Chartis Avoids Covering $150M Health Plan Settlement

Law360, New York (May 7, 2013, 7:18 PM EDT) -- A Delaware state judge on Tuesday said that Chartis Specialty Insurance Co. doesn't need to cover a $150 million settlement between policyholder First Health Group Corp. and a coalition of health care providers accusing the medical service underwriter of illegally scrimping on payments.

Ruling that the funds amount to penalties rather than actual damages as described by the policy, Judge Jerome O. Herlihy found that an exclusion for "fines, penalties or multiplied damages" frees Chartis of any coverage obligations for the Preferred Provider Organization Act settlement....
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