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Preview: LexisNexis® Mealey's™ Reinsurance Legal News

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Headline Reinsurance Legal News from LexisNexis®



 



Texas High Court Denies Review Of Reinsurance Risk Pool Tax Decision
AUSTIN, Texas - On Sept. 1, the Texas Supreme Court declined to review an appellate court's ruling that two insurers may not recover more than $1.1 million in taxes, penalties and interest on reinsurance agreements issued to two Texas self-funded risk pools (Argonaut Insurance Co., et al. v. Glenn Hegar, et al., No. 16-0663, Texas Sup., 2017 Tex. LEXIS 776).



Judge Orders Reinsurer, Insurer To Arbitrate $1.3M Breach Of Contract Suit
MONTGOMERY, Ala. - An Alabama federal judge on Sept. 7 ordered a nonprofit public insurer and a reinsurer to arbitrate a $1.3 million breach of contract lawsuit based upon an arbitration clause in a reinsurance agreement (Alabama Municipal Insurance Corp. v. Munich Reinsurance America Inc., No. 16-00948, M.D. Ala., 2017 U.S. Dist. LEXIS 144748).



Reinsurer Seeks To Amend Answer To Insurer's Breach Of Contract Counterclaims
PHILADELPHIA - A reinsurer on Aug. 29 moved a Pennsylvania federal court for leave to amend its answer to an insurer's breach of contract counterclaims, seeking to deny that it agreed to reinsure an excess umbrella policy and seeking to assert statute of limitations defenses (R&Q Reinsurance Co. v. St. Paul Fire & Marine Insurance Co., No. 16-1473, E.D. Pa.).



Judge Refuses To Transfer Dispute Under Reinsurance Agreement's Forum Clause
BRIDGEPORT, Conn. - In a dispute over a series of insurance and reinsurance contracts, a Connecticut federal judge on Sept. 12 declined to enforce a forum selection clause in a reinsurance participation agreement (RPA) because it does not apply to the bulk of an insured's claims against its workers' compensation insurer and its affiliates (Charter Oak Oil Co. Inc. v. Applied Underwriters Inc., et al., No. 17-00689, D. Conn., 2017 U.S. Dist. LEXIS 147181).



Pennsylvania Appeals Panel: Reinsurer Owes $7.9M To Insurers On Asbestos Claims
HARRISBURG, Pa. - A reinsurer owes $7.9 million to two insurers for asbestos claims, a Pennsylvania Superior Court ruled Sept. 1, rejecting the reinsurer's argument that it already paid out $11 million under specific limits of the policies (Century Indemnity Co. v. OneBeacon Insurance Co., No. 1280 EDA 2016, Pa. Super., 2017 Pa. Super. Unpub. LEXIS 3300).



Insurer Says To New York High Court: Reinsurer Must Pay Its Share Of Defense Costs
NEW YORK - Reinsurance certificates should be treated as concurrent with underlying insurance policies, an insurer argues in an Aug. 4 reply brief in the New York Court of Appeals, so that a reinsurer must pay its share of defense costs for asbestos litigation (Global Reinsurance Corporation of America v. Century Indemnity Co., No. CTQ-2016, 0005, N.Y. App.).



Federal Judge Schedules Jury Trial In Reinsurance Suit Over Asbestos Claims
SYRACUSE, N.Y. - A New York federal judge on Aug. 30 scheduled a reinsurance dispute between Utica Mutual Insurance Co. and R&Q Reinsurance Co. involving coverage for underlying asbestos injury claims for a March 12 jury trial (Utica Mutual Insurance Co. v. R&Q Reinsurance Co., No. 15-cv-270, N.D. N.Y.).



Judge: Issues Remain On Pollution Exclusion, Primary Insurance Exhaustion
CHICAGO - An insured showed that genuine issues of material fact exist as to whether all primary policies have been exhausted for an excess insurance policy to be triggered and as to whether a pollution exclusion applies, an Illinois federal judge ruled Sept. 7, denying summary judgment to a reinsurer who indemnified the excess policy (Velsicol Chemical LLC v. Westchester Fire Insurance Co., No. 15-2534, N.D. Ill., 2017 U.S. Dist. LEXIS 144698).



Judge: Insureds Sufficiently Allege Insurer Considered Higher Reinsurance Costs
PHILADELPHIA - A class of owners of life insurance policies adequately alleged that a life insurer's admitted consideration of lower investment income and higher reinsurance costs constituted breaches of the policies, a Pennsylvania federal judge ruled Sept. 11 (In re: Lincoln National Co. Litigation, No. 16-06605, E.D. Pa., 2017 U.S. Dist. LEXIS 146904).



Bankruptcy Judge Declines To Change Arbitration Order In $15M Insurance Dispute
NEW YORK - A New York bankruptcy judge on Sept. 6 refused to dismiss an order requiring a defunct brokerage company to arbitrate in Bermuda its dispute with a foreign specialty reinsurer over a $15 million policy, despite the brokerage company's argument that its liquidation plan supersedes an arbitration provision (In re: MF Global Holdings Ltd., et al., MF Global Holdings Ltd., et al. v. Allied World Assurance Company Ltd., et al., Chapter 11 No. 11-15059, Adv. Proc. No. 16-01251, S.D. N.Y. Bkcy., 2017 Bankr. LEXIS 2379).



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).



Insurer Seeks To Confirm Arbitration Award In Dispute With Bermuda Reinsurer
ATLANTA - Following arbitration of a dispute with a Bermuda reinsurer, an insurer on Aug. 4 filed a petition in a Georgia federal court seeking confirmation of a confidential arbitration award (TIG Insurance Co. v. Appalachian Reinsurance [Bermuda] Ltd., No. 17-02938, N.D. Ga.).



Insurer Seeks To Exclude Expert Testimony From Reinsurer's Former Employee
UTICA, N.Y. - In a dispute over an underlying $325 million settlement of asbestos claims, an insurer argues in a Sept. 1 motion that a New York federal judge should exclude testimony from a reinsurer's former employee because he has no personal involvement in the contracts (Utica Mutual Insurance Co. v. Fireman's Fund Insurance Co., No. 09-cv-00853, N.D. N.Y.).



Bank Says Insurer Was Already Paid For Damages Alleged For Reinsurance Funds Mishandling
COLUMBIA, S.C. - In an Aug. 21 motion for summary judgment, a bank accused of mishandling reinsurance funds tells a South Carolina federal court that an insurer cannot recover damages because it was compensated for the assets in the trust accounts before the insurer filed its lawsuit (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.).



Magistrate Orders Discovery Sanctions In Reinsurance Dispute Over Promissory Note
LINCOLN, Neb. - For failing to comply with a discovery order requiring information about a reinsurance participation agreement (RPA) and a promissory note executed, a Nebraska federal magistrate judge ordered an insurer on Sept. 5 to pay $5,500 in sanctions (Applied Underwriters Inc. v. Top's Personnel Inc., No. 15CV90, D. Neb., 2017 U.S. Dist. LEXIS 124136).



Federal Judge Extends Discovery Deadline In Reinsurance Fraud Case
ATLANTA - In a dispute over alleged fraudulent transfers of reinsurance funds, a Georgia federal judge on Aug. 24 extended discovery by 12 weeks for an insurer and reinsurers (Canal Insurance Co., et al. v. Golden Isles Reinsurance Company Ltd,, et al., No. 15-03331, N.D. Ga.).



Federal Judge Discontinues $9.3M Reinsurance Fraud Dispute After Settlement
NEW YORK - A New York federal judge stipulated and agreed on Aug. 31 to discontinue, with prejudice, a $9.3 million reinsurance fraud action following the consummation of a settlement of all claims and counterclaims between the parties (AmTrust North America Inc., et al. v. Safebuilt Insurance Services Inc., et al., No. 14-cv-9494, S.D. N.Y.).



Film Company Tells Court It Will Deliver Revenue To Insurer's Liquidator
HARRISBURG, Pa. - A film company says to a Pennsylvania trial court on Aug. 31 that it will deliver distribution revenue in its possession to an insolvent insurer's liquidator (In re: Reliance Insurance Co. in liquidation, No. 1 REL 2001, Pa. Cmwlth.).



Judge Orders Separate Trials In Insurer's Dispute Over Reinsurance Funds Mishandling
COLUMBIA, S.C. - A South Carolina federal judge on Aug. 23 ordered separate trials for an insurer's negligence claims against a bank in a dispute over the mishandling of reinsurance funds and third-party contribution claims brought by the bank (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., 2017 U.S. Dist. LEXIS 134682).



Judge Strikes Affirmative Defense In Dispute Over Insurer, Reinsurer Scheme
PHILADELPHIA - In a dispute over an alleged kickback insurance premium scheme involving insurers, reinsurers and lenders, a Pennsylvania federal judge on Aug. 24 struck an affirmative defense that homeowners' claims are barred because they paid mortgage insurance rates filed with and approved by state regulators (Nelson White Jr., et al. v. The PNC Financial Services Group Inc., et al., No. 11-7928, E.D. Pa., 2017 U.S. Dist. LEXIS 135743).



Bankruptcy Judge Orders Arbitration For $15M Dispute Against Specialty Reinsurer
NEW YORK - A New York bankruptcy judge on Aug. 24 ordered a defunct brokerage company to arbitrate in Bermuda its dispute with a foreign specialty reinsurer over a $15 million policy (In re: MF Global Holdings Ltd., et al., MF Global Holdings Ltd. as plan administrator, and MF Global Assigned Assets LLC v. Allied World Assurance Company Ltd., et al., Chapter 11 No. 11-15059, Adv. Proc. No. 16-01251, S.D. N.Y. Bkcy., 2017 Bankr. LEXIS 2379).



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).



Magistrate Judge Denies Production Of Privileged Docs In Reinsurance Dispute
UTICA, N.Y. - A New York federal magistrate judge on Aug. 21 denied an insurer's request to compel disclosure of certain documents in its dispute with its reinsurer over an underlying $325 million settlement of asbestos claims because "discovery is long closed" (Utica Mutual Insurance Co. v. Fireman's Fund Insurance Co., No. 09-cv-00853, N.D. N.Y.).



Reinsurer Seeks Cedent's Communications With Another Reinsurer On Trucking Accident
NEW YORK - In a reinsurance coverage dispute for a trucking accident, a reinsurer argues in a July 27 letter that a New York federal court must compel an insurer to produce communications with another of its reinsurers over the same claim because they are relevant to the reinsurance claim (Endurance Assurance Corp. v. Florists' Mutual Insurance Co., et al., No. 16-09955, S.D. N.Y.).



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.).



Justice Orders Posting Of Bonds In Illegal Workers' Comp Reinsurance Case
NEW YORK - A New York trial justice on Aug. 24 ordered defendants accused of an illegal workers' compensation reinsurance scheme to post two bonds in the amount of $11.1 million and $2.82 million, noting that the amounts are not related to any potential recoveries (Current Lighting & Electric Inc., et al. v. Berkshire Hathaway Inc., et al., No. 652316/2017, Alternative Fuels Transportation Inc., et al. v. Berkshire Hathaway Inc., et al., No. 652702/2017, N.Y. Sup., New York Co., 2017 N.Y. Misc. LEXIS 3203).



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).



Panel Finds Error In Ruling That Reinsurance Agreement Is An Insurance Contract
RICHMOND, Va. - A trial judge erred in applying the doctrine of judicial estoppel to hold that a "reinsurance participation agreement" (RPA) constituted an insurance contract under Virginia law, the Fourth Circuit U.S. Court of Appeals ruled Aug. 11, reversing in part a ruling and remanding for further proceedings (Minnieland Private Day School Inc. v. Applied Underwriters Captive Risk Assurance Company Inc., No. 16-1511, 4th Cir., 2017 U.S. App. LEXIS 14916).



Insurer Seeks Clarification On Discovery To Reinsurer In Breach Of Contract Suit
PHILADELPHIA - In a breach of contract suit, an insurer moved for clarification on Aug. 11 with a Pennsylvania federal court to confirm that it is to produce only unredacted versions of documents previously produced with redactions based on proprietary material, reserves and "other reinsurance" information and additional documents reflecting the date when the insurer provided first notice of asbestos claims to other reinsurers of relevant policies (R&Q Reinsurance Co. v. St. Paul Fire & Marine Insurance Co., No. 16-1473, E.D. Pa.).



Panel Remands For Trial On Execution Of Arbitration Clause Under Reinsurance Agreement
SAN FRANCISCO - Vacating a lower court's judgment, the Ninth Circuit U.S. Court of Appeals on Aug. 4 remanded a dispute for a trial on whether a corn and flour tortilla maker executed arbitration agreements under a reinsurance participation agreement (RPA) or a request to bind coverages and services (Arevalo Tortilleria Inc. v. Applied Underwriters Captive Risk Assurance Company Inc., No. 15-56830, 9th Cir., 2017 U.S. App. LEXIS 14399).



Insurer Asserts No Waiver In Right To Arbitrate $1.3M Suit With Reinsurer
MONTGOMERY, Ala. - A nonprofit public insurer argues to an Alabama federal court in an Aug. 9 brief that it did not waive its right to arbitrate its $1.3 million lawsuit under a reinsurance agreement and that a reinsurer will not be prejudiced in sending the dispute to arbitration (Alabama Municipal Insurance Corp. v. Munich Reinsurance America Inc., No. 16-cv-00948, M.D. Ala.).



Reinsurer Appeals To 2nd Circuit Insurer's $18M Arbitration Award
NEW YORK - A reinsurer on Aug. 14 appealed to the Second Circuit U.S. Court of Appeals a ruling requiring it to pay up to an additional $18 million in reinsurance proceeds to an insurer pursuant to an arbitration award (General Re Life Corp. v. Lincoln National Life Insurance Co., No. 17-2496, 2nd Cir.).



Magistrate Judge Issues Sanctions In Favor Of Reinsurer In Promissory Note Dispute
LINCOLN, Neb. - A Nebraska federal magistrate judge on Aug. 7 granted a reinsurer's motion for sanctions against an insurer for its failure to provide complete answers to interrogatories in a dispute concerning sums allegedly owed under a promissory note executed in connection with a reinsurance participation agreement (Applied Underwriters Inc. v. Top's Personnel Inc., No. 15CV90, D. Neb., 2017 U.S. Dist. LEXIS 124136).



Reinsurance Executives Say $50M RICO Suit With Insurers Should Be Sent To Arbitration
NEW YORK - Reinsurance executives argue in an Aug. 14 reply brief that a New York federal court should compel arbitration of insurers' $50 million Racketeer Influenced and Corrupt Organizations Act case or, alternatively, stay the dispute "in the interests of fairness and judicial economy" (Bankers Conseco Life Insurance Co., et al. v. Moshe M. Feuer, et al., No. 16-7646, S.D. N.Y.).



Bank Opposes Insurer's Discovery Sanctions Bid In Reinsurance Dispute
COLUMBIA, S.C. - A bank argues in an Aug. 7 opposition brief that a South Carolina federal court should not impose an insurer's discovery sanctions in a dispute over the mishandling of reinsurance funds because it has appropriately preserved and collected electronically stored information (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., 2017 U.S. Dist. LEXIS 54182).



Employer Trust Appeals No Bad Faith Ruling Over Insurer's Delegation To Reinsurer
CHICAGO - An employer's trust on Aug. 2 appealed to the Seventh Circuit U.S. Court of Appeals a ruling that an insurer did not act in bad faith when it delegated to a reinsurer its responsibility to the trust because a contract placed no limits on the insurer's ability to do so and contained no requirements for disclosure of any assignments (Midco International, Inc. Employees Profit Sharing Trust v. Metropolitan Life Insurance Co., No. 17-2570, 7th Cir.).



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.).



Federal Judge Orders Parties To Consummate Settlement In $9.3M Reinsurance Dispute
NEW YORK - Writing "ok, you win" on a memo endorsement seeking a settlement extension, a New York federal judge ordered the parties in a $9.3 million reinsurance fraud action to consummate their settlement of all claims and counterclaims by Sept. 15 (AmTrust North America Inc., et al. v. Safebuilt Insurance Services Inc., et al., No. 14-cv-9494, S.D. N.Y.).