Aon calls Clear Blue’s amended Vesttoo fraud lawsuit “an attempt to distract” – Artemis.bm
Aon has again called for fronting specialist Clear Blue Insurance’s lawsuit against it, related to the reinsurance letter of credit (LOC) fraud perpetrated by Vesttoo, to be dismissed, calling it an attempt to distract from the depth of Clear Blue’s involvement with the insurtech and its own financial distress.
As we reported earlier this month, Clear Blue amended its legal complaint against Aon in the New York court lawsuit, strengthening the language used and accusing the insurance and reinsurance broking giant of soliciting the fronting specialist’s involvement in a scheme that it structured and masterminded.
As you’d expect, Aon has fired back and called for the amended complaint to be dismissed, reiterating previous assertions from its earlier call for dismissal of the first complaint, that Clear Blue has not met its burden of showing that the Court has jurisdiction over either either Aon plc or Aon Insurance Managers (Bermuda) Inc., and that the fronting company has failed to state a claim for any asserted cause of action.
A Clear Blue spokesperson has given a view as to how the fronting specialist sees the assertion that the New York court lacks jurisdictional oversight.
“Clear Blue believes it’s completely obvious that Aon has significant presence and operations in Manhattan / New York sufficient to support their jurisdiction in the New York courts, as evidenced by Aon’s 240,000 square foot office and executive officers located at One Liberty Plaza in the financial district. Any statement otherwise by Aon is patently false and misrepresentation to the court,” the Clear Blue spokesperson told Artemis.
But Aon seeks to put the onus back onto the fronting specialist in its latest filing, stating that, “Clear Blue’s lawsuit against Aon plc and AIMB is an attempt to distract this Court and the market from the depth of its involvement with Vesttoo and its own financial distress.”
Here, the broker is referring to the fact that Clear Blue had a public relationship with Vesttoo, announced in 2022, through which it was hoping to partner on $1bn of capacity deals.
In addition, the broker has included a third reason for rebuttal of the lawsuit, in its latest response to the amended complaint, saying that Clear Blue’s claims are not ripe.
Here, Aon notes that it’s not clear what financial losses or impact Clear Blue has actually suffered, or when any losses may occur, because of the lack of collateral to back up reinsurance deals it had fronted on behalf of Aon’s clients.
Recall that, Vesttoo had been forging letters of credit (LOC) to support reinsurance arrangements, so as a fronting carrier involed in a number of deals Clear Blue found itself with no reinsurance to back up the contracts it had entered into.
Aon’s filing states, “Even if the Court finds Clear Blue could state a case, that case would fail because Clear Blue’s request for a declaratory judgment is not ripe. The Amended Complaint does not allege Clear Blue is currently obligated to settle any claims, and it is unclear when (or if) any claims will come due.”
Adding that, “New York courts have held a request for declaratory judgment is not ripe when the claim is based on a future event that is beyond the control of the parties and may never occur.”
Continuing by stating that, “Here, Clear Blue has not alleged that it owes any insured, only that “to the extent that the insured … makes a claim to Clear Blue under the reinsurance that it provided and is successful on such claim, then Aon should be required to indemnify Clear Blue.
“Clear Blue does not allege that any claims have been made or paid. As a result, its request for declaratory judgment must be dismissed.”
It’s anticipated that a further response from Clear Blue will be filed, in answer to Aon’s latest response to its updated complaint.
Quite where this case goes remains to be seen and it is now just one avenue of litigation that continues in the wake of the Vesttoo reinsurance collateral fraud and bankruptcy.
As we reported earlier today, Porch Group has now filed a law suit in New York against China Construction Bank Corporation, accusing it of “enabling its personnel to perpetrate a colossal fraud” on the plaintiffs.
The fallout from Vesttoo’s fraudulent activities looks set to reverberate for some time to come.
