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

Mealey's Reinsurance

January 28, 2025
Reinsurer To 6th Circuit: Arbitration Awards Can Be Basis For Collateral Estoppel

CINCINNATI — Arguing in part that “judicial review of arbitration awards is still available under the Federal Arbitration Act,” a reinsurer urged the Sixth Circuit U.S. Court of Appeals to uphold a ruling that collateral estoppel applies to a defense costs dispute concerning asbestos lawsuits.
January 28, 2025
Securities Suit Involving Reinsurance Dismissed For Lack Of Scienter

NEW YORK — Ruling that the “allegations fail to raise the required strong inference of scienter” and that further amendment would be futile, a New York federal judge dismissed a putative class action that attempted to use a reported error on the reinstatement premium for a specialty casualty reinsurance treaty — and purported statements from confidential witnesses — as the basis for securities fraud claims.
January 27, 2025
English Judge Makes Antiarbitration Injunction Final In Reinsurance Row

LONDON — In line with prior rulings in the contractual construction dispute that involves a hierarchy or “confusion” clause, a judge of the High Court of England and Wales rejected a reinsurer’s jurisdictional argument and granted a captive insurer’s request to issue an antiarbitration injunction on a final basis.
January 24, 2025
Hawaii Court Won’t Stay Allocation Proceeding Pending Subrogation Ruling

HONOLULU — Without explanation, a Hawaii Supreme Court justice denied a motion to stay a lower court’s allocation proceeding pending the resolution of reserved questions on how the subrogation rights of property and casualty insurance carriers bear on a proposed global settlement of claims related to the August 2023 Maui wildfires.
January 24, 2025
Settlement In Principle Reported In Row Over Jet Leased To Russian Operator

SAN FRANCISCO — Citing “reports that Plaintiffs have reached settlements in principle with all Defendants,” a California state court judge vacated an April 7 trial date and other deadlines in an international aviation insurance coverage dispute involving Russia’s invasion of Ukraine.
January 22, 2025
Bid To Compel Production Of Reinsurance Info Denied In Cleanup Costs Dispute

PADUCAH, Ky. — Saying in part that “neither claims manuals and guidelines nor reinsurance-related documents are relevant to Phase I of this litigation,” a Kentucky federal magistrate judge denied a motion to compel production in a dispute over pollution-related cleanup costs.
January 22, 2025
Judge Remands Request To Regulators In Crop Insurance Lawsuit

SOUIX FALLS, S.D. — Denying competing summary judgment motions in a crop insurance case centered on federal regulators’ refusal to issue a noncompliance determination, a South Dakota federal judge concluded that the challenged director review determination was arbitrary and capricious because it “failed to consider an important aspect of the problem”; she therefore remanded the request for a noncompliance determination directing that “the agency must provide a reasoned basis for its determination.”
January 21, 2025
10th Circuit Tosses Appeal Of Tax Court Ruling On Purported Microcaptive

DENVER — In an unpublished order citing the lack of a “final decision to review,” a 10th Circuit U.S. Court of Appeals panel dismissed an appeal filed by appellants who unsuccessfully sued the commissioner of Internal Revenue in U.S. Tax Court over purported microcaptive insurance.
January 17, 2025
Declaratory Judgment Suit Focuses On Reinsurance, Legionnaires’ Disease Claims

DETROIT — Alleging breach of a reinsurance agreement and seeking declaratory judgment, a captive insurer filed a lawsuit in Michigan federal court over claims concerning Legionnaires’ disease.
January 17, 2025
Argument Set For Hawaii Supreme Court Case On Wildfire Settlement Subrogation

HONOLULU — An amicus curiae group called the “Consolidated Class Plaintiffs” will take part in Feb. 6 oral argument after the Hawaii Supreme Court expanded the time allotted in the case concerning reserved questions on how the subrogation rights of property and casualty insurance carriers bear on a proposed global settlement of claims related to the August 2023 Maui wildfires; additionally, a pending opposed motion seeks to stay a lower court’s allocation proceeding.
January 17, 2025
Bid To Pursue Resolution With Vesttoo Affiliate In Israel Draws Opposition

WILMINGTON, Del. — Israeli investors’ request for a Delaware federal bankruptcy court to grant relief from the injunction in the Chapter 11 liquidation of Vesttoo Ltd. and dozens of affiliates so they can pursue arbitration and/or liquidation proceedings in Israel has drawn objections that the investors argue should be rejected.
January 16, 2025
N.J. High Court Decision Is Cited In Discovery Ruling On Reinsurance Info

TRENTON, N.J. — Declining to compel production of information concerning a reinsurance policy, a New Jersey federal magistrate judge concluded that Statewide Ins. Fund v. Star Ins. Co. and the state statute that authorized a joint insurance fund (JIF) rendered the discovery requests at issue “not relevant and not proportional to the needs of the case.”
January 16, 2025
South Carolina Orders Insurer, Captive Reinsurer To Stop Writing New Business

COLUMBIA, S.C. — Documents that South Carolina regulators have made publicly available show that Atlantic Coast Life Insurance Co. (ACL) and ACL’s captive reinsurer Southern Atlantic Re Inc. (SAR) were confidentially put into administrative supervision in April 2024 and then ordered to stop writing new business by the end of 2024.
January 15, 2025
Tax Consultant Sues To Vacate New Microcaptive Rule Under APA

DALLAS — Invoking the Administrative Procedure Act (APA), a self-described “global tax consulting firm” filed a same-day challenge to a final rule in which the Internal Revenue Service and U.S. Treasury Department require reports for certain purported microcaptive insurance arrangements.
January 14, 2025
IRS And Treasury Department Issue Final Rule On Microcaptive Transactions

WASHINGTON, D.C. — Some microcaptive transactions are “listed transactions” and others are “transactions of interest” and both have to be reported to the Internal Revenue Service under a final rule issued by the IRS and U.S. Treasury Department that is effective Jan. 14.
January 13, 2025
Bid For Review Of 9th Circuit Crop Insurance Ruling Under Loper Bright Fails

WASHINGTON, D.C. — In its Jan. 13 order list, the U.S. Supreme Court denied a certiorari petition in which a farm argued that Loper Bright Enterprises v. Raimondo should have prevented the Ninth Circuit U.S. Court of Appeals from deferring to a regulatory interpretation of the Federal Crop Insurance Corp. (FCIC) in a crop insurance case.
January 09, 2025
Partial Dismissal Granted In Suit Over Financing With Now-Insolvent Insurer

NEW YORK — A New York state court justice granted in part an investment placement agent’s and related entity’s motion to dismiss in an aiding and abetting fraud and negligent misrepresentation suit over the agent’s alleged failure to disclose the creditworthiness of certain entities in a financing transaction, including a now-liquidated insurer, finding in part that the lender plaintiffs failed to sufficiently state a claim for negligent misrepresentation.
January 09, 2025
Vice Chancellor Addresses Privilege Claims In DUFTA Case Discovery Dispute

WILMINGTON, Del. — A Delaware Chancery Court vice chancellor ordered plaintiffs to produce some documents they had argued were privileged and to pay for additional depositions in a putative class suit over an alleged scheme to strip capital from an insurance subsidiary on which many policyholders depend for long-term care (LTC) disability benefits.
January 08, 2025
Liquidation, Injunction Orders Entered For 2 Special Purpose Captive Insurers

WILMINGTON, Del. — A Delaware Chancery Court vice chancellor on Jan. 7 entered liquidation and injunction orders regarding two special purpose captive insurance companies — American Casualty Reinsurance of Delaware LLC (ACRE) and American Equine Insurance Company LLC (AEIC) — that the Delaware Department of Insurance seized in June 2024 under confidential orders.
January 07, 2025
Judge Sets Aside Deadlines During Discovery In Breach Suit Against Ex-Underwriter

MIAMI — After an insurer asked to extend deadlines for reasons including that recent discovery “has revealed the broad scope of [its former underwriter]’s years-long, transnational scheme” that allegedly exposed it “to over $100 million in claims,” a Florida federal judge entered an order setting aside the deadlines while discovery continues.
January 06, 2025
Some Defendants Reach Undisclosed Settlement In Jet Coverage Lawsuit

SAN FRANCISCO — A few defendants have been dismissed with prejudice from an international aviation insurance coverage dispute involving Russia’s invasion of Ukraine pursuant to a confidential settlement approved by a California state court judge.
January 06, 2025
Citing Wildfire Risks, California Issues Net Cost Of Reinsurance Regulation

SACRAMENTO, Calif. — The California Department of Insurance has issued a Net Cost of Reinsurance (NCOR) in Ratemaking Regulationthat Commissioner Ricardo Lara says was prompted by insurers pulling back from the state’s property insurance market in light of the growing risk of wildfires.
January 03, 2025
Settlement, Recapture Proposed Involving Reinsurer That Is In Liquidation

WILMINGTON, Del. — The Delaware Chancery Court has been asked to approve a deal involving settlement and recapture agreements under which stock reinsurance company Scottish Re (U.S.) Inc. (SRUS), which is in liquidation, would receive a recapture payment of $86,210,609.56.
January 02, 2025
Intervention Sought Over Setoff Rights In Connecticut Rehabilitation Proceeding

HARTFORD, Conn. — Policy owners’ setoff rights are the focus of an intervention motion that three investment managers filed in Connecticut state court regarding the rehabilitation of life insurer PHL Variable Insurance Co. and the subsidiaries that reinsure its liabilities.
January 02, 2025
Dismissal Bid Fails In Reinsurer’s Breach Of Contract Lawsuit Because Of Term

TAMPA, Fla. — Saying in part that the key contractual term “is arguably facially ambiguous,” an Illinois federal judge denied a motion to dismiss a reinsurer’s breach of contract suit and then stayed the case through Feb. 3 at the parties’ request “to permit them to try to resolve the case by agreement.”