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ARTICLE · 11 SEPTEMBER 2015

S.D.N.Y. Dismisses Plaintiffs' "Shadow Insurance" Class Action Claims

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Motions to dismiss are currently pending in the Robainas and Ludwick cases and one is similarly expected in Silva.

United StatesInsurance
Max B. Chester
Max B. Chester
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On July 21, 2015, a federal judge granted AXA Equitable Life Insurance Company's motion to dismiss claims brought against it by insureds who alleged that AXA violated New York law by engaging in various "shadow insurance" transactions. The Southern District of New York concluded that the plaintiff insureds failed to demonstrate that they had suffered a concrete injury-in-fact and therefore concluded that they could not satisfy the standing requirements of Article III of the Constitution. Thus, without subject-matter jurisdiction, the court dismissed the case. The decision is a positive bellwether for the life insurance industry, which has faced increasing scrutiny in recent months from regulators and the press regarding the propriety of certain captive reinsurance arrangements.

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