Former insurance executive ordered to pay over millions to insurer
Former insurance executive ordered to pay over millions to insurer | Insurance Business America
Insurance News
Former insurance executive ordered to pay over millions to insurer
Ruling follows a prolonged dispute
Insurance News
By
Grant Funtila
Following a prolonged dispute over solvency capital ratios, former insurance executive Greg Lindberg has been ordered to pay over $166 million to a Dutch insurer. The ruling was issued by the U.S. District Court for the Middle District of North Carolina.
The case centered on Conservatrix N.V., a Dutch life insurance company, and Trier Holding B.V., of which Lindberg was the ultimate shareholder.
Under European and Dutch regulations, insurers are required to maintain a solvency capital ratio of at least 100. In March 2019, Trier committed to maintaining a solvency capital ratio of 135 at Conservatrix. However, by August of the same year, the ratio dropped below the required threshold, according to the initial complaint.
In December 2019, Conservatrix initiated arbitration to compel Trier to uphold its obligations. A month later, the Netherlands Arbitration Institute ordered Trier to restore the solvency capital shortfall to the agreed ratio within 60 days or pay Conservatrix €150 million ($163.93 million). The mediation tribunal also awarded arbitration and legal fees to the insurer. Trier did not pay.
In April 2020, Trier asked the Dutch appeals court to void the award, but Conservatrix was put into liquidation before those proceedings concluded. The liquidators of the insolvent company continued to pursue the award, which was upheld by an appeals court in March 2022 and reaffirmed by the Supreme Court of the Netherlands in September 2023.
The defense argued that these rulings were not “foreign country judgments” but decisions made by an arbitration tribunal, which are not covered by the North Carolina Uniform Foreign-Country Money Judgments Recognition Act. The act helps courts determine what type of foreign judgments they should recognize.
Chief District Court Judge Catherine C. Eagles rejected this argument, citing orders from Dutch courts enforcing the tribunal’s award, which she stated qualified as a foreign country judgment under the act.
Defense attorneys also contended that the Dutch rulings were not “judgments” but rather a series of court orders and rulings that “failed to explicitly adopt the monetary award granted in the summary arbitral proceedings,” according to court documents.
However, Eagles noted that the defense provided no evidence to support the claim that a foreign court must specifically designate an order as a “judgment” or must “explicitly adopt” a monetary award.
In the most recent order, Eagles confirms that the Federal Arbitration Act provides several reasons why enforcement of a foreign arbitration award could be refused. These include if the decision is nonbinding or if the award has been set aside by a competent foreign authority. However, the defense counsel did not meet the criteria to refuse the award.
Although Dutch courts initially said Lindberg must pay €150 million, Eagles wrote that judicial norm allows for the amount to be converted to dollars. The order stipulated the amount, following conversion, should total $166.60 million.
Attempts to obtain comments from the defense and plaintiff’s counsel were unsuccessful.
This ruling is the latest in a series of legal setbacks for Lindberg, who was found guilty in May of attempting to bribe North Carolina’s insurance commissioner. Lindberg and a co-conspirator were first convicted in 2020, a decision that was overturned two years later. Following his second conviction, Lindberg sought to have the decision overturned once again, a move strongly opposed by government attorneys, according to BestWire).
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