Insurance Journal [San Diego CA]
May 24, 2022
The Diocese of Rochester, New York, and its insurers have submitted a proposal to bankruptcy court to settle 471 sexual abuse claims against them for $147 million. The settlement includes $107,750,000 from insurers and $40,500,000 from the Catholic diocese and its entities.
The offer came after years of negotiations between insurers and the diocese.
The settling insurers include London Market Insurers ($16.6 million), certain Underwriters at Lloyd’s ($1.1 million), Interstate Fire & Casualty Co. and National Surety Corp. ($26 million), and Continental Insurance Co. (CNA) and its affiliates ($63.5 million). The liability insurance policies affected were purchased starting in 1943.
The offer would allow for an average recovery of more than $300,000 per survivor claim, according to the filing.
Lawyers for the victims of sexual abuse criticized the proposal as a deal made with insurers that shortchanges the victims. Jeff Anderson & Associates, a law firm that represents survivors of clergy abuse, claimed that the diocese likely has more than $4 billion in insurance and that the diocese’s own contribution to the settlement amount is “only a fraction of what they are able to pay survivors.”
The proposal is before Judge Paul Warren of the U.S. Bankruptcy Court for the Western District of New York, where the diocese filed for Chapter 11 protection in 2019 after the New York State Legislature passed the Child Victims Act. The legislation modified the statute of limitations and created what was initially a one-year “window” during which victims of child sex abuse could commence previously time-barred civil actions. According to the diocese, approximately 471 claims were received by the deadline of August 13, 2020. It said it filed for bankruptcy in order to reorganize its finances to deal with the claims it faced.
Before making the decision to settle with insurers, the diocese said it considered litigation but ultimately “determined that the interests of survivors in this case would be best served by achieving certainty with respect to a very substantial insurance contribution rather than risking the cost, extensive delay, and uncertain outcome of litigation in pursuit of the theoretical possibility of a larger recovery at some point in the distant future.”