Captive Insurer Seeks Dismissal of Vehicle Service Contract Reinsurance Case

TAMPA, Fla. — A Delaware captive insurer is urging an Illinois federal judge to dismiss a lawsuit accusing it of failing to pay a reinsurer more than $20 million in surplus funds that had been held in a “funds withheld account” that had been established in connection with a vehicle service contract reinsurance agreement.

In a Sept. 9 rely brief filed in the U.S. District Court for the Northern District of Illinois, Virginia Surety argues that it may withhold funds to pay sums that are due under the reinsurance agreement to secure PMC Casualty Corp.’s existing and potential obligations.

PMC’s …