Mealey's Reinsurance : Mealey's : Legal News & Analysis

Mealey's Reinsurance

August 08, 2025
Suit Against Captive Insurer, Other Entities Voluntarily Dismissed, Terminated

WASHINGTON, D.C. — A District of Columbia federal judge terminated a case involving a risk retention group (RRG) and three entities it sued for breach of contract, breach of the covenant of good faith and fair dealing and tortious interference with business relations after the parties filed a joint stipulation of dismissal.
August 06, 2025
Insurer, Ex-CEO Seek Discovery Stay In Suit Over Alleged Claims Reserve Scheme

DALLAS — A delisted insurer and its former CEO asked a Texas federal court to stay discovery pending resolution of the former CEO’s motions for partial summary judgment on advancement of incurred legal fees and dismissal of the insurer’s counterclaims, claiming that the decisions could alter the scope of discovery in a case centered on allegations that the former CEO manipulated the insurer’s claims reserves, resulting in financial losses from a terminated loss portfolio transfer (LPT) reinsurance contract.
August 06, 2025
Vesttoo-Related Fraud Actions Consolidated For Discovery, Pretrial Proceedings

NEW YORK — A New York federal judge ordered the consolidation of a third case similar to two other previously consolidated cases that involve alleged fraud tied to the collapse of nonparty Vesttoo Ltd., directing that discovery and pretrial proceedings be coordinated after the parties in the third case consented to consolidation and to deferring briefing schedules on pending motions to dismiss.
August 05, 2025
Parties Ordered To Submit Briefing Schedule In SEC Fraud Row With Insurance Mogul

WINSTON-SALEM, N.C. — After reviewing the U.S. Securities and Exchange Commission’s status report, a North Carolina federal judge on Aug. 4 issued a docket-only order advising the parties to submit a briefing schedule within 10 business days of insurance mogul Greg Lindberg or a co-defendant being sentenced in related criminal proceedings to the SEC’s suit alleging that Lindberg, his advisory services company and its former executive defrauded clients of more than $75 million.
July 31, 2025
Expedited Proceedings Vacated In Reinsurance Dispute After Regulatory Disapproval

WILMINGTON, Del. — A Delaware state vice chancellor vacated a prior order for expedited proceedings, finding that the risk of irreparable harm that justified expedition in April no longer exists after North Carolina regulators denied approval of disputed transactions involving an alleged illegal reorganization that transferred policies from a pool with more than $1 billion in assets to a new, unrated insurer with limited capitalization.
July 30, 2025
Oral Argument On Motion To Compel Set In Case Centered On Fronting Arrangement

NEW ORLEANS — A Louisiana federal magistrate judge scheduled oral argument for Aug. 20 on a managing general agent (MGA)’s motion to compel in litigation concerning a disputed fronting agreement involving it and an insurer; the magistrate judge also dismissed as moot the insurer’s motions to quash and expedite discovery proceedings because both parties were ordered to “meet and confer to schedule the depositions for August 2025.”
July 28, 2025
U.S. Tax Court Clarifies, Maintains Ruling In Favor Of IRS In Microcaptive Case

WASHINGTON, D.C. — Stating that “the Court failed to fully clarify two important issues” in a March opinion, a U.S. Tax Court judge issued a supplemental memorandum opinion in a consolidated case maintaining that a purported captive insurance arrangement could not exclude premiums from income during the 2015 and 2016 tax years because it is not considered insurance and that it must recognize $781,977 in income for the 2015 tax year because the provisions allowing deferral of unearned premiums do not apply to entities that are not insurance companies.
July 28, 2025
Financer Appeals Intervention Denial To 7th Circuit In Reinsurance Dispute

CHICAGO — A vehicle service contract financer appealed to the Seventh Circuit U.S. Court of Appeals after an Illinois federal judge denied its motion to intervene in a reinsurance dispute between an insurer and reinsurer, with the judge saying the financer lacked a “legally protectable interest to intervene as of right” and was not a necessary party to the litigation, which it sought to dismiss.
July 25, 2025
Calif. Judge Grants Commissioner’s Demurrer As To 2 Claims In Pass-Through Row

LOS ANGELES — Holding that California Insurance Commissioner Ricardo Lara acted within his authority to issue property insurance pass-throughs but determining that exhausting administrative remedies was not necessary for judicial review, a California judge partially sustained and partially overruled Lara’s demurrer in response to a consumer research and advocacy organization’s complaint that accused Lara of issuing two unlawful insurance bulletins that authorize member insurers of the California FAIR Plan to recoup assessments from policyholders.
July 25, 2025
5th Circuit Affirms Ruling For IRS In Tax Row Over Purported Microcaptives

NEW ORLEANS — Upholding a ruling for the U.S. Internal Revenue Service in a federal tax dispute over purported microcaptive insurance arrangements, the Fifth Circuit U.S. Court of Appeals interpreted part of the Internal Revenue Code “to determine when supervisory approval was required, an issue of first impression in this circuit.”
July 24, 2025
California Court OKs Publishing Ruling Re Rehab Plan For Workers’ Comp Insurer

SAN FRANCISCO — The First District California Court of Appeal on July 23 granted a request for publication of an initially unpublished opinion upholding a nonconsensual rehabilitation plan for a workers’ compensation insurance carrier; the plan was approved as part of conservation proceedings brought by California’s insurance regulator and includes options to resolve dozens of reinsurance participation agreement (RPA) lawsuits.
July 24, 2025
Vendor Dismisses Insurer From Breach Of Contract Claim; 1 Defendant Remains

NEW YORK — The plaintiffs in dispute involving reinsurance and a warehouse in Afghanistan filed a notice of voluntary dismissal in a federal court in New York, dismissing its breach of contract claim against an insurer; the dismissal is without prejudice with each party to bear their own attorney fees and costs.
July 23, 2025
PHL Rehabilitator Requests Moratorium Order Modification, Cites ‘Financial Strain’

WATERBURY. Conn. — Stating that a moratorium order that affects payments of benefits or investment obligations for policies issued by PHL Variable Insurance Co. “may present financial strain on certain policyholders,” the insurer’s rehabilitator filed a motion on July 22 to modify the order in a Connecticut court, seeking to allow eligible holders of nonvariable universal life policies alternative options for the full cost of insurance or premium charges, and enable fixed indexed annuity holders to access part of their account value.
July 23, 2025
Judge Orders Disposition Of Proceeds In Insurance Magnate Money Laundering Case

CHARLOTTE, N.C. — A North Carolina federal judge on July 22 approved a consent motion filed by a court-appointed special master to dispose of the proceeds from the sale of Irish software companies in a case in which insurance magnate Greg Lindberg pleaded guilty to money laundering conspiracy and conspiracy regarding his $2 billion scheme to defraud insurers and policyholders by funneling money through his extensive global network of insurance companies and was convicted on retrial in a related criminal proceeding.
July 23, 2025
Interlocutory Appeal Certified On Standing In PRT Case That Survived Dismissal

GREENBELT, Md. — Part of a key ruling in a putative class lawsuit that is part of a much-watched recent string of Employee Retirement Income Security Act cases challenging pension risk transfers (PRTs) is headed to the Fourth Circuit U.S. Court of Appeals after a Maryland federal judge on July 22 granted an opposed motion to certify for interlocutory appeal.
July 23, 2025
Federal Judge Dismisses Purchaser’s Suit Over Forced Deal Involving Reinsurer

NEW YORK — Finding in part that a claim asserted under the Securities Exchange Act “may be domestic but is so predominantly foreign as to be extraterritorial,” a New York federal judge dismissed federal securities claims with prejudice and declined to exercise supplemental jurisdiction over state fraud and breach of contract claims in an insurer’s suit over its forced April 2024 purchase of the equity of reinsurer JRG Reinsurance Co. Ltd.
July 22, 2025
Businessman Argues Guaranty Is Void, Moves To Dismiss Breach Of Contract Suit

NEW YORK — A Florida businessman seeks dismissal in a federal court in New York of a reinsurer’s breach of contract complaint relating to a personal guaranty agreement on a defaulted $34.4 million loan, arguing that the guaranty lacks consideration and violates the statute of frauds, qualifying the agreement as a “gratuitous promise” and rendering it unenforceable.
July 18, 2025
Government Seeks Dismissal Of Captive Insurance Refund Dispute For Improper Venue

TULSA, Okla. — Arguing that the action was filed in an improper judicial circuit and inconsistent with principal place of business evidence, the U.S. government moved to dismiss a complaint filed in a federal court in Oklahoma by the owners of a steel building manufacturer who claim that the Internal Revenue Service improperly disallowed a legitimate business expense related to a captive reinsurance arrangement.
July 17, 2025
Dismissal Bid Briefed In Suit Involving Lack Of Federal Reinsurance Coverage

BAY CITY, Mich. — Asserting arguments on issues including res judicata and statutes of limitations, an insurer that issued dairy revenue protection (DRP) coverage has filed a reply brief in its suit for compensatory damages for losses it reports incurring “due to the loss of reinsurance” it attributes to “the acts, errors, and omissions of” an insurance agency and the agency’s employee.
July 16, 2025
Settlement Approved Between Receiver Of Liquidated Reinsurer And Long-Serving TPA

WILMINGTON, Del. — The Delaware Chancery Court approved a settlement between the receiver for life and health reinsurer Scottish Re (U.S.) Inc. (SRUS) and its third-party administrator (TPA), which had sought to terminate its service agreement with SRUS. Under the settlement, the parties agree to terminate the disputed administrative services agreement (ASA), and SRUS will waive claims centered on reimbursement disagreements.
July 16, 2025
Captive Insurance Owners, Government Stipulate To Dismissal In Deduction Row

WASHINGTON, D.C. — A federal tax refund complaint centered on disallowed deductions for insurance premiums paid to a captive insurance company was dismissed with prejudice on July 15 after a pair of individuals and the government stipulated to dismissal.
July 16, 2025
U.S., Former Execs Brief 2nd Circuit Cross-Appeals In Securities Fraud Case

NEW YORK — Wrapping up briefing in consolidated cross-appeals in a securities fraud case, the federal government urged the Second Circuit U.S. Court of Appeals to reverse certain judgments in the long-running litigation and order resentencing for all three former hedge fund executives whom federal juries convicted in connection with the so-called “Black Elk” scheme that involved reinsurers.
July 15, 2025
PHL Rehabilitator To Propose Moratorium Modifications Before End Of July

WATERBURY, Conn. — In a supplement to his second accounting and status report, the rehabilitator of PHL Variable Insurance Co. told a Connecticut court that by the end of July, he intends to file a motion to modify a moratorium order that affects payments of benefits or investment obligations for policies issued by PHL.
July 14, 2025
General Agent’s Consolidation Bid Nixed In Fronting Arrangement Dispute

NEW ORLEANS — A Louisiana federal judge denied a managing general agent’s (MGA) motion to consolidate a case centered on a disputed fronting agreement with a “Sister Lawsuit,” calling the request premature due to a pending motion to dismiss in the related action.
July 14, 2025
Oral Argument Set In Appeal On Good Farming Practices Crop Insurance Determination

NEW ORLEANS — Oral argument is scheduled for Aug. 5 in the Fifth Circuit U.S. Court of Appeals in an appeal filed by a peanut and cotton farmer seeking reversal of a summary judgment ruling, which held that federal regulators implemented proper standards and correctly considered expert testimony in concluding that the farmer failed to follow good farming practices (GFP) for crop insurance coverage purposes.