Weil Gotshal has in-depth knowledge of the complex issues faced in the insurance industry.
Our lawyers bring a powerful blend of litigation and transactional experience to complicated matters, and have successfully defended clients against private, government and class action suits, and before state insurance agencies. We have also represented numerous plaintiffs in major cases of first impression. We have a proven track record of success and have successfully represented insurance and reinsurance companies in some of the largest insurance disputes ever.
Highlights of our insurance litigation practice include:
- Significant and repeated representation of several of the world’s largest insurance companies, including United HealthCare, Genworth Financial, The Hartford, Travelers, and Prudential, in bet the company litigations on a wide variety of issues.
- Defended dozens of nationwide and statewide class actions involving failed “vanishing premiums,” modal premium rates, long-term care insurance rate increases, deceptive and unfair trade practices and ERISA violations.
- Lead counsel for United HealthCare in one of the largest insurance disputes ever – a multidistrict litigation with billions of dollars at stake.
- Extensive experience handling "UCR" class actions, claims by insured that they were under-reimbursed because of "usual, customary and reasonable" limitations in policies.
- Ongoing representation of insurance companies in proceedings before the House Committee on Commerce, the Senate Finance Committee and instituted by various state attorneys general.
- Negotiated some of the most creative and favorable settlements of complex nationwide matters.
Highlights of our reinsurance litigation and arbitration practice include:
- Defended and prosecuted several major reinsurance arbitrations, including achieving total victory in a $75 million reinsurance arbitration for Life Re (now part of Swiss Re), resulting in rescission of a multi-year reinsurance treaty with bad claims experience.
- Successfully represented Penn Treaty in a reinsurance arbitration regarding multiple reinsurance treaties.
- Representation of Employers Reinsurance Company, formerly an affiliate of GE, in reinsurance matters.
- Represented Swiss Re in a major reinsurance arbitration involving complicated reserving issues.
- Successfully represented Conseco Life in major reinsurance litigation where the plaintiff claimed over $50 million in damages.
- Recognized for particular expertise in Special Committee and SEC investigations and have handled several internal investigations of major companies involving complex reinsurance arrangements.
Our lawyers also have extensive experience in effecting insurance company public and private mergers, cash and partial cash deals, leveraged transactions, restructurings, asset-based transactions, spin-off transactions, and auction situations.
- Lead counsel in the acquisition of over 100 insurance companies.
- Directly involved in obtaining state regulatory approvals for these transactions.
- Extensive experience with complex and politically sensitive transactions.
- Hundreds of public hearings in front of state insurance regulatory authorities.
- Effectively collaborate with local counsel where appropriate or strategically advantageous.
Our Insurance practice provides comprehensive services to ensure the success of our clients’ insurance transactions:
- Creation of contractual provisions tailored to unique issues in the insurance industry.
- In-depth industry-specific due diligence review and analysis of insurance regulatory structuring issues to provide optimal solutions.
- Preparation and filing of insurance regulatory filings (e.g., change of control, affiliate transactions, anti-competition, extraordinary dividends).
Insurance/Reinsurance Litigation and Arbitration Case Highlights
United HealthCare
In Re Managed Care Multidistrict Litigation
Weil Gotshal successfully obtained a major victory in a multi-billion dollar matter for long-time client United HealthCare in its defense against allegations of industry-wide fraud and conspiracy among managed care companies to underpay physicians. The United States District Court in Miami granted United HealthCare’s summary judgment motion, finding that the plaintiffs could not demonstrate any wrongdoing on the part of United HealthCare, and dismissed all claims against the company.
Partners: James Quinn, Jeffrey Klein, Edward Soto, Debra Pearlstein, Penny Reid, Greg Coleman, Robert Berezin, Christopher Pace, Nicholas Pappas, Michael Lyle, and Lori Pines
Citigroup and Met Life
Citigroup/Metlife Structural Settlement Class Action Litigation
Weil Gotshal obtained a significant victory for our clients Citigroup and MetLife in a purported nationwide class action alleging that our clients had engaged in illegal rebating in connection with the use of structured settlements to settle insurance claims. After the Connecticut state court certified a nationwide class in May 2004, we appealed. After fully briefing, the Connecticut Supreme Court took the appeal (as opposed to it being heard by the Connecticut Appellate Court), and we argued the appeal before a five judge panel. In a unanimous decision issued in April 2006, the Supreme Court reversed the trial court’s ruling in its entirety and decertified the nationwide class because, in part, individual issues of fact and law predominated.
Partners: John Neuwirth and John Margolis
Citigroup, State Street, Citistreet LLC, Travelers Insurance
Lopresti v. Citigroup, Inc.
With $100 million in damages on the line, Weil Gotshal litigators secured a victory in the United States Court of Appeals for the Second Circuit on behalf of a number of clients, including Citigroup, State Street, Citistreet LLC and Travelers. The dispute, initially heard in the United States District Court for the Eastern District of New York, stemmed from Lutheran Medical Center's (LMC) decision to implement a new retirement program for its employees. Plaintiff alleged that prior to Lutheran's arrangement with the Citigroup Entities, plaintiff sold and marketed certain annuities to LMC employees, and that he had been wrongfully precluded from continuing his business at Lutheran into the future. Plaintiff brought more than a dozen claims, including alleged ERISA, RICO and antitrust violations. The district court granted Weil Gotshal's motion to dismiss, which was affirmed by the Second Circuit.
Partners: David Lender
Genworth Financial and The Travelers Insurance Company
Felzenberg v. Travelers Life Ins.
Weil Gotshal obtained summary judgment in a purported class action for breach of contract and declaratory relief in which plaintiff was seeking tens of millions of dollars in future insurance premiums. Plaintiff alleged that The Travelers Insurance Company ("TIC") did not apply premium rate increases to its long-term care policyholders on a "class" basis as required by the applicable insurance policies. After removing the action from the Superior Court of New Jersey to the District of New Jersey based on diversity jurisdiction pursuant to the Class Action Fairness Act of 2005, we filed a motion to dismiss. After reviewing the briefs, the Court, sua sponte, issued an order to show cause as to why the case should not be dismissed for lack of jurisdiction. We briefed the jurisdictional issues under CAFA, arguing that the Court had jurisdiction over the case pursuant to CAFA because the aggregate amount in controversy exceeded $5 million based on the value of the declaratory relief sought in the Complaint. Subsequently, the Court indicated that it was going to convert our motion to dismiss to a motion for summary judgment, and allowed both sides to submit evidence on the motion. On January 6, 2006, the Court granted the motion for summary judgment, dismissing the action in its entirety.
Weil Gotshal also defended Genworth Financial in two nationwide insurance "modal premium" class actions in New Mexico state court asserting claims for breach of contract, failure to disclose and violations of state unfair and deceptive trade practices statutes.
Partners: Mindy Spector and John Mastando
Empire HealthChoice, Inc.
Consumer Union v. Empire Blue Cross
Weil Gotshal secured a major victory for Empire HealthChoice, Inc. (now called WellChoice) and its Board of Directors in New York State's Court of Appeals in a litigation challenging Empire's November 2002 conversion from a not-for-profit health insurer to a publicly traded, for-profit corporation. The conversion was challenged by Consumer Union, other public interest groups and individual subscribers on a variety of grounds, including alleged violations of the "Takings," "Contracts" and "Due Process" clauses of the federal and state constitutions, violation of the state constitutional prohibition on "special" or "private" legislation, and violations by Empire's board of its fiduciary duties.
At stake was the existence of Empire as a for-profit corporation, as well as the viability of its initial public offering. Also at stake was $3 billion to $4 billion in proceeds from Empire's conversion and IPO that had been earmarked by the statute authorizing the conversion for various public health initiatives in New York State. In a 4-2 decision, which totaled more than 80 pages, the Court of Appeals dismissed all of the challenges to the conversion and its attendant IPO as legally insufficient. The decision was a complete vindication of Empire's conversion. Empire's stock rose significantly on the announcement of the decision.
Partner: Steven Reiss
Conseco Life Ins. Co.
Breckenridge Enterprises, Inc. v. Conseco Life Insurance Co.
Weil Gotshal successfully defended Conseco Life in an insurance matter involving allegations of fraud, negligent misrepresentation, negligent hiring and supervision, bad faith and violations of the Texas Deceptive Trade Practices Acts. Plaintiffs claimed over $50 million in purported damages. Following almost two years of heated discovery, we achieved a favorable settlement for Conseco after the filing of dispositive motions.
Partner: David Yohai
Penn Treaty American Corp.
Forrest v. Penn Treaty American Corp.
After two years of litigation, we successfully settled a nationwide long term care insurance class action involving over 200,000 policy holders. Plaintiffs asserted claims of fraud, negligent misrepresentation, breach of fiduciary duty, restitution and reformation and sought hundreds of millions of dollars in damages. Case was settled with creative policy options for policy holders with no cash paid to plaintiffs.
Partners: Mindy Spector and David Yohai
Insurance/Reinsurance Transactional Experience Highlights
Insurance/Reinsurance Mergers & Acquisitions
UnitedHealth Group
- $9.2 billion acquisition of PacifiCare Health Systems, Inc.
- $2.95 billion acquisition of Mid Atlantic Medical Services.
General Electric
- $6.8 billion sale of the property casualty business of GE Insurance Solutions to Swiss Re.
- $2.15 billion sale of GE Edison Life Insurance Company (now AIG Edison Life Insurance Co.) to American International Group..
- $2.1 billion sale of Financial Guaranty Insurance Co. to an investor consortium lead by The PMI Group, Inc.
- $1.8 billion acquisition of First Colony Life and numerous other life insurance acquisitions.
- $1.4 billion acquisition of Life of Virginia, Union Fidelity Life and subsidiaries.
- $884 million acquisition of The Signature Life Insurance Company of America; Montgomery Ward Life Insurance Company; Montgomery Ward Insurance Company and Forum Insurance Company.
- $525 million acquisition of Great Northern Annuity Insured Corporation and subsidiaries
- $400 million acquisition of Harcourt General Insurance and subsidiaries.
Genesis
- $1.5 billion acquisition of The Multicare Corporation.
American General Financial Group
- $1.2 billion acquisition of American Franklin Company.
Life Partners Group
- $850 million sale to Conseco.
Old Mutual
- $635 million acquisition of Fidelity and Guaranty Life Insurance Company from St. Paul Companies.
Employers Re
- $625 million acquisition by GE Capital of the Medical Protective Company.
- Regulatory counsel in the $530 million acquisition of Kemper Reinsurance Company.
PennCorp Financial Group, Inc.
- $400 million acquisition of Washington National Corporation and subsidiaries.
Conseco
- $400 million purchase of Transport Life Companies.
Insurance/Reinsurance Private Equity
Hellman & Friedman LLC/GIC/Farallon
- $1.1 billion pending acquisition of Universal Underwriters Group from Zurich Financial Services Group.
Leucadia
- $1 billion sale of Colonial Penn Insurance Group to GE Capital.
- $460 million sale of Colonial Penn Insurance Companies to Conseco.
HM Capital Partners
- $495 million acquisition of Massachusetts General Life Insurance Company, Philadelphia Life Insurance Company, and certain of their affiliates.
- Pending acquisition of Bank of America Capital Investors and Emeral Capital Group of Swett & Crawford from Aon Corporation.
Capital Z
- Represented in their investment in PxRe and Endurance.
- Acquisition of Permanent General Group of Insurance companies.
- Acquisition of SBJ Group Limited.
- $19 million acquisition of Instant Auto Insurance Company.
Merchant Banking Partners
- Represented in their investments in Axis Capital Holdings Limited, Montpelier Re Holdings Ltd., Aspen Insurance Holdings Limited and White Mountain Insurance Group Ltd.
Hellman & Friedman LLC
- Pending acquisition with Friedman, Fleisher & Lowe of Pacific Select Property Insurance Company, GeoVera Insurance Company, USF&G Specialty Insurance Company from St. Paul Travelers Companies, Inc., United State Fidelity and Guaranty Company.
Representative Mutual/Not-for-Profit Transactions
Empire Blue Cross & Blue Shield
- Conversion of Empire/Blue Cross into WellChoice, including related HMO restructuring and legislative amendment.
Connecticut Mutual Life Insurance Company
- $3.5 billion merger with Massachusetts Mutual Life Insurance Company.
Swiss Re
- Privatization and acquisition of The Texas Workers Compensation Insurance Facility and related legislative amendment.
Capital Z
- $35 million acquisition of British Marine Mutual Association (demutualization)
Northwestern National County Mutual Insurance Company
- Sale to Queensway Financial Holdings.
Middlesex Mutual Assurance
- $50 million reinsurance pooling transaction with Country Mutual Insurance Company.
Representative Transactional Reinsurance Matters
The Pyramid Life Insurance Company
- Represented as ceding company in indemnity reinsurance flipping to novation (life) to reinsuring company Continental General Insurance Company.
Union Fidelity Life Insurance Company
- Represented as reinsuring company in indemnity reinsurance (accident & health) and retrocession to ceding company American Combined Life Insurance Company, in indemnity reinsurance & retrocession (group life and accident & health) and retrocession to ceding company Combined Insurance Company of America and in indemnity reinsurance (life & accident & health) to ceding company Virginia Surety Company.
- Represented as ceding company in indemnity reinsurance (credit life & credit accident & health) to reinsuring company Combined Insurance Company of America and in indemnity reinsurance (credit life & credit accident & health) to reinsuring company American Combined Life Insurance Company.
Employers Reassurance Corporation
- Represented as reinsuring company in indemnity reinsurance (group life) to ceding company Phoenix Home Mutual Life Insurance Company.
Wards® Montgomery Ward Insurance Company
- Represented as reinsuring company in indemnity reinsurance flipping to novation (commercial liability, credit mortgage, A&H and club coverage) and excess of loss reinsurance (auto and homeowners) to ceding company GE Auto and Homeowners Insurance Companies sold to AIG.
- Represented as ceding company in indemnity reinsurance (auto) to reinsuring company GE Property & Casualty Insurance Company.
Intramerica Life Insurance Company
- Represented as ceding company in indemnity reinsurance (variable annuities) to reinsuring company Allstate Life Insurance Company of New York.
The Life Insurance Company of Virginia
- Represented as reinsuring company in indemnity reinsurance (life) to ceding company Combined Insurance Company of America.
Life Reassurance Corporation of America
- Represented as reinsuring company in retrocession to ceding company Combined Insurance Company of America and in retrocession and indemnity reinsurance (credit life and disability) to ceding company American Combined Life Insurance Company.
Empire Blue Cross & Blue Shield
- Represented as ceding company in indemnity reinsurance flipping to assumption (life and accident & health) to reinsuring company Empire HealthChoice Assurance, Inc.
AMEX Life Assurance Company
- Represented as ceding company in indemnity reinsurance flipping to assumption (life and accident & health) to reinsuring company IDS Life Assurance Company.
European International Reinsurance Corporation
- Represented as reinsuring company in excess of loss reinsurance (workers' compensation) to ceding company Facility Insurance Corporation (successor-in-interest to Texas Workers Compensation Insurance Facility).
Representative Bermuda Reinsurance Investment Transactions
Capital Z
- Represented as investing company in PxRe, a Bermuda property reinsurer, and Endurance Specialty, a Bermuda start-up company.
Merchant Banking Partners
- Represented as investing company in several Bermuda reinsurers, including Axis Capital Holdings Limited, Montpelier Re Holdings Ltd. and Aspen Insurance Holdings Limited.
Thomas H. Lee Partners, L.P.
- Represented as investing company in three major Bermuda reinsurance companies – Axis Capital Holdings Limited, Endurance Specialty and Allied Specialty.
Imagine Reinsurance
- Represented in connection with an abandoned investment in another Bermuda reinsurer.
Attorneys
Litigation
Mindy J. Spector (Co-head of Insurance Practice)
David L. Yohai (Co-head of Insurance Practice)
Jeffrey S. Klein
Edward Soto
David J. Lender
Penny P. Reid
Yvette Ostolaza
John P. Mastando III
Nicholas J. Pappas
Bruce S. Meyer
David R. Fertig
Corporate
Thomas A. Roberts
Joseph T. Verdesca
Michael J. Aiello
William M. Gutowitz
Mary R. Korby
Raymond O. Gietz
Peter King