CASTRIES, Saint Lucia -- Saint Lucia insurer Bancroft Life & Casualty ICC Ltd recently won a favourable judgment on all issues in a complex lawsuit in federal court in Virginia.
The lawsuit, Bancroft Life & Casualty ICC, Ltd. v. TMC Financial, et al., was filed by Bancroft in the United States District Court for the Eastern District of Virginia in 2011 to collect on two defaulted promissory notes with a total principal amount of $480,000.
The two former certificate holders in Bancroft’s group insurance program against whom the lawsuit was filed asserted sixteen counterclaims against Bancroft and various other parties, including claims for breach of contract, fraud in the inducement, statutory conspiracy, and violations of Virginia’s insurance statutes.
As one of the affirmative defences, the former certificate holders claimed that the loans they took from Bancroft’s reserves were never meant to be repaid and were, in fact, an early return of premium.
Following an extensive discovery period that included examination of Bancroft’s structure, underwriting, claims history, and commercial loan program, a five-day bench trial on the merits was held before Judge T.S. Ellis in July and August 2013.
Following the bench trial, the court ruled that the former certificate holders had failed to prove any of their claims, including the claims for breach of contract, fraud, and statutory conspiracy. The court also granted Bancroft all of the relief that it sought, including a declaratory judgment that the former certificate holders were liable on the promissory notes and that Bancroft could proceed to take possession of their assets to satisfy the indebtedness, including default interest and attorneys’ fees.
In its 58-page findings of fact and conclusions of law, the federal court ruled that, on issue after issue, the testimony of Bancroft’s witnesses was credible and persuasive. The court also noted that the testimony of individuals associated with Intercontinental Captive Management Company Ltd, with which Bancroft had previously been engaged in litigation in Pennsylvania, was not credible and was “infected with bias.”
The court also concluded that there was “no evidence that Bancroft was not legally compliant with the laws to which it was subject or that it was not a legitimate insurance company” and that the “claims for fraud based on statements that Bancroft was a legitimate insurance company that was legally compliant inside and outside the United States fail.”
Further, in a holding with potential implications for foreign insurers, the court also held that Bancroft, which provided coverage to the Virginia certificate holders pursuant to a group insurance policy held by a foreign entity, was not required to have a Virginia insurance licence.
“Judge Ellis’s findings provide judicial confirmation that the sorts of toxic allegations that have been made against Bancroft’s operations and structure in related actions are factually baseless,” stated Bancroft’s lead attorney, Kip Schwartz, of Schwartz & Associates PLLC. “Bancroft received all of the relief it sought from the court and plans to continue its campaign of collection actions for the benefit of the certificate holders in its Premium Lite group pool.”
Bancroft is a licensed insurance company based in Saint Lucia specializing in customized business interruption and risk insurance.