New York’s attorney general on Thursday challenged the $175 million bail bond posted by Donald Trump in a civil fraud case.
The “notice of exception” filed by New York Attorney General Letitia James calls into question the financial ability of the insurer to perform under the bond and the collateral behind the deal.
Knight Specialty Insurance Co., a Delaware-domiciled excess and surplus lines unit of Knight Insurance Group, confirmed earlier this week that it had provided Mr. Trump with a bond, preventing the attorney general from seizing Mr. Trump’s assets. Can go. Knight Specialty is part of Los Angeles-based financial services conglomerate Hankey Group of Cos.
Mr. Trump was originally required to post a $454 million bond, but on March 25 a state appeals court halted enforcement of Justice Arthur Engoron’s ruling on the condition that Mr. Trump pay $175 million within 10 days. Will deposit a small bond.
On February 16, Justice Engoron found that Mr. Trump had engaged in fraud by inflating his net worth by billions of dollars to secure better loan and insurance terms. Mr Trump has denied any wrongdoing in the case.
The petition, filed in New York trial court, says the state “objects to the adequacy of the surety” and notes that Knight Specialty is operating “without a certificate of competency” required by New York Insurance Law Section 1111.
It calls for Mr. Trump or Knight Special to file a motion to “justify the bail” within 10 days, otherwise the bond will not take effect, except that the surety “remains liable on the bond until a new The undertaking is not given and permission is not given,” according to the notice.
As a non-admitted insurer, Knight Specialty is not regulated by New York State and is not required to be licensed by the New York Department of Financial Services to write in the E&S market under insurance law. Therefore, it is unable to request a certificate of eligibility from the New York regulator.
In a separate filing on Thursday, Mr. Trump’s lawyers posted financial information about Knight Specialty and Knight Specialty Insurance Co. Ltd., a Cayman Islands-licensed reinsurer also owned by Hankey Group.
As per the filing, Knight Specialty had a surplus of $138.4 million and total approved assets of $539.3 million as of December 31, 2023. The filing also said Knight Specialty has received a financial strength rating of A- from AM Best Companies Inc. In 2022, Best described the balance sheet strength of Knight Companies as “very strong”.
Night Specialty did not respond to calls for comment. The New York Attorney General’s office declined to comment.
In New York, a foreign or out-of-state insurer must maintain a minimum policyholder surplus of $48 million and be licensed in their state of residence for the business they plan to conduct, the Extra Line Association of New York said in an email. Should be. Write as additional line risk in New York.
The association said it maintains a voluntary list of excess lines insurers and conducts a thorough financial examination of each foreign insurer listed.
“This list does not reflect all insurers that are legally eligible to write excess lines insurance in New York. Knight Specialty Insurance Company ELANY is not on the voluntary list,” a spokesperson for the association said in an email.
According to news reports, under the New York law known as CPLR 2502, unless the court orders otherwise for a court bond, a surety will be “an insurance company authorized to execute undertakings within the state.”
Justice Angoron scheduled a bail bond hearing for April 22.
