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Chubb, Other Insurers Must Face Suit over SEC, Bear Stearns Settlement Claims

A subsidiary of Chubb Corp. and other insurers must defend themselves against a lawsuit for refusing to cover more than $200 million paid out by Bear Stearns over illegal mutual fund trading practices, New York's highest court ruled on Tuesday.

By Karen Freifeld, Reuters | Updated on June 12, 2013

NEW YORK (Reuters) – A subsidiary of Chubb Corp. and other insurers must defend themselves against a lawsuit for refusing to cover more than $200 million paid out by Bear Stearns over illegal mutual fund trading practices, New York’s highest court ruled on Tuesday.

Reversing an intermediate court, the Court of Appeals revived claims seeking coverage for a 2006 settlement between Bear Stearns and the U.S. Securities and Exchange Commission over market timing and late trading. The settlement included $160 million in ill-gotten gains and a $90 million penalty, according to court papers.

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