A District Court has denied a motion by the Oklahoma Commissioner, as receiver of Hospital Casualty Company, to remand or abstain from proceeding with a claim filed by the receiver against a reinsurer on a reinsurance agreement with Hospital Casualty. The Court declined to apply the Burford abstention doctrine, finding that although the case had a financial effect on the liquidation, the issues were not so intertwined with issues of agency authority or state regulatory policy that their resolution in federal court would imperil the regulatory scheme. Holland v. Employers Reinsurance Corp., Case No. 06-0426 (W.D. Ok. Aug. 29, 2006).
Jurisdiction Issues
Court of Appeal addresses jurisdictional issues regarding arbitration-related matters
The United States Court of Appeals for the Fifth Circuit has dismissed an appeal of decisions to grant summary judgment to Lloyd's and remand to state court a case filed by Lloyd's against an insured to recover $39 million in claims paid to an insurer/ reinsured pursuant to a confirmed arbitration award rendered under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This opinion addresses the reviewability of remand decisions and whether the District Court should have retained jurisdiction over state law-based counterclaims. Certain Underwriters at Lloyd’s, London v. Warrantech Corp., Case No. 04-11168 (5th Cir. Aug. 17, 2006).
Denial of pre-pleading security is appealable in Connecticut
The Connecticut Supreme Court, reversing a decision of the Connecticut Appellate Court that found the issue not to be appealable, has found that the denial of a motion for pre-pleading security in a case brought by Hartford against unauthorized reinsurance companies was an appealable final judgment. The Supreme Court remanded the case for consideration of the merits of the appeal by the Court of Appeal. Hartford Accident and Indemnity Co. v. Ace American Reinsurance Co., – A.2d -, 2006 WL 1982910 (Ct. July 25, 2006) (slip opinion).
UK scheme of arrangement binding on non-UK insurers
A UK judge has ruled that he has jurisdiction over non-UK insurance companies to administrer and complete the runoff of a Willis Group-managed insurance/reinsurance pool under the UK's scheme of arrangement process. In re Sovereign Marine, [2006] EWHC 1335 (High Court Chancery Division June 9, 2006).
Jurisdiction discovery allowed as to Barbados-domiciled reinsurer
United States Court of Appeals for the Seventh Circuit reversed the dismissal of a suit against a Barbados-domiciled reinsurer for lack of personal jurisdcition, finding that since the Plaintiff had made a prima facie case for general personal jurisdiction it was entitled to take discovery on jurisdictional issues. Central States, Southeast and Southwest Areas Pension Fund v. Phencorp Reinsurance Company, Inc., – F.3d -, 2006 WL 590370 (7th Cir. Mar. 13, 2006) (slip opinion).