A New York court ordered Millennia Assurance Inc. to deposit $4.75 mn in collateral into a trust account after siding with New York Marine and General Insurance Co. in their legal dispute.
The Appellate Division, First Judicial Department issued its decision on May 29, reversing a 2023 ruling by the Supreme Court that had denied New York Marine’s request for a preliminary injunction.
The court found that New York Marine showed a strong likelihood of success in the case and risked serious harm without the injunction.
According to court filings, New York Marine received a Schedule F penalty from the state regulator in 2022 for lacking adequate collateral.
The insurer stated the penalty reduced its policyholder surplus and affected its ability to issue or reinsure federal bonds.
An affidavit from a Coaction Management vice president supported the company’s claim for the required $4.75 mn in collateral.
The ruling noted that while Millennia Assurance argued New York Marine maintained a strong surplus and was not at risk of default, the affidavit showed that reductions to surplus caused by insufficient collateral can have widespread financial consequences.
Separately, in a case earlier this year, Symetra Life Insurance Co. agreed to a proposed $32.5 mn settlement in a class-action lawsuit filed in the Western District of Washington in 2021.
Plaintiffs accused the insurer of withdrawing excessive amounts from the cash value trusts of policyholders and making deductions beyond those permitted in policy terms.
The complaint alleged these practices limited the plaintiffs’ ability to invest through their policies, fund future premiums, increase death benefits, access cash, or use the policies as collateral for loans. The proposed settlement remains subject to court approval.
