Preview
FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023
NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
------------------------------------------------------------------------x
BARRY YAMPOL,
Plaintiff, Index No. 601285/2023
-against- Judge Danielle M. Peterson
CERTAIN UNDERWRITERS AT LLOYD’S, LONDON, Motion Seq. 002
including those subscribing to Syndicate Nos. MIT 3210,
PEM 4000, TAL 1183, MKL 3000, CGM 2488, AXS 1686,
CSL 1084, ASP 4711, COF 1036, AUW 0609, TRV 5000,
ARK 4020, AAL 2012, ADV 0780, AUL 1274, AFB 2623,
AFB 0623, AES 1225, ANV 1861, ENH 5151, WRB 1967,
BRT 2987, Apollo 9975, CHN 2015, KLN 0510,
Defendants.
------------------------------------------------------------------------x
MEMORANDUM OF LAW IN OPPOSITION BY CERTAIN
UNDERWRITERS AT LLOYD’S, LONDON
CLYDE & CO US LLP
The Chrysler Building
405 Lexington Avenue, 16th Floor
New York, New York 10174
Tel: (212) 710-3900
Attorneys for Defendants Certain
Underwriters at Lloyd’s, London
1 of 10
FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023
NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023
TABLE OF CONTENTS
Page(s)
PRELIMINARY STATEMENT .................................................................................................... 1
ARGUMENT .................................................................................................................................. 1
POINT I
SECTION 1213(e) RELIEVES UNDEWRITERS OF ANY OBLIGATION TO
POST PRE-ANSWER SECURITY ........................................................................................ 1
POINT II
POSTING PRE-ANSWER SECURITY IS ALSO UNNECESSARY BECAUSE
UNDERWRITERS MAINTAIN SUFFICIENT FUNDS IN NEW YORK STATE.............. 3
CONCLUSION ............................................................................................................................... 6
i
2 of 10
FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023
NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023
TABLE OF AUTHORITIES
Page(s)
Cases
Atlas Feather Corp. v. Pine Top Ins. Co., 122 A.D.2d 241 (2d Dep’t 1986) ................................ 3
Willis Pawnbrokers, Inc. v. Ambassador Insurance Co., 100 A.D.2d 771
(1st Dep't 1984) .............................................................................................................................. 3
Statutes
New York Insurance Law § 1213 ....................................................................................... 1, 2, 3, 5
New York Insurance Law § 2105 ................................................................................................... 2
New York Insurance Law § 59a ..................................................................................................... 3
ii
3 of 10
FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023
NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023
PRELIMINARY STATEMENT
While a separate motion to dismiss the Complaint is pending, Plaintiff has moved to force
Underwriters to post bond for more than $48 million1 only three months after filing suit. Plaintiff’s
application is legally unsound and should fail.
The very statute cited by Plaintiff – Insurance Law § 1213 – exempts insurance policies
like the one here (the “Policy”) from pre-pleading security requirements because the Policy: (i)
was procured by a New York-licensed broker; and (ii) designates the Superintendent of Insurance
(now the Superintendent of the Department of Financial Services) as Underwriters’ agent for
service of process. Additionally, the Court can and should reject Plaintiff’s motion on the ground
that Underwriters maintain more than sufficient assets within New York to satisfy a final judgment
in Plaintiff’s favor.2 For these reasons, and as set forth in more detail below, Plaintiff’s motion
should be denied.
ARGUMENT
POINT I
SECTION 1213(e) RELIEVES UNDEWRITERS OF ANY OBLIGATION TO POST
PRE-ANSWER SECURITY
New York Insurance Law Section 1213 does generally apply to “unauthorized foreign or
alien” insurers that issue or “deliver contracts of insurance to residents of this state or corporations
authorized to do business therein,” and Section 1213(c)(1) can, under certain circumstances,
require those insurers to post pre-answer security. However, Plaintiff conveniently ignores the
exception provided in this statute, Section 1213(e), which states:
1
The limits of Plaintiff’s Policy are $42 million. Plaintiff cites to no case law in support of his point that he is entitled
to pre-judgment interest in connection with the amount of any potential posting of a pre-answer security.
2
The facts of this case are laid out in detail in Underwriters’ motion to dismiss Plaintiff and are incorporated herein
by reference. (See NYSCEF 13-27.)
1
4 of 10
FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023
NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023
(e) This section shall not apply to any proceeding against any unauthorized foreign
or alien insurer arising out of any contract of insurance effectuated in accordance
with subsection (b) or (c) of section two thousand one hundred seventeen of this
chapter or in accordance with section two thousand one hundred five of this chapter
where such contract designates the superintendent or his successors in office the
true and lawful attorney upon whom may be served all lawful process in any
proceeding instituted by or on behalf of an insured or beneficiary arising out of such
contract.
Section 2105, which is referenced in Section 1213(e), pertains to policies obtained by New
York excess and surplus lines brokers, as this one was. Here, the Policy documentation makes
clear that it was classified as “Surplus Lines” and the Surplus Lines broker was the insured’s
producing broker, Frenkel & Co Inc, located in New York, New York. See Ederer Aff., Ex. A at
page 20 of PDF (marked as page 2 of 3). Thus, within the meaning of Section 2105, the first prong
of 1213(e) exception is satisfied.
The requirement that the insurance policy in question designates “the superintendent or his
successors in office the true and lawful attorney upon whom may be served all lawful process in
any proceeding instituted by or on behalf of an insured or beneficiary arising out of such contract”
has also been met. This is because the Policy’s Service of Suit Clause (see Ederer Aff., Ex. A at
page 12 of PDF (marked as page 12 of 18)) clearly sets forth the required statutory language by
stating:
Further, pursuant to any statute of any state, territory or district of the United States
which makes provision therefor, Underwriters hereon hereby designate the
Superintendent, Commissioner or Director of Insurance or other officer specified
for that purpose in the statute, or his successor or successors in office, as their true
and lawful attorney upon whom may be served any lawful process in any action,
suit or proceeding instituted by or on behalf of the Insured ( or Reinsured) or any
beneficiary hereunder arising out of this contract of insurance ( or reinsurance), and
hereby designate the above-named as the person to whom the said officer is
authorized to mail such process or a true copy thereof.
Plaintiff and his counsel are well-aware of this provision, as they served Underwriters by
delivering twenty-one (21) separate summonses to the Superintendent of the New York State
2
5 of 10
FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023
NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023
Department of Financial Services on three separate occasions (January 26, 2023, February 8, 2023
and February 9, 2023, respectively).3 See Ederer Aff., Ex. B. Together with the Policy language
itself, Plaintiff's compliance with that language establishes that the second prong of the 1213(e)
exception is also met.4
In sum, the exception set forth in Section1213(e) has been satisfied, as the Policy was
issued through a New York excess/surplus lines broker and specifically designated the
Superintendent as Underwriters’ attorney for receipt of service of process. For these reasons alone,
Plaintiff’s motion must be denied. Willis Pawnbrokers, Inc. v. Ambassador Insurance Co., 100
A.D.2d 771, 474 N.Y.S.2d 44 (1st Dep’t 1984). See also, e.g., Atlas Feather Corp. v. Pine Top
Ins. Co., 122 A.D.2d 241, 242, 505 N.Y.S.2d 436, 437 (2d Dep’t 1986) (affirming lower court
decision that application of Section 59–a(5) (which is now Section 1213(e)) in that case rendered
Section 59-a(3)(a) (which is now 1213(c)(1)) inapplicable).5
POINT II
POSTING PRE-ANSWER SECURITY IS ALSO UNNECESSARY BECAUSE
UNDERWRITERS MAINTAIN SUFFICIENT FUNDS IN NEW YORK STATE
Alternatively, Section 1213(c)(1)(A) states, in relevant part, that “the court may in its
discretion make an order dispensing with such deposit or bond if the superintendent certifies to it
3
As the Court is aware, the New York State Insurance Department was abolished in 2011 and the functions and
authority of same were transferred to the New York State Department of Financial Services.
4
The decision by the Appellate Division, First Department in Willis Pawnbrokers, Inc. v. Ambassador Insurance Co.,
100 A.D.2d 771, 474 N.Y.S.2d 44 (1st Dep’t 1984) is instructive here. Like Plaintiff, the insured in Willis was unable
to obtain insurance from an authorized insurance company, i.e. an insurer licensed to do business in the State of New
York. As such, the insured obtained coverage through a licensed excess/surplus lines broker from defendant
Ambassador Insurance Co. (“AIC”). The AIC policy designated the superintendent as AIC’s attorney for service of
process. Based on these facts, the court held that AIC was not obligated to post security before answering the insured's
complaint. Willis, 474 N.Y.S.2d at 45. Section 59–a, which both Willis and Atlas were decided under, was recodified
as §1213 on September 1, 1984 with minor changes. Both statutes have identical purpose subsections.
5
Not one of the cases cited by Plaintiff even mentions Section 1213(e).
3
6 of 10
FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023
NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023
that such insurer maintains within this state funds or securities in trust or otherwise sufficient and
available to satisfy any final judgment which may be entered in the proceeding.” Without asking
for confirmation before filing his motion, Plaintiff alleges that, “[t]o Plaintiff’s knowledge,
Defendants have received no such certification” from the Superintendent. However, a
straightforward inquiry would have confirmed that Underwriters maintain sufficient funds, such
that Plaintiff’s motion was both unnecessary and without merit.
As articulated by the New York State Office of General Counsel (“OGC”) opinion letter
dated December 17, 2004 (OGC Opinion No. 04-12-17), there is no such certification function by
the Superintendent and, hence, there is no process to apply to be certified. See Ederer Aff., Ex. C.
Instead, parties seeking such certification are advised to “consult the list of eligible insurers
maintained by the Excess Line Association of New York (‘ELANY’), on its website at
www.elany.org.” Id.
A simple search of the ELANY list reveals not only a list of eligible, New York excess line
insurers, but also a searchable sub-section for “Lloyd’s Syndicates”. Of the 25 Lloyd’s Syndicates
named as defendants by Plaintiff in this action, twenty-three (23)6 can be found on the current
ELANY list. See Ederer Aff., Ex. D. Pursuant to the ELANY Compliance Advisor (which was
revised and reissued in September 2022), foreign insurers must maintain (as of January 1, 2022) a
minimum of $48 million of policyholders’ surplus to be eligible for the ELANY list. See Ederer
Aff., Ex. E.
In addition, Underwriters note that these same twenty-three (23) Underwriters also appear
on the NAIC International Insurer Department’s most recent “Quarterly List of Alien Insurers”.
6
This includes both members of the Apollo 9957 consortium, which includes Apollo 1969 and Apollo 1955. See
Affirmation of Sabrina N. Miesowitz, Esq. at ¶10, n.1.
4
7 of 10
FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023
NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023
See Ederer Aff., Ex. F (“IID List”). For Lloyd’s syndicates like Underwriters to be included in the
IID List, a core requirement is a United States trust fund of not less than $100 million available
for the benefit of all Lloyd’s U.S. Surplus lines policyholders. See Ederer Aff., Ex. G (2023 NAIC
International Insurers Department Plan of Operation). As of February 2023, the Lloyd’s American
Surplus or Excess Lines Insurance Joint Asset Trust Fund (“JATF”) contained funds valued
$108,361,699, more than two times the amount of a potential final judgment in this case. This
amount was certified through the end of 2023 by Lloyd’s trustee in New York, Citibank, N.A.,
which maintains Lloyd’s JATF account. See Miesowitz Aff., ¶¶ 9-11; Ex. A.
Most importantly, the JATF funds apply not only to the twenty-three syndicates on the
current ELANY and NAIC lists but also legacy syndicates which are now in “run-off” like the
remaining two defendants, MIT 3210 and ADV 780.7 See Miesowitz Aff., ¶ 10; n.2. These
syndicates, which were on the NAIC List at the time of the issuance of the Policy (see Ederer Aff.,
Ex. H), therefore remain in compliance with their obligations according to New York’s OGC.8
Based on the foregoing, Underwriters respectfully submit that they all maintain sufficient
funds in the New York State such that even if the Court believed the exception to Section 1213
did not apply, the Court should exercise its discretion under Section 1213 and dispense with the
pre-answer security requirement articulated therein.9
7
MIT 3210 and ADV 780 were also previously listed on ELANY and only recently came off. See Ederer Aff., Ex. I.
8
Underwriters note that OGC Opinion No. 06-08-12 (Ederer Aff., Ex. J) states that N.Y. Ins. Law § 1213(e) applies
to excess line insurers which were formerly listed on ELANY, like MIT 3210 and ADV 780, when the Policy in
question designates the Superintendent as their attorney upon whom lawful process may be served (which the Policy
does in this case), and provided these insurers have sufficient funds in its excess line trust fund that is available to
satisfy any final judgment which, as a result of the Joint Asset Trust Fund, they do.
9
The Court may be interested to know that a perfunctory review of NYSCEF, the New York State Uniform Court
System’s e-filing system, revealed 29 cases in Nassau County since 2013 wherein Certain Underwriters at Lloyd’s
and/or Lloyd’s syndicates were parties. In not one of those cases did a Nassau County Court order the Lloyd’s
underwriters to file a pre-answer bond.
5
8 of 10
FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023
NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023
CONCLUSION
Based on the foregoing, Underwriters respectfully submit that Plaintiff’s motion should be
denied in its entirety.
Dated: New York, New York
May 5, 2023
CLYDE & CO US LLP
By: /s/ Jason L. Ederer
Owen B. Carragher
Jason L. Ederer
David C. Sienko
405 Lexington Avenue, 16th Floor
New York, New York 10174
(212) 710-3900
owen.carragher@clydeco.us
jason.ederer@clydeco.us
david.sienko@clydeco.us
Attorneys for Defendants Certain
Underwriters at Lloyd’s, London
6
9 of 10
FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023
NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023
ATTORNEY CERTIFICATION PURSUANT TO NYCRR 202.8b
I, Jason L. Ederer, an attorney admitted to practice before the Courts of the State of New
York, hereby certify that the word count of the attached Memorandum of Law, excluding caption,
tables and signature block, is 1826.
/s/ Jason L. Ederer, Esq.
Dated: New York, New York
May 5, 2023
7
10 of 10
Preview
FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023 NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU ------------------------------------------------------------------------x BARRY YAMPOL, Plaintiff, Index No. 601285/2023 -against- Judge Danielle M. Peterson CERTAIN UNDERWRITERS AT LLOYD’S, LONDON, Motion Seq. 002 including those subscribing to Syndicate Nos. MIT 3210, PEM 4000, TAL 1183, MKL 3000, CGM 2488, AXS 1686, CSL 1084, ASP 4711, COF 1036, AUW 0609, TRV 5000, ARK 4020, AAL 2012, ADV 0780, AUL 1274, AFB 2623, AFB 0623, AES 1225, ANV 1861, ENH 5151, WRB 1967, BRT 2987, Apollo 9975, CHN 2015, KLN 0510, Defendants. ------------------------------------------------------------------------x MEMORANDUM OF LAW IN OPPOSITION BY CERTAIN UNDERWRITERS AT LLOYD’S, LONDON CLYDE & CO US LLP The Chrysler Building 405 Lexington Avenue, 16th Floor New York, New York 10174 Tel: (212) 710-3900 Attorneys for Defendants Certain Underwriters at Lloyd’s, London 1 of 10 FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023 NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023 TABLE OF CONTENTS Page(s) PRELIMINARY STATEMENT .................................................................................................... 1 ARGUMENT .................................................................................................................................. 1 POINT I SECTION 1213(e) RELIEVES UNDEWRITERS OF ANY OBLIGATION TO POST PRE-ANSWER SECURITY ........................................................................................ 1 POINT II POSTING PRE-ANSWER SECURITY IS ALSO UNNECESSARY BECAUSE UNDERWRITERS MAINTAIN SUFFICIENT FUNDS IN NEW YORK STATE.............. 3 CONCLUSION ............................................................................................................................... 6 i 2 of 10 FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023 NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023 TABLE OF AUTHORITIES Page(s) Cases Atlas Feather Corp. v. Pine Top Ins. Co., 122 A.D.2d 241 (2d Dep’t 1986) ................................ 3 Willis Pawnbrokers, Inc. v. Ambassador Insurance Co., 100 A.D.2d 771 (1st Dep't 1984) .............................................................................................................................. 3 Statutes New York Insurance Law § 1213 ....................................................................................... 1, 2, 3, 5 New York Insurance Law § 2105 ................................................................................................... 2 New York Insurance Law § 59a ..................................................................................................... 3 ii 3 of 10 FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023 NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023 PRELIMINARY STATEMENT While a separate motion to dismiss the Complaint is pending, Plaintiff has moved to force Underwriters to post bond for more than $48 million1 only three months after filing suit. Plaintiff’s application is legally unsound and should fail. The very statute cited by Plaintiff – Insurance Law § 1213 – exempts insurance policies like the one here (the “Policy”) from pre-pleading security requirements because the Policy: (i) was procured by a New York-licensed broker; and (ii) designates the Superintendent of Insurance (now the Superintendent of the Department of Financial Services) as Underwriters’ agent for service of process. Additionally, the Court can and should reject Plaintiff’s motion on the ground that Underwriters maintain more than sufficient assets within New York to satisfy a final judgment in Plaintiff’s favor.2 For these reasons, and as set forth in more detail below, Plaintiff’s motion should be denied. ARGUMENT POINT I SECTION 1213(e) RELIEVES UNDEWRITERS OF ANY OBLIGATION TO POST PRE-ANSWER SECURITY New York Insurance Law Section 1213 does generally apply to “unauthorized foreign or alien” insurers that issue or “deliver contracts of insurance to residents of this state or corporations authorized to do business therein,” and Section 1213(c)(1) can, under certain circumstances, require those insurers to post pre-answer security. However, Plaintiff conveniently ignores the exception provided in this statute, Section 1213(e), which states: 1 The limits of Plaintiff’s Policy are $42 million. Plaintiff cites to no case law in support of his point that he is entitled to pre-judgment interest in connection with the amount of any potential posting of a pre-answer security. 2 The facts of this case are laid out in detail in Underwriters’ motion to dismiss Plaintiff and are incorporated herein by reference. (See NYSCEF 13-27.) 1 4 of 10 FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023 NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023 (e) This section shall not apply to any proceeding against any unauthorized foreign or alien insurer arising out of any contract of insurance effectuated in accordance with subsection (b) or (c) of section two thousand one hundred seventeen of this chapter or in accordance with section two thousand one hundred five of this chapter where such contract designates the superintendent or his successors in office the true and lawful attorney upon whom may be served all lawful process in any proceeding instituted by or on behalf of an insured or beneficiary arising out of such contract. Section 2105, which is referenced in Section 1213(e), pertains to policies obtained by New York excess and surplus lines brokers, as this one was. Here, the Policy documentation makes clear that it was classified as “Surplus Lines” and the Surplus Lines broker was the insured’s producing broker, Frenkel & Co Inc, located in New York, New York. See Ederer Aff., Ex. A at page 20 of PDF (marked as page 2 of 3). Thus, within the meaning of Section 2105, the first prong of 1213(e) exception is satisfied. The requirement that the insurance policy in question designates “the superintendent or his successors in office the true and lawful attorney upon whom may be served all lawful process in any proceeding instituted by or on behalf of an insured or beneficiary arising out of such contract” has also been met. This is because the Policy’s Service of Suit Clause (see Ederer Aff., Ex. A at page 12 of PDF (marked as page 12 of 18)) clearly sets forth the required statutory language by stating: Further, pursuant to any statute of any state, territory or district of the United States which makes provision therefor, Underwriters hereon hereby designate the Superintendent, Commissioner or Director of Insurance or other officer specified for that purpose in the statute, or his successor or successors in office, as their true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Insured ( or Reinsured) or any beneficiary hereunder arising out of this contract of insurance ( or reinsurance), and hereby designate the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof. Plaintiff and his counsel are well-aware of this provision, as they served Underwriters by delivering twenty-one (21) separate summonses to the Superintendent of the New York State 2 5 of 10 FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023 NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023 Department of Financial Services on three separate occasions (January 26, 2023, February 8, 2023 and February 9, 2023, respectively).3 See Ederer Aff., Ex. B. Together with the Policy language itself, Plaintiff's compliance with that language establishes that the second prong of the 1213(e) exception is also met.4 In sum, the exception set forth in Section1213(e) has been satisfied, as the Policy was issued through a New York excess/surplus lines broker and specifically designated the Superintendent as Underwriters’ attorney for receipt of service of process. For these reasons alone, Plaintiff’s motion must be denied. Willis Pawnbrokers, Inc. v. Ambassador Insurance Co., 100 A.D.2d 771, 474 N.Y.S.2d 44 (1st Dep’t 1984). See also, e.g., Atlas Feather Corp. v. Pine Top Ins. Co., 122 A.D.2d 241, 242, 505 N.Y.S.2d 436, 437 (2d Dep’t 1986) (affirming lower court decision that application of Section 59–a(5) (which is now Section 1213(e)) in that case rendered Section 59-a(3)(a) (which is now 1213(c)(1)) inapplicable).5 POINT II POSTING PRE-ANSWER SECURITY IS ALSO UNNECESSARY BECAUSE UNDERWRITERS MAINTAIN SUFFICIENT FUNDS IN NEW YORK STATE Alternatively, Section 1213(c)(1)(A) states, in relevant part, that “the court may in its discretion make an order dispensing with such deposit or bond if the superintendent certifies to it 3 As the Court is aware, the New York State Insurance Department was abolished in 2011 and the functions and authority of same were transferred to the New York State Department of Financial Services. 4 The decision by the Appellate Division, First Department in Willis Pawnbrokers, Inc. v. Ambassador Insurance Co., 100 A.D.2d 771, 474 N.Y.S.2d 44 (1st Dep’t 1984) is instructive here. Like Plaintiff, the insured in Willis was unable to obtain insurance from an authorized insurance company, i.e. an insurer licensed to do business in the State of New York. As such, the insured obtained coverage through a licensed excess/surplus lines broker from defendant Ambassador Insurance Co. (“AIC”). The AIC policy designated the superintendent as AIC’s attorney for service of process. Based on these facts, the court held that AIC was not obligated to post security before answering the insured's complaint. Willis, 474 N.Y.S.2d at 45. Section 59–a, which both Willis and Atlas were decided under, was recodified as §1213 on September 1, 1984 with minor changes. Both statutes have identical purpose subsections. 5 Not one of the cases cited by Plaintiff even mentions Section 1213(e). 3 6 of 10 FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023 NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023 that such insurer maintains within this state funds or securities in trust or otherwise sufficient and available to satisfy any final judgment which may be entered in the proceeding.” Without asking for confirmation before filing his motion, Plaintiff alleges that, “[t]o Plaintiff’s knowledge, Defendants have received no such certification” from the Superintendent. However, a straightforward inquiry would have confirmed that Underwriters maintain sufficient funds, such that Plaintiff’s motion was both unnecessary and without merit. As articulated by the New York State Office of General Counsel (“OGC”) opinion letter dated December 17, 2004 (OGC Opinion No. 04-12-17), there is no such certification function by the Superintendent and, hence, there is no process to apply to be certified. See Ederer Aff., Ex. C. Instead, parties seeking such certification are advised to “consult the list of eligible insurers maintained by the Excess Line Association of New York (‘ELANY’), on its website at www.elany.org.” Id. A simple search of the ELANY list reveals not only a list of eligible, New York excess line insurers, but also a searchable sub-section for “Lloyd’s Syndicates”. Of the 25 Lloyd’s Syndicates named as defendants by Plaintiff in this action, twenty-three (23)6 can be found on the current ELANY list. See Ederer Aff., Ex. D. Pursuant to the ELANY Compliance Advisor (which was revised and reissued in September 2022), foreign insurers must maintain (as of January 1, 2022) a minimum of $48 million of policyholders’ surplus to be eligible for the ELANY list. See Ederer Aff., Ex. E. In addition, Underwriters note that these same twenty-three (23) Underwriters also appear on the NAIC International Insurer Department’s most recent “Quarterly List of Alien Insurers”. 6 This includes both members of the Apollo 9957 consortium, which includes Apollo 1969 and Apollo 1955. See Affirmation of Sabrina N. Miesowitz, Esq. at ¶10, n.1. 4 7 of 10 FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023 NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023 See Ederer Aff., Ex. F (“IID List”). For Lloyd’s syndicates like Underwriters to be included in the IID List, a core requirement is a United States trust fund of not less than $100 million available for the benefit of all Lloyd’s U.S. Surplus lines policyholders. See Ederer Aff., Ex. G (2023 NAIC International Insurers Department Plan of Operation). As of February 2023, the Lloyd’s American Surplus or Excess Lines Insurance Joint Asset Trust Fund (“JATF”) contained funds valued $108,361,699, more than two times the amount of a potential final judgment in this case. This amount was certified through the end of 2023 by Lloyd’s trustee in New York, Citibank, N.A., which maintains Lloyd’s JATF account. See Miesowitz Aff., ¶¶ 9-11; Ex. A. Most importantly, the JATF funds apply not only to the twenty-three syndicates on the current ELANY and NAIC lists but also legacy syndicates which are now in “run-off” like the remaining two defendants, MIT 3210 and ADV 780.7 See Miesowitz Aff., ¶ 10; n.2. These syndicates, which were on the NAIC List at the time of the issuance of the Policy (see Ederer Aff., Ex. H), therefore remain in compliance with their obligations according to New York’s OGC.8 Based on the foregoing, Underwriters respectfully submit that they all maintain sufficient funds in the New York State such that even if the Court believed the exception to Section 1213 did not apply, the Court should exercise its discretion under Section 1213 and dispense with the pre-answer security requirement articulated therein.9 7 MIT 3210 and ADV 780 were also previously listed on ELANY and only recently came off. See Ederer Aff., Ex. I. 8 Underwriters note that OGC Opinion No. 06-08-12 (Ederer Aff., Ex. J) states that N.Y. Ins. Law § 1213(e) applies to excess line insurers which were formerly listed on ELANY, like MIT 3210 and ADV 780, when the Policy in question designates the Superintendent as their attorney upon whom lawful process may be served (which the Policy does in this case), and provided these insurers have sufficient funds in its excess line trust fund that is available to satisfy any final judgment which, as a result of the Joint Asset Trust Fund, they do. 9 The Court may be interested to know that a perfunctory review of NYSCEF, the New York State Uniform Court System’s e-filing system, revealed 29 cases in Nassau County since 2013 wherein Certain Underwriters at Lloyd’s and/or Lloyd’s syndicates were parties. In not one of those cases did a Nassau County Court order the Lloyd’s underwriters to file a pre-answer bond. 5 8 of 10 FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023 NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023 CONCLUSION Based on the foregoing, Underwriters respectfully submit that Plaintiff’s motion should be denied in its entirety. Dated: New York, New York May 5, 2023 CLYDE & CO US LLP By: /s/ Jason L. Ederer Owen B. Carragher Jason L. Ederer David C. Sienko 405 Lexington Avenue, 16th Floor New York, New York 10174 (212) 710-3900 owen.carragher@clydeco.us jason.ederer@clydeco.us david.sienko@clydeco.us Attorneys for Defendants Certain Underwriters at Lloyd’s, London 6 9 of 10 FILED: NASSAU COUNTY CLERK 05/05/2023 10:23 PM INDEX NO. 601285/2023 NYSCEF DOC. NO. 68 RECEIVED NYSCEF: 05/05/2023 ATTORNEY CERTIFICATION PURSUANT TO NYCRR 202.8b I, Jason L. Ederer, an attorney admitted to practice before the Courts of the State of New York, hereby certify that the word count of the attached Memorandum of Law, excluding caption, tables and signature block, is 1826. /s/ Jason L. Ederer, Esq. Dated: New York, New York May 5, 2023 7 10 of 10