Our insurance recovery attorneys do not stop fighting for full recovery when an insurance company enters insolvency proceedings. They fight harder. Reed Smith attorneys have extensive experience assisting corporate policyholders in opposing insurance company restructurings, defending premium disputes, litigating objections to decisions by Liquidators, pursuing guaranty associations, and crafting creative solutions to enable clients to maximize recovery.
Insurance Company Restructurings
We formed and coordinated a broad-based opposition to the restructuring of the CIGNA insurance companies, representing major corporations in the insurance regulatory and appellate process. We also represented the Fair Care Foundation throughout regulatory and appellate proceedings in opposition to a Blue Cross and Blue Shield merger effort, the beginning of a nationwide trend of success in preventing such mergers. This experience has enabled us to answer questions about the potential effects of other restructurings, such as proposals to restructure monoline insurance entities that have exposure to losses from insuring mortgage-backed securities. We also provide advice regarding commutations and novations, such as those offered by Kemper.
Advocacy in Liquidation Proceedings
Our attorneys regularly advocate for policyholders in insurance insolvency proceedings against state insurance departments acting as liquidators or rehabilitators of insolvent insurance companies. We can lead you through the proof-of-claim process and litigate adverse determinations, if necessary.
Obtaining Access to Reinsurance
Most insurance recovery attorneys would not even consider recovering directly from solvent umbrella insurance or reinsurance when an insurance company becomes insolvent. Showing creativity and tenacity, our lawyers represented a national homebuilder who intervened into insolvency proceedings to assert its rights to receive direct access to reinsurance proceeds, winning a precedent-setting victory in the Legion insolvency proceedings. See Koken v. Legion Ins. Co., 831 A.2d 1196 (Pa. Cmwlth. 2003), aff'd, 878 A.2d 51 (Pa. 2005).
Pursuing Guaranty Associations
Insurance guaranty associations provide a necessary safety net for policyholders. Our knowledge of the pitfalls of guaranty association coverage, including “per claim” and “net worth” limitations, allows us to pursue effectively coverage from all relevant guaranty associations.
Premium and Collateral Disputes
Liquidators are charged with marshaling the assets of the insolvent insurance company’s estate. Often, liquidators believe a policyholder’s assets should become the insurance company’s assets. Premium and collateral disputes are pervasive. Our lawyers have handled these claims effectively in negotiation, arbitration and litigation.