Freddie Mac’s directors and officers (D&O) coverage tower initially provided $85 million in policy limits to cover the lender’s defense costs. However, disputes arose over unreimbursed expenses, leading Freddie Mac to sue four excess insurers—Twin City Fire Insurance Co., Axis Reinsurance Co., Houston Casualty, and Lloyd’s underwriters—in June 2023 for $32 million.
Settlements with Insurers
The settlement with Lloyd’s follows resolutions with the other insurers:
Twin City Fire Insurance Co.: Dismissed in May 2023 after paying $7.3 million toward Freddie Mac’s defense.
Axis Reinsurance Co.: Agreed in October 2023 to pay its full $10 million policy limit.
Houston Casualty Co.: Dismissed after a January 2024 settlement.
Legal Representation
Freddie Mac was represented by Matthew J. Schlesinger and Colin P. Watson of Covington & Burling LLP.
The underwriters were represented by John R. Gerstein of Clyde & Co. LLP.
Houston Casualty was represented by Joseph A. Bailey III of Werner Ahari Mangel LLP.
