The Roman Catholic Diocese of Trenton, New Jersey has voluntarily withdrawn its lawsuit against four liabilit
y insurers over coverage for sexual abuse claims brought against the diocese under the New Jersey Child Victims Act.
The diocese sued in February alleging that the insurers were refusing to agree upon a cost-sharing formula to deal with the hundreds of sexual ab
use lawsuits brought against the diocese. The diocese claimed at that time that despite many months of negotiat
ion with the insurers, there had been “minimal progress” toward finalizin
g an agreement with respect to the defense of the underlying claims and fair compensation to victims.
However, court records show that on August 1 the diocese submitted
a notice of voluntary of dismissal, without further explanation, following months of apparent continued negotiations with the insurers.
Insurance Journal’s requests to the diocese and its lawyers for further explanation had not been answered by press time.
The insurers involved in the suit are Century Indemnity (Chubb), First State (Hartford), St. Paul Fire and Marine
(Travelers) and National Union Fire (AIG) of violations under the state’s Unfair Claim Settlement Practices Act.
The lawsuit filed in federal district court accused the insurers of failing to act “reasonably promptly” with r
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espect to claims; not attempting in good faith to effectuate settlements of claims in which liability has become reasonably cl
ear; and not providing reasonable explanations for denial of claims.
The diocese said in February that disagreements were over whether certain self-insured retentions in certain policies h
ave been exhausted and also over the proper interpretation of the trigger of coverage. According to the suit, the insurers have had differing responses to the claims.