Life Insurer Faces Legal Pushback From Its Own Insurers

The providers' response: XL sold PHL an insurance company professional liability policy that provided PHL with $5 million in errors and omissions coverage and directors and officers coverage for the period from June 13, 2020, to June 13, 2021, according to the Connecticut complaint.

Six other companies sold PHL excess policies related to the coverage, or policies designed to pay off if claims exceeded the benefits limits for the XL coverage.

The companies assert in the memorandum filed in California that "California's contacts to this dispute are almost non-existent."

"PHL filing this action in this court is blatant forum shopping," XL and the other liability insurance providers say.

In the Connecticut complaint, the insurers assert that the underlying actions involved occurred outside PHL's policy period; that the defense costs involved would not qualify as a loss under the policies or would be uninsurable as a matter of law; and that the types of matters involved are not the types of events that XL policy and the excess policies cover.

XL and the other insurers cite errors and omissions policy language that the policy does not cover losses resulting from wrongful acts occurring before the coverage started.

The insurers maintain that the litigation resulting from the 2021 cost-of-insurance charge increase are related to the suits related to the 2017 increase.

Because the 2021 litigation is related to the 2017 suits, a provision that excludes coverage for prior or pending litigation bars coverage related to the 2021 litigation, XL and the other insurers say.

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