Cmwlth.).



Judge Dismisses Negligence Case Against Insolvent Insurer's Former Directors
SALT LAKE CITY - A Utah federal judge on Dec. 27 dismissed a negligence and breach of fiduciary duty dispute filed by the liquidator of an insolvent insurer against the insurer's former directors and officers (Western Insurance Co. v. Dick L. Rottman, et al., No. 13-00436, D. Utah).



Actuary Company Answers Negligence Claim By Insurer's Receiver In Federal Court
OKLAHOMA CITY - An actuary services provider and its chief executive officer on Dec. 18 responded to a second amended complaint filed by an insolvent insurer's receiver in an Oklahoma federal court, in which the receiver alleges failure to properly investigate and accurately report on the insurer's financial standing and reinsurance contracts (Oklahoma ex rel., John D. Doak v. CTK Actuarial Services Inc., No. 17-371, W.D. Okla.).



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.).



Family Sues New Jersey Insurance Guaranty Association For Benefits
NEWARK, N.J. - A New Jersey mother and her minor daughter filed a personal injury lawsuit on Jan. 22 against a driver and the state's insurance guaranty association, alleging that they are entitled to uninsured motorist benefits for the driver's negligence (Shamya Tillery, et al. v. Lynnes Nissan, et al., No. ESX-L-000497-18, N.J. Super., Essex Co.).



Bicyclist Sues New Jersey Insurance Guaranty Association For Injuries
NEWARK, N.J. - A New Jersey man alleges in a Jan. 8 complaint filed in a New Jersey state court that the state's insurance guaranty association is responsible for his damages arising out of an accident with an uninsured driver (Allan Smith v. New Jersey Property Liability Insurance Guaranty Association, No. N/a, N.J. Super., Essex Co.).



Taxi Passenger Sues New Jersey Insurance Guaranty Association
PATERSON, N.J. - A passenger in a car accident alleges in a Dec. 14 complaint that the New Jersey Property-Liability Insurance Guaranty Association (NJPLIGA) is responsible for her personal injuries (Rylent Lawrence v. The New Jersey Property-Liability Insurance Guaranty Association, et al., No. PAS-L-004066-17, N.J. Super., Passaic Co.).



Man Sues New Jersey Insurance Guaranty Association For Injuries
NEWARK, N.J. - A New Jersey man seeks damages from the state's insurance guaranty association in a Nov. 21 complaint filed in a New Jersey trial court for personal injuries arising out of a car accident (Joaquin Jacques v. New Jersey Property Liability Insurance Guaranty Association, et al., No. ESX-L-008212-17, N.J. Super., Essex Co.).



Florida Judge Ends Southern Family Insurance Co.'s Receivership
TALLAHASSEE, Fla. - A Florida trial judge closed the receivership for Southern Family Insurance Co. (SFIC) on Dec. 11 and approved the receiver's discharge accounting statement (In re: The receivership of Southern Family Insurance Co., No. 2006 CA 1060, Fla. Cir., Leon Co.).



New Hampshire Judge Approves $42M Settlement Between Insolvent Insurer, Insured
CONCORD, N.H. - A New Hampshire trial judge on Jan. 6 approved a $42 million settlement made by the liquidator of The Home Insurance Co. with an insured (In the Matter of the Liquidation of The Home Insurance Co., No. 03-E-0106, N.H. Super., Merrimack Co.).