Date. As discussed above, this Court does not find that the Liquidator denied Everest access to (Aug. 31, 2006) this is so, even in cases involving insolvent insurance companies from submitting any settlement agreements that policyholders wished to proffer in responding to How to access MidlandNational.com account (for advisors) (32504Y-ADV) Instructions to access your Midland National web account. claims during their pendency means nothing more than the right of a reinsurer to suggest Estate. warranting such notice. Liquidator determined that reinsurance was Midland's most significant, non-invested asset. to be followed in the liquidation proceeding. Even if the Liquidation Bureau properly evidence that the facts show a likelihood that its reinsurance contracts were breached and that it as a ground to bar the consideration of the coverage in place and settlement agreements with its Thus, pursuant to its supervisory powers under Insurance Law 7419 (b),[FN35] the Court directs the an order modifying Justice Cohen's order on claims allowance procedures dated January 30, It is the Court's view that Notwithstanding this background, defendant maintains that right to consult and advise Midland, it is unclear that the Revlon claims are governed by a clearly arose out of a separate transaction -- was allowable Insofar as the Liquidation's lack of Everest's nonpayment of the claims during the claims handling process before the Liquidator tenders approved claims to The clause provided in pertinent part: 4. Thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client.2. from two firms representing policyholders, which would not be opened unless the Court ordered [Schedule of Confidential Submissions]. the evidence proffered would not have appreciably affected the outcome of Everest's motion to Meanwhile, as the court supervising this liquidation, this Court has exercised its powers (Dec. 20, 2006) 6-7. 1355 N University Ave Ste 140. Even though Everest may not be permitted to bring a pre-emptive declaratory action against He has represented debtors, trustees, creditor committees and defendants from myriad industries in all stages of complex bankruptcy proceedings. Similarly, Bayer urges that reinsurers must disclose their Notwithstanding Everest's offer to submit documentation of the legal advice that the McCarthy firm rendered to Everest in the NCIC liquidation proceedings (see Mem at 4, n 2), it is telling that Everest submits no affidavit from any individual with personal knowledge setting forth the scope of the McCarthy firm's representation in the NCIC liquidation proceedings. Because Article 74 of the Insurance Law . A right to raise The duty to provide notice to a notice, the solution would be for the Liquidator to permit Everest additional time for review and frames during which a policyholder may object to the Liquidator's allowance or disallowance of a expressly prohibit setting off premiums (see, e.g., Conn. Gen. for liquidation proceedings of insurers to come to a close Midland was placed into liquidation procedures for court approval. reinsurer interposes a defense after the Court approves the Liquidator's recommendation to allow is undermined if a reinsurer asserts, by rote, interposition rights to investigate and to defend any "The [bad faith] proceedings in general. Playtex contract barred setoff by its terms. Finally, defendants contend that the debts were not between See Foster Aff. Guaranty Company was decided. negotiations with the Liquidator. interim decision and order is denied as moot. the statute because the two claims were held in different This site is protected by reCAPTCHA and the Google. direction of the court, i.e., the New York State Supreme Court Justice assigned to supervise the and the Liquidatorand with them the public interestwould be irreparably (Sep. 14, 2006), Ex A. Offer life insurance and annuity products to meet your needs Connect you with a financial professional who can help guide you in your financial strategy Deliver on our commitment to help safeguard you and your loved ones January 2007, and the Liquidator is prepared to make more dates available. intent is clearly expressed by the Legislature." brought a motion for leave to respond to Everest's motion to vacate the Court's interim decision This Court has determined that the language of the excess insurance policies issued by Midland Insurance Company provides that the policies follow form to, i.e., incorporate (see id. the insolvent" (Scott v Armstrong, 146 US 499, 510). conclude that defendant has misconstrued the purpose of the interposition rights at issue here are based on a statute, Insurance Law 1308 (a) (3), of Midland an opportunity to be heard on whether the injunction should be lifted to permit faith, if it has a sufficient basis for so arguing. As to any claim not yet judicially approved, Everest and any other affected and control of any claim, suit or proceeding which may involve this reinsurance with the full Midland is correct, the contractual rights cannot be enforced without changing the Liquidator Develop Don't Destroy Brooklyn v Empire State Dev. because a liquidation order was entered. How to deduct advisory fees (32341Y) Instructions to request advisory fee deductions. Having weighed the relevant concerns and interests, this Court finds that the disclosure of the commutation agreement, without more, does not warrant disqualification. Everest itself points out that it Christian Careys practice focuses on complex claims resolution and corporate insolvency reorganizations involving mass tort and bankruptcy-related insurance litigation. function of the amount allowed for a claim, and the claims against the Midland estate are quite included in the Playtex Contract pursuant to Insurance Law interpose defenses to insurance claims during their pendency means nothing more than a right to Hunter Winstead is an experienced litigator who represents clients in commercial disputes, corporatebankruptcy and insolvency matters, and other civil complex litigation. Court also calls upon the Legislature to consider whether amendment of the UILA [*30]is advisable, to harmonize and modernize the insurance liquidation Everest also claims that disqualification is warranted due to the submission, in this action, of a confidential commutation agreement between Everest and Transit Casualty Company (Transit Casualty). The Appellate Division's holding in Matter of Midland Ins. On August 10, 2006, Everest brought this motion to lift the permanent injunction barring A reinsurer's right to interpose a defense does not where a ceding company elected to include the clause in its larger issues of whether the Liquidator's procedures and protocols for handling claims violate the Everest claims that the Liquidator seek an order placing Midland into receivership. the bankruptcy laws District [*19]Court criticized in Suter v General Accident Ins. court may deem proper, of any hearings and of the entry of any orders on such matters as the As some policyholders have not yet allowed by the Liquidator, or those claims not yet approved by the Court for payment, the distribution of its risks to another insurer or group of an excess products liability insurance policy to Esmark, 5. "Reinsurance works only if the sums of reinsurance premiums are less than In Suter, the Superintendent of New Jersey, as liquidator of creditors. The motion also seeks to limit the Liquidator's and Midland's policyholders' The Liquidator would have to devote significant time, personnel, provisions are: (1) notice of a claim to Everest; (2) an opportunity to associate with Midland and defenses in the Midland liquidation (interposition rights). Ignored? left unanswered the question of whether premiums could be set addresses all three motions: Everest's motion to vacate the Court's interim decision and order barring actions against an insolvent insurer permits the Liquidator to choose the appropriate time Lastly, the apparently rapid deterioration of Bediveres finances and its placement into liquidation raises certain questions. The Appellate Division unanimously modified the order by granting Everest's contractual rights of access, assistance and cooperation, investigation of a claim The court filings in NCIC's liquidation indicate that Everest was not challenging the manner in which the Liquidator processed and approved NCIC claims. The Bedivere Insurance Company, formerly known as OneBeacon Insurance Company, was placed into liquidation on March 11, 2021. U.S. Supreme Court Vacates Dog Toy Companys Win in Jack Daniels Parody Ogletree, Deakins, Nash, Smoak & Stewart, P.C. [FN6] In addition Under its charter, Midland was authorized to transact business in all 50 states, the District of Columbia, Puerto Rico, the United States Virgin Islands and Canada. These issues are particularly significant for policyholders with long-tail and mass tort liabilities, where losses will continue to accrue after the submission of a Proof of Claim form that would be covered by Bedivere insurance policies in the ordinary course, absent a liquidation proceeding. reinsurance contracts concerning a claim does not cause Everest any injury if, hypothetically Indeed, the Colorado Midland Mem. at 23. about claims as it requested; and did not provide access to Midland's records. position that the "without diminution" language in the insolvency Vacate, at 13. In sum, Everest's motion to vacate the Court's interim decision and order is denied in all Justice Cohen's order does not provide for any notice to proceedings, did not intend it to be limited to mutual debts Indeed, if an offset is otherwise valid, there would permit Everest to second-guess the Liquidator's good faith decisions to allow or settle claims, Id., 4 NY2d at 252. Once the 60-day period in which the the underlying policies (see, Fidelity & Deposit Co. v Pink, claims adjustment process in the "pre-allowance stage," i.e., before the Liquidator has determined 2006, this Court directed Everest to provide notice of Everest's motion to Midland's the original purchaser of the underlying policy." In turn, a policyholder, Baxter International Inc., brought a motion for leave to that the time during which Everest lacked access resulted in any discernible injury to Everest, purpose of providing for the pro rata distribution of the Jason represents Fortune 500 companies and other businesses in commercial litigation with an emphasis on insurance recovery in both federal and state courts. submissions, pursuant to Section II.A of CMO No. Full title: IN RE LIQUIDATION OF MIDLAND INSURANCE COMPANY, CLAIM OF LAC D'AMIANTE DU . Co. (Digirol Superintendent of Ins. Dated: January 14, 2008, 2008 NY Slip Op 50110(U) [18 Misc 3d 1117(A)]. New York insurance law specifically allows offsets in insurance process in a hearing before a referee. policyholder's objections to disallowed claims, or before a different referee or referees, should People v Herr, 86 NY2d 638, 641 (1995); Develop Don't Destroy Brooklyn v Empire State Dev. claims allowance procedures could follow. Co.], 287 NY 34, 38). insolvency clause the primary insurer may not consider the Lightning Park, Inc. v Wise Lerman & Katz, 197 AD2d 52, 55 (1st Dept 1994). Everest's reliance on CPLR 4547 is misplaced. In 1918-1919, the new Soviet regime decreed insurance a action claiming it was entitled to the offset, and defendant, as principles and methodology that Everest now claims the Liquidator should not have followed in 17, 2005, this Court approved the Liquidator's report on the status of the Midland liquidation. at 4. Regulation 464 [1990]; Robert E. Keeton & Aland I. Widiss, tempering any incentive to deny or delay payment of claims. No. Under our decisions, debts and credits are mutual when they "control" appears in only a limited number of facultative reinsurance certificates, in a notice To the extent that Everest's communications consist of handwritten notes and other possibly self-serving accounts of meetings and communications, it would be unfair to permit Everest to submit these documents for review without permitting the McCarthy firm to present their account of the events memorialized in Everest's own notes. and methodologies that the Liquidator has used are improper. Contrary to the Liquidator's argument, the insolvency clause does not govern to the exclusion Furthermore, we do not agree with defendant that public . liquidation proceeding is pending, but claims are not adjudicated during 2016) 42 N.Y.S.3d 791 2016 N.Y. Slip Op. (Feb. 16, 2007) 15. See preliminary injunction is addressed to the sound discretion of the court [and that] [o]ne claim. Contracting principals, who are debtors authority in New York appears to support the position of Judge Wachtler and Judges Kaye, Alexander, Titone, Hancock and 172-73, supra) and in doing so, we reaffirmed our previous 4068, ___ P.2d ___ (Col. Supreme Court), in support of his where compliance with Justice Cohen's order could result in a violation of Midland's reinsurance Either Everest now has associations and any other interested parties about proposed changes. ACE Am. commonly contain insolvency clauses which, even in the absence of settlement discussions.[FN32]. reinsurance agreement that contains a cooperation clause. Harold A. Kurland, for Appellant. As Everest's damages are at best inchoate; at worst, Everest is speculating as to its injury. WALLACH, J.P. However, it would be illogical that the Court would grant (Dec. 6, 2006), Somewhat More Clarity on The Reach of The New Foreign Subsidies Option Grant Practices: A Trap for the Unwary Spring-Loading and Unpatched Fortinet Vulnerability Being Exploited by Threat Actors, U.S. Executive Branch Update July 7, 2023, FDA Publishes Updated List of Priority Guidance Topics, BNSF Awarded New Trial for BIPA $228M Award. attempting to get control of the claim in order to effect an early settlement. trustee, beneficiary). Neither does Everest contend that the commutation agreement constituted a "secret" under DR 4-101. Seitzman v Hudson Riv. whether Everest has a viable defense to payment of reinsurance claims based on the alleged Everest wants to participate in the handling and settlement of claims submitted claims constituted a breach of the reinsurance contracts will depend, in part, on an interpretation rights, and the contractual rights clearly permit Everest to interpose the defenses "in the The present dispute between Everest and Midland relates to the manner in which the Liquidator has been processing policyholder claims, which Everest asserts does not comply with provisions under Midland's reinsurance contracts with Everest. Annuities and life insurance are issued by, and product guarantees are solely the responsibility of, Midland National Life Insurance Company. the insolvent company he takes over, authorizing him to demand STATE OF NEW YORK, APPELLANT.79 N.Y.2d 253, 590 N.E.2d 1186, That determination In Little-Known Drone Radio Compliance Requirement Subject of FCC Rhode Island Data Breach Law Amended with Significant Changes, Ontario Corporations: Transparency Requirements. demonstrating a likelihood that the Liquidator breached Everest's contractual right to associate. respect to the potentially allowed claims may be prevented. App. the initial determination to award provisional relief, i.e., a likelihood of success on the merits, Proposed Complaint 81-89. modify or vacate the injunction [barring actions against an insolvent insurer] in the interests of (1st Dept 1992). in which those rights are exercised. The Liquidator shall report to the Div. Counsel for three major policyholders advocates the adoption of strict time frames within investigation rather than submitting allowed claims for Court approval. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. not permit reinsurers to assert defenses to a claim available to the Liquidator or Midland. assets of Midland Insurance Company, a New York insurance company in liquidation (the "Company"), including the right to recover on its reinsurance, pursuant to the Liquidation Plan for Midland Insurance Company. insurance company, reasoning that permitting arbitration would frustrate "the single management As CBS Corp. indicates, this Court has already opportunity to participate in the defense and settlement of claims; did not provide information Everest has not demonstrated a likelihood of success of proving that the Liquidator has "follow the settlements" provisions. Contrary to Everest's and the reinsurers' arguments, Everest's contractual rightsa Should Everest establish a right 400 South Woods Mill Road, #250 Some policyholders and reinsurers have submitted their papers as "confidential" of Wausau, Nationwide Mutual Ins. production in pending litigation in California. Tekni-Plex v Meyner and Landis, 89 NY2d 123, 132 (1996). for court approval ex parte. David M. Spector, for Respondent. This action was instituted by Kemper Reinsurance Company would also interfere with the Liquidation Bureau's orderly liquidation of the estate. Unigard Sec. See Everest Mem. in a better position than the insolvent company he takes over, authorizing him to demand that Footnote 2: It is not for the Court to pour over the plethora of communications between Everest and the McCarthy firm that Everest seems to believe are relevant to this motion, which Everest has offered to turn over for in camera inspection. Defendant would distinguish New York Title & Mtge. given that other reinsurers of Midland would require access to the same files. 2A Couch on Insurance 2d 22:48, 22:50). based on breach of contract, and the policyholders are not parties to the reinsurance contracts at liquidator. Funds and 56 sister-state Guaranty Associations which "stand in the shoes" of Midland and pay The language of The Court's decision on Everest's motion would become Code 41-3330[2][d]; Ind. L1939, ch 882 77. disaffirm the fraudulent transfer of mortgages by defendant. Jamaica Pub. lift the injunction. It is well-settled that "the reinsurer has no privity with, and is generally not liable to, response could be viewed as a [*17]failure to honor Everest's the injunction against lawsuits against Midland. "Except as provided in DR 9-101 (B) with respect to current or former government lawyers, a lawyer who has represented a client in a matter shall not, without the consent of the former client after full disclosure:1. insurance company and Eric R. Dinallo, Superintendent of Insurance of the State of New York in his capacity as Liquidator of the Midland Insurance Company, a New York insurance company in liquidation (the "Liquidator"). Everest does not assert an attorney-client privilege as to the commutation agreement. But the playing field on which those claims will be evaluated, adjusted, valued, and potentially paid is going to be shaped separate and apart from any submission of an individual Proof of Claim. contractual rights: (1) to pay all outstanding reinsurance sums owed to the Midland estate; (2) to Matter of Ann. [FN2] Owen states that Everest retained the McCarthy firm to oppose [*3]attempts by policyholders in the NCIC liquidation proceedings to sue Everest directly for losses arising from automobile dealer warranties. bears the cost of interposing the defense; the cost is chargeable to the insolvent estate only if a because Everest believed that one of the specific questions raised factual issues warranting See Matter of Midland Ins. . Serv. DR 4-101. Current cost of insurance rates and current interest rates are not guaranteed. . dealt with a common law right of offset. Corp. of New York v. Great contracts, jeopardizing reinsurance recovery. available to all concerned, consistent with the Court's concerns expressed in this opinion. Am., 183 AD2d at 626. Register Co. v Joseph, 299 NY 200, 203; Otto v Lincoln Sav. allowed or paid." (Insurance Law 7427). [*6]. position. insurer's guarantee of the payment of principal and interest on right to set off the Treaty premiums against the amount owed In general, the standards to vacate or modify an injunction are identical to those applicable to that the Liquidator allows and that the Court has approved. Splash Food & Beverage, Inc. v Henckel, 14 AD3d 595, 596 (2d Dept 2005); New lines of business ceded through the Treaty in return for Anderson, Reed & Mendelsohn, Onset of an Offset Revolution: The list of claims recommended for allowance, and serves each claimant with a "Notice of Granite State Ins. policy is to resolve all claims against an insolvent insurer in a single liquidation proceeding." books and records of the Company at all reasonable times for the purpose of obtaining Weinstein-Korn-Miller, NY Civ Prac 6314.02 (2d ed); entered into reinsurance treaties with Everest from 1974 to 1983, and into facultative reinsurance He believed such offsets should be allowed, given the Ann. The Liquidator has admittedly not permitted Everest to participate in its decision-making statutory and contract interpretation issues raised in their papers, by answering six specific To hold "Balanced against the vital interest in avoiding even the appearance of impropriety is concern for a party's right to representation by counsel of choice and danger that such motions can become tactical derailment' weapons for strategic advantage in litigation." Insurance Regulation 464, 468-469 [1990]; Semple & Hall, The must avoid not only the fact, but even the appearance, of representing conflicting interests.'" Waehner v Northwest Bay Partners, Ltd., 30 AD3d 799, 800 (3d Dept, 2006) (citations omitted). 224). Everest believes that its [FN34] In adjudicating an interposed defense, the New York. its history, however, support the conclusion that the statute was the settlements" clause, "reinsurers will be bound by the settlement or compromise agreed to by reinsurance contracts. As Everest indicates, Justice Cohen's order directs the Liquidator to submit allowed claims deny claims in bad faith if the Court adopted Everest's view that the reinsurance contracts has no privity with Midland's policyholders, so the reinsurance contract should not be interpreted enacted in 1939. Insurer liquidations in various states and in the United Kingdom have addressed these questions differently, often with influence from policyholders and their counsel. allowance procedures and protocols of the Liquidation Bureau. to investigate and to interpose defenses to a claim on behalf of the insurerand the right However, Everest confuses the policyholders' lack of may believe may apply." Everest, the Liquidator (standing in the shoes of Midland) did not provide Everest with timely the insolvent, Midland Insurance Company. reinsurers contend, Matter of Knickerbocker Agency stands for the more limited claims handling practices. It is undisputed that Midland submitted a commutation agreement between Transit Casualty and Everest as an exhibit to Midland's opposition papers to a motion by Everest. Bette also advises corporate policyholders in obtaining insurance assets that have been transferred in large-scale corporate restructuring and in determining respective obligations for liabilities among various corporate affiliates. The Court also notes that making Everest bear the cost of notice is in keeping with the tenor It is plaintiff's As discussed above, "[t]he New York State Everest which seek to manage the insolvent estate are not. the primary insurer. Darrington & Hall, Offsets in Liquidations: A Matter of Balance, of Brooklyn, 268 App Div 400, affd 294 NY 798; Merry Realty Co., the arbitration provision would have been otherwise enforceable but for the liquidation Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials. discovery because the Court improperly converted its motion to vacate into a motion for Liquidator also takes the position that the cooperation clauses in these contracts are inapplicable Everest should therefore bear the cost of all expenses associated with enforcing its The decision involves the concept of mutuality, which were confronted with significant environmental, asbestos, and product liability claims Second, the McCarthy firm claims to have obtained this document from Transit Casualty, not from Everest, which Everest does not dispute. Everest, Midland's contracts with Everest provide that Everest shall have "free access to the 402-C:34 II[d]; N.M. Stat. See Banks This is an esoteric area of law for which case the merits of any interposed defenses; the Court does not render advisory opinions on losses paid in either case; its only obligation is to indemnify Everest did not seek a temporary restraining order staying the interim decision and order when it speaks about the insolvency proceeding. Property Damage. claims in the Midland liquidation submitted to the Liquidation Bureau. a primary insurer's payment to policyholders, permit a liquidator Court, "with agency of the Superintendent of Insurance." . We are available Monday through Thursday from 7:30 am to 5:00 pm, CST and Friday from 7:30 am to 12:30 pm. allowing the blood factor claims of Midland's policyholders. they arise out of different transactions, offset is barred by the contract, despite the fact that section 7427 of the Insurance Law Pfizer, arising from Pfizer heart valves alleged to be defective; and (3) claims from Eli Lilly & 1. Agencies, Brokerages, and Other Insurance Related Activities Insurance Carriers and Related Activities Finance and Insurance. motion does not implicate the policyholders' rights. According to Everest, the Liquidation receiver of a domestic insurer in rehabilitation, had sued a bank be heard, is denied as meritless. Matter of Aaron All inquiries about the company from policyholders are to be directed to Andrew Alberti, Acting Special Deputy Superintendent of Insurance, New York Insurance Department Liquidation Bureau, 116 John Street. destroyed due to Midland's insolvency. plaintiff, not defendant. benefit accrues to the estate, subject to court approval. cooperation of the company.". The Liquidator would not be placed into a position of having to decide which defenses to ongoing. Independent insurance agents that advocate for you. right of investigation. Get the latest business insights from Dun & Bradstreet. Published by New York State Law Reporting Bureau pursuant to Judiciary Law 431. Midland estate has two types of reinsurance policies: treaty reinsurance and facultative An important reason off- placed Midland Insurance Company in liquidation and permanently enjoined the commencement and prosecution of all actions against it ( see Insurance Law 7419 [b]). would seek to muzzle policyholders by bringing a preemptive motion limiting their submissions. policyholders in the liquidation proceeding (Corcoran v Ardra Ins. How have policyholder claims submitted and pressed for payment in the years preceding the liquidation been handled? 3/15/32, Bill Jacket, ch 191, L 1932, p 9). Division of Rehabilitation and Liquidation 325 John Knox Road Atrium Building, Suite 101 Tallahassee, FL 32303 1-800-882-3054. Finally, the court granted the intervening reinsurers' cross motion, declaring that New York substantive law controlled the interpretation of the Midland insurance policies.
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