Insurance carriers that declined to take part in the Boy Scouts of America Settlement Trust have been billed a total of $6.99 billion since September 2024, according to a recent update issued by the trustee overseeing the sexual abuse settlement fund.
In a status report dated June 2, trustee Barbara J. Houser said no payments had been received from those insurers as of May 30. She noted that none of the non-participating carriers had confirmed any intention to make payments toward the abuse-related claims.
Most of the responses, Houser noted, included challenges to coverage obligations and stated defenses against the claims.
Among the insurers disputing the trust's demands are affiliates of Allianz Global Risk US Insurance Co., which said in a letter that the payment requests exhibited inconsistencies over time.
The company contended that these requests were made in an arbitrary manner and in violation of due process protections. The Allianz entities also objected to the independent review option available to claimants, arguing that the procedures used lacked necessary safeguards.
Several other carriers, including Liberty Mutual, Old Republic, and certain units of AIG, have participated in legal challenges to the trust’s implementation. These insurers argued that the bankruptcy plan impaired their contractual rights and that aspects of the process were executed in bad faith.
The US Court of Appeals for the Third Circuit rejected these claims in May, upholding the structure of the settlement.
The same court also ruled on objections raised by approximately 140 abuse claimants who opposed non-consensual third-party releases, a provision that would shield settling insurers from future litigation tied to the same allegations. The court found that the timing of those objections – made after the plan had taken effect – rendered them procedurally barred.
The Boy Scouts of America emerged from Chapter 11 bankruptcy proceedings in 2023, after a court rejected a group of insurers' appeal to halt the $2.46 billion settlement fund. The resolution included contributions of $787 million from Hartford Financial Services Group and $800 million from Chubb Ltd., both of which were among the organization’s major liability insurers.
The May ruling by the Third Circuit was a split decision. While the court declined to allow non-settling carriers to insert broader language reserving their rights under existing policies, it did approve a narrower revision.
That change clarified the ability of those insurers to seek recovery of defense costs and pursue excess liability claims directly from the trust rather than from insurers that had already settled.
As of the end of May, the settlement trust had distributed $164 million to 22,605 abuse survivors, according to the June 2 filing. (AC) This follows earlier disbursements totaling more than $138 million to roughly 20,000 claimants under the trust’s initial payout phase, which began shortly after the bankruptcy plan’s confirmation in 2023.
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