News & Analysis as of

Disgorgement Insurance Industry

Frantz Ward LLP

Sixth Circuit Revives an Equitable Claim for Disgorgement Under ERISA Where an Insurer Obtained Reimbursement is Not Set Forth in...

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In Patterson v. United Healthcare Insurance Company, 76 F.4th 487 (6th Cir. 2023), the Sixth Circuit held that the plaintiff insured had stated an equitable claim for disgorgement under ERISA where he sought disgorgement of...more

The Wagner Law Group

Pension Risk Transfers and the Continuing Concern About Buying a Pig in a Poke

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Pension risk transfers (“PRTs”) continue to make the news. And well they should. Last year alone, over $100 billion in liabilities were transferred from defined benefit pension plans to insurance companies. And the trend...more

Bradley Arant Boult Cummings LLP

Insurance May Cover Your False Claims Act Settlement

On May 3, 2023, the Seventh Circuit affirmed $10 million in insurance coverage for a False Claims Act (FCA) settlement in a case based on alleged Anti-Kickback Statute violations. Astellas US Holding, Inc. v. Federal...more

King & Spalding

Southern District of Ohio Finds Bank’s Settlement of Fraudulent Transfer Claim Uninsurable

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On December 16, 2022, the U.S. District Court for the Southern District of Ohio held that a settlement of a fraudulent transfer suit was not covered under the settling defendant’s insurance policies. Huntington National Bank...more

Rivkin Radler LLP

New York Insurance Coverage Law Update - December 2021

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New York Court of Appeals Holds That Disgorgement Payment Under SEC Settlement Not Excluded As A Penalty Imposed By Law- The Securities and Exchange Commission (SEC) alleged that Bear Stearns facilitated late trading and...more

Pillsbury - Policyholder Pulse blog

Insurability Update: New York High Court Affirms Coverage for Settlement Amount Labeled “Disgorgement”

Last month, we discussed a decision by the Northern District of Illinois finding an amount labeled “restitution” in a settlement between a pharmaceutical company and the DOJ was insurable loss under a D&O policy. Shortly...more

Lowenstein Sandler LLP

New York’s Highest Court Says D&O Insurers Must Cover Disgorgement Payments

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On November 23, 2021, New York’s highest court resolved a long-standing dispute between directors and officers (D&O) liability insurers and their insureds, holding that a settlement payment to the U.S. Securities and Exchange...more

Pillsbury - Policyholder Pulse blog

In Another Blow to the “Uninsurability” Defense, Court Holds that Settlement Labeled “Restitution” Is Insurable

In previous posts, we have emphasized the continued judicial trend rejecting insurer arguments that losses purportedly sounding in restitution or disgorgement are “uninsurable” under D&O policies. Despite that trend, insurers...more

Lowenstein Sandler LLP

In the Know: The Lowenstein Insurance Recovery Group’s Tip of the Month - October 2021

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A recent coverage case from Illinois is a helpful reminder to policyholders that they should not take no for an answer when insurers deny a claim based on uninsurability, restitution, disgorgement, or fraud. In fact, those...more

Carlton Fields

Eleventh Circuit Explicitly Adopts Distinction Following Hoover to Confirm That Coverage Cannot Be Created Through Waiver or...

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On July 30, 2020, the Eleventh Circuit Court of Appeals in AEGIS Electric & Gas International Services Ltd. v. ECI Management LLC reversed the trial court’s grant of summary judgment in favor of an insurer, AEGIS Electric &...more

Manatt, Phelps & Phillips, LLP

Insurance Won’t Cover Disgorgement Payment, NY Appellate Court Rules

Applying a U.S. Supreme Court decision in the context of insurance coverage for a bank, a New York appellate court ruled that the amounts paid to the Securities and Exchange Commission (SEC) as disgorgement under a cease and...more

Morris James LLP

Delaware Superior Court Explains Disgorgement Exclusion In Insurance Coverage

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D&O policies often attempt to exclude from coverage sums paid to disgorge unlawful profits. The underlying theory is that the company did not suffer a true loss when it has to give back something that it never should have had...more

Carlton Fields

Court Compels Arbitration To Determine The Arbitrability Of Reinsurance Dispute With Captive Insurance Company

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In a suit by an auto body company against a captive insurance company for rescission of certain workers compensation reinsurance participation agreements, for disgorgement of $70,000 paid thereunder, and for fraud, breach of...more

Baker Donelson

PHH Mortgage Attacks the CFPB: Will the Bureau Become a Commission?

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On April 12, the U.S. Court of Appeals for the D.C. Circuit heard arguments in PHH Mortgage’s appeal of a $109,000,000 disgorgement order by the CFPB. The CFPB found PHH had illegally referred consumers to mortgage insurers...more

BakerHostetler

PHH Fine on Hold, Says D.C. Circuit

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On August 3, 2015, the D.C. Circuit Court of Appeals entered an order staying Consumer Financial Protection Bureau (CFPB) Director Richard Cordray’s June 4, 2015, order imposing injunctive relief and disgorgement of over $109...more

Cozen O'Connor

Insurance Fraud Act Suits by Insurers Held to Trigger Right to Jury Trials in New Jersey

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Last week, the New Jersey Supreme Court unanimously held that a civil defendant sued by an insurance company for violations of the state’s Insurance Fraud Prevention Act (IFPA) has the right to trial by jury. In Allstate New...more

BakerHostetler

CFPB Enforces RESPA in its First Appellate Decision of the Director

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In the first appeal of an administrative enforcement proceeding before the Consumer Financial Protection Bureau (“Bureau”), the administrative law judge (ALJ) concluded that PHH Corporation, a mortgage lender, referred...more

Carlton Fields

Sixth Circuit Holds No Disgorgement of Profits Based on Wrongfully Denied ERISA Disability Benefits

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The Sixth Circuit Court of Appeals, sitting en banc, recently decided a closely-watched case regarding the scope of "other appropriate equitable relief" under ERISA Section 502(a)(3). In Rochow v. LINA, the court held that...more

Baker Donelson

Sixth Circuit Issues Shocking Opinion Against ERISA Insurer, Dramatically Changes The ERISA Landscape

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In what can only be described as a shocking opinion, the Sixth Circuit Court of Appeals issued a 2-1 decision affirming a lower court's award of $3.8 million dollars in disgorged profits to a former president of Arthur J....more

Orrick, Herrington & Sutcliffe LLP

Policy Observer - July 2013

Getting Over the Bar: Second Circuit Requires Actual Payment of Underlying Limits In Order to Trigger Excess D&O Policies - In June, the Second Circuit held that two Federal Insurance Company ("FIC") excess D&O...more

Manatt, Phelps & Phillips, LLP

Insurance Recovery Law -- Jun 27, 2013

Policyholders Who Audit Their Policy Language Before Coverage Disputes Arise Can Avoid Problems Down The Road - Policyholders purchase excess insurance policies to provide themselves with additional layers of...more

K&L Gates LLP

The New York Court of Appeals’ Vigilant Decision: A Welcome Return to Enforcing Insurance Contracts as Written

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In a much-anticipated decision, New York’s highest court, the New York Court of Appeals, on June 11, 2013, unanimously rejected a group of insurers’ attempt to invoke purported “public policy” considerations to avoid covering...more

Proskauer Rose LLP

New York's Highest Court Sends Strong Signal That Insurance Companies Will Be Held To Their Coverage Obligations

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On June 11, 2013, the New York Court of Appeals decided two groundbreaking insurance coverage cases on public policy grounds....more

Pillsbury Winthrop Shaw Pittman LLP

J.P. Morgan Decision Curtails the Phantom “Restitution Defense” to D&O Coverage

In a case closely watched by industry observers, the New York Court of Appeals, in J.P. Morgan Securities v. Vigilant Insurance Company, No. 113 (NY, June 13, 2013), issued an important ruling in the field of directors and...more

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