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FILED: NEW YORK COUNTY CLERK 05/24/2021 09:51 AM INDEX NO. 451540/2021
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 05/24/2021
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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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.
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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.
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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,
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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
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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”).
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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
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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
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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
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The New York security funds will assert claims in Bedivere’s domestic liquidation proceeding for reimbursement
of amounts paid to eligible New York claimants.
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rights and obligations granted to and imposed upon her pursuant to Article 74 of the Insurance
Law.
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Please note that this was notarized in accordance to Governor Cuomo's EO 202.7.
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