IN THE SUPREME COURT OF THE STATE OF DELAWARE

PROTECTIVE LIFE INSURANCE 

COMPANY, PROTECTIVE LIFE 

AND ANNUITY INSURANCE 

COMPANY, WEST COAST LIFE 

INSURANCE COMPANY, and 

MONY LIFE INSURANCE 

COMPANY,

Interested Parties Below,

Appellants,

 v.

THE HONORABLE TRINIDAD 

NAVARRO, Insurance 

Commissioner of the State of 

Delaware, in his capacity as Receiver 

for SCOTTISH RE (U.S.), INC.,

Petitioner Below,

Appellee.

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§ No. 217, 2020

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§ Court Below—Court of Chancery

§ of the State of Delaware

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§ C.A. No. 2019-0175-AGB

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PROTECTIVE LIFE INSURANCE 

COMPANY, PROTECTIVE LIFE 

AND ANNUITY INSURANCE 

COMPANY, WEST COAST LIFE 

INSURANCE COMPANY, and 

MONY LIFE INSURANCE 

COMPANY,

Interested Parties Below,

Appellants,

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§ No. 218, 2020

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§ Court Below—Court of Chancery

§ of the State of Delaware

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§ C.A. No. 2019-0175-AGB

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2

 v.

THE HONORABLE TRINIDAD 

NAVARRO, Insurance 

Commissioner of the State of 

Delaware, in his capacity as Receiver 

for SCOTTISH RE (U.S.), INC.,

Petitioner Below,

Appellee.

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Submitted: July 27, 2020

 Decided: September 4, 2020

Before SEITZ, Chief Justice; TRAYNOR and MONTGOMERY-REEVES, 

Justices.

ORDER

After consideration of the notices to show cause, the responses, the notice of 

interlocutory appeal, and the supplemental notice of interlocutory appeal, it appears 

to the Court that:

(1) The appellants, Protective Life Insurance Company, Protective Life and 

Annuity Insurance Company, West Coast Life Insurance Company, and MONY Life 

Insurance Company (collectively, “the Protective Entities”), filed these appeals from 

a Court of Chancery order (“the Order”) dismissing their petition in the rehabilitation 
3

proceeding of Scottish Re (U.S.), Inc.1 The events leading to these appeals are 

described below. 

(2) Beginning in the 1970s, the Protective Entities entered into or assumed 

reinsurance agreements under which Scottish Re reinsured a portion of their life 

insurance policies. The Protective Entities also entered into agreements with thirdparty life insurers under which the Protective Entities coinsured and administered

third-party business reinsured with Scottish Re. In January 2018, Scottish Re and

each of the Protective Entities entered into a global settlement resolving rate disputes 

and other issues that had arisen between the parties (“Settlement Agreement”). The 

Settlement Agreement included an offset provision, which the Protective Entities 

argue authorizes a group offsetting methodology to calculate offsets.

2

(3) On March 6, 2019, the Court of Chancery entered a Rehabilitation and 

Injunction Order (“the Rehabilitation Order”) pursuant to the Delaware Uniform 

Insurers Liquidation Act (“DUILA”), 18 Del. C. § 5901 et seq. The Rehabilitation 

Order placed Scottish Re in rehabilitation, appointed the Honorable Trinidad 

Navarro, Insurance Commissioner of the State of Delaware as Receiver for Scottish 

 

1

In re Scottish Re (U.S.), Inc., 2020 WL 2549288 (Del. Ch. May 19, 2020).

2 Under the group offsetting methodology, premium amounts owed by one Protective 

Entity are offset against reimbursed claims owed to a different Protective Entity. Id. at *1. 
4

Re (“the Receiver”), and enjoined the ability of cedents like the Protective Entities 

to offset obligations owed to Scottish Re.

(4) On June 20, 2019, the Court of Chancery approved the Receiver’s plan

for addressing contractual offset rights during the rehabilitation proceeding (“the 

Offset Plan”). The Offset Plan provided that, in the event of a dispute concerning 

offsets, the Receiver or offset claimant could file a petition with the Court of 

Chancery for a determination of the offset amount or other appropriate relief. On 

July 10, 2019, the Court of Chancery approved a stipulation between the Receiver 

and Protective Entities under which the Receiver agreed to certain offsets, but 

objected to others. 

(5) On August 5, 2019, the Protective Entities filed a petition, which they 

amended on October 28, 2019 (“the Petition”), under the Offset Plan. In the Petition, 

the Protective Entities sought an order directing the Receiver to honor Scottish Re’s 

obligations under the Settlement Agreement by allowing the Protective Entities to 

use a group offsetting methodology for calculating offsets. On December 13, 2019, 

the Receiver filed a motion to dismiss the Petition for failure to state a claim under 

Court of Chancery Rule 12(b)(6). 

(6) On May 19, 2020, the Court of Chancery dismissed the petition. First, 

the Court of Chancery held that the Settlement Agreement did not create the 

mutuality required by 18 Del. C. § 5927 for offsets during rehabilitation or 
5

liquidation proceedings.

3

 Second, the Court of Chancery concluded that the 

Settlement Agreement did not satisfy the single integrated transaction requirement 

for recoupment.

4

 Third, the Court of Chancery held that the Receiver was not 

obligated to accept or reject an executory contract before providing a final 

rehabilitation plan for approval.

5

 

(7) On June 30, 2020,6the Protective Entities filed an application for 

certification of an interlocutory appeal. The Receiver took no position on the 

application. On July 20, 2020, the Court of Chancery denied the application for 

certification.7

(8) In denying the application for certification, the Court of Chancery 

found that the Order decided three issues (described in ¶ 6) of material importance.

8

 

As to the Rule 42(b)(iii) criteria, the Court of Chancery concluded that the three 

issues were a matter of first impression in Delaware (Rule 42(b)(iii)(A)). In addition, 

 

3

Id. at *3-4.

4

Id. at *5.

5

Id. at *5-6.

6 Under Supreme Court Rule 42, an application for certification of an interlocutory appeal 

must be filed within ten days of the entry of the interlocutory order and the notice of appeal 

must be filed in this Court within thirty days of the entry of the interlocutory order. Supr. 

Ct. 42(c)(i), (d)(i). Rule deadlines were extended under the judicial emergency declared 

by the Chief Justice in response to the COVID-19 pandemic. Administrative Order No. 7 

¶ 7 (Del. June 5, 2020) (extending deadlines that expired between March 23, 2020 and June 

30, 2020 through July 1, 2020), available at https://courts.delaware.gov/rules/pdf/COVID19AdminOrderNo7.pdf.

7

In re Scottish Re (U.S.), Inc., 2020 WL 4048289 (Del. Ch. July 7, 2020).

8

Id. at *4.
6

the first issue—the mutuality required by § 5927 for offsets—related to the 

construction or application of a statute that has not been settled by this Court (Rule 

42(b)(iii)(C)).

9

 Considering the most efficient and just schedule for resolving the 

case, the Court of Chancery noted that it would soon be considering the Receiver’s 

proposed plan of rehabilitation.

10

 The Court of Chancery recognized the possibility 

that the plan confirmation process could result in the parties settling their disputes 

(making appellate review unnecessary) as well as the possibility the Protective 

Entities or other objectors might wish to appeal different aspects of the final 

rehabilitation plan.11 Given the possibility of piecemeal appeals in a complex 

insurance receivership proceeding, the Court of Chancery concluded that the balance 

of the likely benefits and probable costs of an interlocutory appeal was uncertain and 

required denial of the application for certification.12

(9) The Protective Entities filed two appeals from the Order in this Court—

interlocutory Appeal No. 217, 2020 and Appeal No. 218, 2020. According to the 

Protective Entities, they filed two appeals from the same Order because there is

limited guidance concerning whether the Order is interlocutory or final. The Senior 

 

9

Id.

10 Id.

11 Id.

12 Id. at *5.
7

Court Clerk issued a notice directing the Protective Entities to show cause why 

Appeal No. 218, 2020 should not be dismissed as interlocutory. 

(10) In response to the notice to show cause, the Protective Entities argue 

that the Order is final because the dismissal of the petition for failure to state a claim 

under Rule 12(b)(6) was similar to the dismissal of a complaint, which is generally 

appealable as a final judgment. The Protective Entities acknowledge the conflicting 

case law in other jurisdictions regarding what constitutes an appealable final order 

under statutes similar to DUILA, but rely on language in the U.S. Supreme Court’s 

recent decision in Ritzen Group, Inc. v. Jackson Masonry, LLC13 to argue that the

Order is final and appealable. In Ritzen, the U.S. Supreme Court recognized that 

“[o]rders in bankruptcy cases qualify as ‘final’ when they definitively dispose of 

discrete disputes within the overarching bankruptcy case” and concluded that a 

bankruptcy court order conclusively denying a motion for relief from the automatic 

stay constitutes a final, appealable order.14

(11) At the Court’s request, the Receiver filed a reply to the Protective 

Entities’ response to the notice to show cause. The Receiver argues that the Order 

does not have the characteristics of a final order because it does not finally determine 

the Protective Entities’ right to recover. The Receiver distinguishes the cases 

 

13 140 S.Ct. 582 (2020)

14 Id. at 586-92.
8

discussing statutory provisions similar to § 5902(e) that the Protective Entities relies 

upon. 

(12) We first address whether the Order is final. If the Order is final, then it 

is unnecessary to address interlocutory Appeal No. 217, 2020 and that appeal will 

be dismissed. Under the DUILA, “[a]n appeal shall lie to the Supreme Court from 

an order granting or refusing rehabilitation, liquidation or conservation and from 

every order in delinquency proceedings having the character of a final order as to 

the particular portion of the proceedings embraced therein.”15 

(13) This Court has not addressed the meaning of an “order in delinquency 

proceedings having the character of a final order” under § 5902(e).

16

 In other 

contexts, we have held that an order constitutes a final judgment when “it leaves 

nothing for future determination or consideration.”17 As the Protective Entities note, 

the dismissal of a complaint is generally appealable as a final order.18

(14) “Cases from other jurisdictions provide persuasive guidance about how 

to interpret the Insurers Liquidation Act.”19 The case law from other jurisdictions 

 

15 18 Del. C. § 5902(e).

16 In Cohen v. State ex rel. Stewart, we concluded that it was unnecessary to address 

whether three orders, which imposed sanctions for violation of an injunction, were 

appealable under § 5902(e) because we found those orders appealable under the collateral 

order doctrine. No. 545, 2013, Order ¶ 4 (Del. Nov. 12, 2013). 

17 Showell Poultry, Inc. v. Delmarva Poultry Corp., 146 A.2d 794, 796 (Del. 1958).

18 Braddock v. Zimmerman, 906 A.2d 776, 784 (Del. 2006).

19 Cohen v. State ex rel. Stewart, 89 A.3d 65, 93 (Del. 2014).
9

addressing what constitutes a final order under statutes like § 5902(e) is limited and 

somewhat conflicting.

20

 After considering those cases and the nature of the Order, 

we conclude that the Order does not have the characteristics of a final, appealable

order under § 5902(e). 

(15) The process leading to a court-approved rehabilitation plan remains 

ongoing. As the Court of Chancery noted in denying the application for certification 

of an interlocutory appeal, it is possible that the Protective Entities could recover on 

their unpaid claims as part of this process. The Protective Entities may also raise the 

issues decided in the Order (as well as other issues) in an appeal of the Court of 

Chancery’s approval of a final rehabilitation plan. The Protective Entities’ 

suggestion that the Order is analogous to the denial of a motion for relief from the 

automatic stay under the federal Bankruptcy Code is unpersuasive. The Order, 

which involved the application of state law and determined offset rights that would 

also be addressed in the final rehabilitation plan, is not analogous to a bankruptcy 

 

20 Compare In re Pac. Marine Ins. Co. of Alaska in Liquidation, 877 P.2d 264, 268 (Alaska 

1994) (holding that no orders in a liquidation or receivership have the character of a final 

order until the receivership action is terminated or the trial court certifies the order under 

Rule 54(b)) and PrimeHealth Corp. v. Ins. Comm’r of State, 758 A.2d 539, 547-48 (Md. 

Ct. Spec. App. 2000) (describing process that leads to approved rehabilitation plan as one 

proceeding and finding that order authorizing the Insurance Commissioner as rehabilitator 

to withdraw HMO’s demand for an administrative hearing was not a final, appealable 

order) with Fewell v. Pickens, 57 S.W.3d 144, 150-52 (Ark. 2001) (holding that trial court 

was not divested of subject matter jurisdiction to hear liquidation petition while an appeal 

was pending on the order appointing a receiver because the appeal provision of the 

Arkansas Uniform Insurers Liquidation Act contemplated that appeals would arise 

piecemeal).
10

court’s ruling on a stay-relief motion, which the U.S. Supreme Court has described 

as occurring apart from proceedings on the merits of creditors’ claims and apart from 

the adversary claims-adjudication process that is typically governed by state law.

21

We therefore conclude that the Order is interlocutory and that Appeal No. 218, 2020 

must be dismissed. 

(16) Finally, we address whether interlocutory Appeal No. 217, 2020 should 

be accepted. Applications for interlocutory review are addressed to the sound 

discretion of the Court.22 In the exercise of our discretion and giving great weight 

to the Court of Chancery’s thoughtful analysis in denying the application for 

certification, this Court has concluded that the application for interlocutory review 

does not meet the strict standards for certification under Supreme Court Rule 42(b). 

The case is not exceptional,23 and the potential benefits of interlocutory review do 

not outweigh the inefficiency, disruption, and probable costs caused by an 

interlocutory appeal.24 We therefore refuse interlocutory Appeal No. 217, 2020.

NOW, THEREFORE, IT IS ORDERED that Appeal No. 218, 2020 is

DISMISSED and interlocutory Appeal No. 217, 2020 is REFUSED. The filing fee 

paid by the appellants shall be applied to any future appeal they file from an 

 

21 Ritzen, 140 S. Ct. at 589.

22 Supr. Ct. R. 42(d)(v).

23 Supr. Ct. R. 42(b)(ii).

24 Supr. Ct. R. 42(b)(iii).
11

interlocutory appeal that is certified by the Court of Chancery or a final order entered 

in the case. 

BY THE COURT:

/s/ Tamika R. Montgomery-Reeves

Justice