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  • In the Matter of
The Application of
Linda A. Lacewell, Superintendent of Financial Services of the State of New York, for an Order of Appointment as Ancillary Receiver of

BEDIVERE INSURANCE COMPANYSpecial Proceedings - Other (New York Ins. Law Art. 74) document preview
  • In the Matter of
The Application of
Linda A. Lacewell, Superintendent of Financial Services of the State of New York, for an Order of Appointment as Ancillary Receiver of

BEDIVERE INSURANCE COMPANYSpecial Proceedings - Other (New York Ins. Law Art. 74) document preview
  • In the Matter of
The Application of
Linda A. Lacewell, Superintendent of Financial Services of the State of New York, for an Order of Appointment as Ancillary Receiver of

BEDIVERE INSURANCE COMPANYSpecial Proceedings - Other (New York Ins. Law Art. 74) document preview
  • In the Matter of
The Application of
Linda A. Lacewell, Superintendent of Financial Services of the State of New York, for an Order of Appointment as Ancillary Receiver of

BEDIVERE INSURANCE COMPANYSpecial Proceedings - Other (New York Ins. Law Art. 74) document preview
  • In the Matter of
The Application of
Linda A. Lacewell, Superintendent of Financial Services of the State of New York, for an Order of Appointment as Ancillary Receiver of

BEDIVERE INSURANCE COMPANYSpecial Proceedings - Other (New York Ins. Law Art. 74) document preview
  • In the Matter of
The Application of
Linda A. Lacewell, Superintendent of Financial Services of the State of New York, for an Order of Appointment as Ancillary Receiver of

BEDIVERE INSURANCE COMPANYSpecial Proceedings - Other (New York Ins. Law Art. 74) document preview
  • In the Matter of
The Application of
Linda A. Lacewell, Superintendent of Financial Services of the State of New York, for an Order of Appointment as Ancillary Receiver of

BEDIVERE INSURANCE COMPANYSpecial Proceedings - Other (New York Ins. Law Art. 74) document preview
  • In the Matter of
The Application of
Linda A. Lacewell, Superintendent of Financial Services of the State of New York, for an Order of Appointment as Ancillary Receiver of

BEDIVERE INSURANCE COMPANYSpecial Proceedings - Other (New York Ins. Law Art. 74) document preview
						
                                

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FILED: NEW YORK COUNTY CLERK 07/21/2021 06:52 PM INDEX NO. 451540/2021 NYSCEF DOC. NO. 62 RECEIVED NYSCEF: 07/21/2021 EXHIBIT D FILED: NEW YORK COUNTY CLERK 07/21/2021 05/24/2021 06:52 09:51 PM AM INDEX NO. 451540/2021 NYSCEF DOC. NO. 62 1 RECEIVED NYSCEF: 07/21/2021 05/24/2021 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ---------------------------------------------------------------------x In the Matter of Index No.: the Application of VERIFIED PETITION Linda A. Lacewell, Superintendent of Financial Services of the State of New York, for an Order of Appointment as Ancillary Receiver of BEDIVERE INSURANCE COMPANY. ---------------------------------------------------------------------x Linda A. Lacewell, Superintendent of Financial Services of the State of New York (“Superintendent”), respectfully petitions the Court for an order, substantially in the form attached hereto as Exhibit “1” (“Order”), appointing the Superintendent (and her successors in office) ancillary receiver (“Ancillary Receiver”) of Bedivere Insurance Company (“Bedivere”) with all the rights and obligations granted to and imposed upon her pursuant to Article 74 of the New York Insurance Law (“Insurance Law”). Relief Requested 1. Bedivere, a Pennsylvania domestic insurer, has been judicially determined to be insolvent and has been placed into liquidation by the Commonwealth Court of Pennsylvania (“PA Court”). There are New York claimants with claims under Bedivere insurance policies. It is important that a New York ancillary receivership be commenced for Bedivere in order for New York claimants with allowed covered claims to receive coverage from the applicable New York security fund. Bedivere is currently paying workers’ compensation claims under insurance policies written by Bedivere that in an ancillary proceeding would be eligible for payment from the New York Workers’ Compensation Security Fund. See N.Y. Workers’ Comp. L., Art. 6-A. 1 of 9 FILED: NEW YORK COUNTY CLERK 07/21/2021 05/24/2021 06:52 09:51 PM AM INDEX NO. 451540/2021 NYSCEF DOC. NO. 62 1 RECEIVED NYSCEF: 07/21/2021 05/24/2021 It is estimated that hundreds of workers’ compensation claims will be referred by the Pennsylvania Liquidator for handling within a New York ancillary receivership proceeding. Commencing this ancillary receivership proceeding as soon as practicable is necessary to ensure there is not an interruption in workers’ compensation benefits, including medical and pharmacy benefits. In addition, it is estimated that hundreds of property/casualty claims may be referred to the New York Property/Casualty Insurance Security Fund by the Pennsylvania Liquidator for handling within a New York ancillary receivership proceeding. (Affidavit of Joan Riddell, Deputy Chief Insurance Examiner, Property Bureau, New York State Department of Financial Services, sworn to on April 27, 2021 (“Riddell Aff.”), attached hereto as Exhibit “2”, ¶¶ 7-8). Background 2. Bedivere is a domestic stock property/casualty insurer domiciled in the Commonwealth of Pennsylvania. Its principal place of business is at 1880 JFK Boulevard, Suite 80, Philadelphia, PA 19103. See Riddell Aff. ¶ 1. 3. Bedivere is part of an insurance holding company system. Trebuchet US Holdings, Inc., a Delaware company, is the 100% owner and sole shareholder of Bedivere. (Riddell Aff. ¶1) 4. Bedivere became licensed to do business as an authorized foreign insurer in the State of New York on or about December 14, 1956. (Riddell Aff. ¶2). 5. Bedivere was authorized to transact the business of insurance set forth in paragraphs 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 19, 20, 21, 26, and 29 of Section 1113(a) of the Insurance Law. (Riddell Aff. ¶3). 6. On March 11, 2021, the PA Court found Bedivere to be insolvent and issued an order placing Bedivere into liquidation (“Liquidation Order”) and appointing Jessica K. Altman, 2 2 of 9 FILED: NEW YORK COUNTY CLERK 07/21/2021 05/24/2021 06:52 09:51 PM AM INDEX NO. 451540/2021 NYSCEF DOC. NO. 62 1 RECEIVED NYSCEF: 07/21/2021 05/24/2021 Pennsylvania Commissioner of Insurance, Statutory Liquidator of Bedivere (“Pennsylvania Liquidator”). The Liquidation Order also, among other things, established procedures that, in turn, established December 31, 2021 as the bar date for the filing of all claims against Bedivere. See Liquidation Order (Riddell Aff. ¶ 4, Exhibit “A”). The Grounds to Commence an Ancillary Receivership Proceeding Have Been Met 7. Insurance Law § 7407(c) states that, upon the request of a receiver who has been appointed for an insurer in its domiciliary state, the Superintendent shall apply to this Court for an order appointing her ancillary receiver for such insurer if the domiciliary state is a reciprocal state. 8. On March 12, 2021, the Pennsylvania Liquidator sent a letter, a copy of which is annexed as Exhibit “B” to the Riddell Aff., requesting that the Superintendent commence an ancillary receivership proceeding for Bedivere (“Letter Request”). Riddell Aff. ¶ 5, Exhibit “B”. 9. Pennsylvania is a reciprocal state. Insurance Law § 7408(b)(6) defines a reciprocal state as any state, other than the State of New York, in which the provisions of the Uniform Insurers Liquidation Act (Insurance Law §§ 7408-7415), in substance and effect, are in force. Pennsylvania, Bedivere’s domiciliary state, has adopted, in substance and effect, the provisions of the Uniform Insurers Liquidation Act. Pennsylvania Insurance Department Act, Article V, 40 P.S 221.12, 221.15, 221.17, 221.20, 221.55, and 221.58. See Letter Request. (Riddell Aff. ¶ 6, Exhibit “B”). 10. Based on the Letter Request from Pennsylvania, a reciprocal state, the Superintendent now brings this application under Insurance Law § 7407 to commence an ancillary receivership proceeding for Bedivere. Since all of the grounds to commence an ancillary receivership proceeding have been met, this Court should issue the Order commencing 3 3 of 9 FILED: NEW YORK COUNTY CLERK 07/21/2021 05/24/2021 06:52 09:51 PM AM INDEX NO. 451540/2021 NYSCEF DOC. NO. 62 1 RECEIVED NYSCEF: 07/21/2021 05/24/2021 an ancillary receivership proceeding and pursuant to Insurance Law § 7410(a), appointing the Superintendent as Ancillary Receiver. Injunctive Relief 11. To discharge the responsibilities as Ancillary Receiver in an orderly and fair manner for the benefit of policyholders and creditors domiciled in the State of New York, certain injunctive relief is necessary. 12. I respectfully request that this Court explicitly apply the injunctions, restrictions and directions contained in paragraphs 7, 13, 14, and 15 of the Liquidation Order to any and all business of Bedivere that is conducted in the State of New York, and to any and all assets, books, records, files, credit cards, and other property of Bedivere located in the State of New York. While these injunctions, directions, and restrictions, as well as the entire Liquidation Order, were issued by a court of competent jurisdiction and apply to this ancillary proceeding, an explicit ruling from this Court that the injunctions, directions, and restrictions issued in paragraphs 7, 13, 14, and 15 of the Liquidation Order apply to this ancillary receivership proceeding will promote clarity and reduce the likelihood of unnecessary litigation. 13. Under Insurance Law § 7419(b), the Court may issue permanent injunctions or orders to prevent the commencement or prosecution of any actions, the obtaining of preferences, judgments, attachments, or other liens or making any levy against the Ancillary Receiver, Bedivere, the New York Liquidation Bureau (the organization serving as the Ancillary Receiver’s staff), or their present or former employees, attorneys, or agents, with respect to this proceeding or the discharge of their duties under Insurance Law Article 74 in relation thereto (the “Permanent Injunctions”). 4 4 of 9 FILED: NEW YORK COUNTY CLERK 07/21/2021 05/24/2021 06:52 09:51 PM AM INDEX NO. 451540/2021 NYSCEF DOC. NO. 62 1 RECEIVED NYSCEF: 07/21/2021 05/24/2021 14. The Permanent Injunctions are important for the performance of the Ancillary Receiver’s duties. Failure to grant this relief could result in one or more persons or entities rushing to pursue legal action, including collections and default judgments, in the State of New York against Bedivere. This would adversely impact the ancillary receivership and could significantly increase administrative expenses and litigation costs. 15. In addition to the Permanent Injunctions, I request an order under Insurance Law § 7419(b) temporarily staying all litigations against insureds of Bedivere or in which Bedivere is obligated to defend an insured or provide a defense to a party pursuant to an insurance policy, for a period of 180 days from the date of entry of the Order of Ancillary Receivership (the “180-Day Injunction”). The 180-Day Injunction will temporarily stay all matters currently in litigation and will allow the Ancillary Receiver and the Superintendent as administrator of the New York security funds (“Administrator”) sufficient time to review and assess the claims in litigation. 16. I also request an order under Insurance Law § 7419(b) temporarily enjoining and restraining all persons who have first-party policyholder loss claims against Bedivere in the State of New York from presenting and filing claims with the Ancillary Receiver for a period of 90 days from the date the Ancillary Receivership Order is signed (the “90-Day Injunction”). Eligible first-party claims in New York are referred to the Ancillary Receiver who determines whether a referred claim is covered by one of the security funds. 17. After Bedivere is placed into ancillary receivership, the Pennsylvania Liquidator will transfer the books and records of the company relating to certain New York claims under policies written by Bedivere, including litigation files, to the Ancillary Receiver and Administrator for further handling. Because the files and records of an insolvent insurer often require time to review and assess, a temporary stay is necessary to ensure that claims are 5 5 of 9 FILED: NEW YORK COUNTY CLERK 07/21/2021 05/24/2021 06:52 09:51 PM AM INDEX NO. 451540/2021 NYSCEF DOC. NO. 62 1 RECEIVED NYSCEF: 07/21/2021 05/24/2021 appropriately handled and that there is no prejudice to the company or its policyholders during the transition to ancillary receivership. 18. The 180-Day Injunction and 90-Day Injunction will allow the Ancillary Receiver and Administrator to: (i) review the New York claims and litigations; (ii) coordinate with third- party administrators for handling claims; (iii) assign claims examiners; (iv) review settlement negotiations, if any; (v) analyze the legal issues; (vi) set reserves; (vii) assign or retain counsel; and (viii) prepare to litigate the matters, if necessary, upon the expiration of the 180-Day Injunction and 90-Day Injunction. The injunctions sought here are virtually the same injunctions as are granted in every ancillary proceeding and could be considered routine. In the Matter of the Ancillary Receivership of American Country Insurance Company, S. Ct., N.Y. County, Index #452250/2020, Order of December 16, 2020; In the Matter of the Ancillary Receivership of American Service Insurance Company, S. Ct., N.Y. County, Index #452249/2020, Order of December 2, 2020; In the Matter of the Ancillary Receivership of Northwestern National Insurance Company of Milwaukee, Wisconsin, S. Ct., N.Y. County, Index #450931/2019, Order of August 8, 2019. Copies of the ancillary receivership orders in each of these ancillary receivership proceedings are annexed hereto as Exhibit “3.” 19. For these reasons, the 180-Day Injunction and 90-Day Injunction are warranted under Insurance Law § 7419(b), and this Court should issue an order, inter alia, granting the injunctions. Additional Relief 20. I further respectfully submit that Insurance Law § 7412(a) makes clear that the claims bar date of December 31, 2021 in the Bedivere liquidation proceeding applies to this ancillary receivership proceeding and requires that all New York claims under Bedivere policies 6 6 of 9 FILED: NEW YORK COUNTY CLERK 07/21/2021 05/24/2021 06:52 09:51 PM AM INDEX NO. 451540/2021 NYSCEF DOC. NO. 62 1 RECEIVED NYSCEF: 07/21/2021 05/24/2021 and evidence supporting such claims be submitted to the Ancillary Receiver of Bedivere by December 31, 2021. Claims and evidence not submitted by that date shall be barred. Applying the claims bar date to the ancillary receivership proceeding will maintain an appropriate relationship between the ancillary proceeding and the domestic liquidation of Bedivere, and will ensure that claims paid by the New York security funds will be eligible for reimbursement in the domestic liquidation proceeding. 1 21. I further respectfully request that the Court order that the Superintendent as Ancillary Receiver, her successors in office, and the New York Liquidation Bureau and their agents and employees, be granted judicial immunity from any cause of action of any nature against them, individually or jointly, for any act or omission when acting in good faith, in accordance with the orders of the Court, or in the performance of their duties pursuant to Insurance Law Articles 74 and 76 and Article 6-A of the New York Workers’ Compensation Law. The Ancillary Receiver acts in a “judicial and private” capacity under the supervision of the Court pursuant to Article 74 of the Insurance Law. Dinallo v. DiNapoli, 9 N.Y.3d 94, 103 (2007). In addition, “a court-appointed receiver acts as an arm of the court and is immune from liability for actions grounded in his or her conduct as receiver.” In the Matter of the Liquidation of U.S. Capital Insurance Company, 36 Misc.3d 635, 637 (Sup. Ct., N.Y. County 2012). Conclusion 22. In light of the foregoing, I respectfully request that the Court enter the Order, which, among other things: (a) appoints the Superintendent Ancillary Receiver of Bedivere, pursuant to Insurance Law §§ 7407(c) and 7410(a); and (b) vests the Ancillary Receiver with all The New York security funds will assert claims in Bedivere’s domestic liquidation proceeding for reimbursement 1 of amounts paid to eligible New York claimants. 7 7 of 9 FILED: NEW YORK COUNTY CLERK 07/21/2021 05/24/2021 06:52 09:51 PM AM INDEX NO. 451540/2021 NYSCEF DOC. NO. 62 1 RECEIVED NYSCEF: 07/21/2021 05/24/2021 rights and obligations granted to and imposed upon her pursuant to Article 74 of the Insurance Law. 8 8 of 9 FILED: NEW YORK COUNTY CLERK 07/21/2021 05/24/2021 06:52 09:51 PM AM INDEX NO. 451540/2021 NYSCEF DOC. NO. 62 1 RECEIVED NYSCEF: 07/21/2021 05/24/2021 Please note that this was notarized in accordance to Governor Cuomo's EO 202.7. 9 of 9