Insurance Providers Challenge $240M Settlement Obligations with Truist

Eight insurance providers are seeking to withdraw from their obligations under a $240 million settlement involving SunTrust Bank, now known as Truist following its merger with BB&T in 2019. The insurers, including prominent entities such as AXA XL, Chubb, Travelers, AXIS, and Hartford's Twin City Fire, filed a lawsuit on June 26, 2026, in the Western District of North Carolina's federal court. They seek a legal declaration absolving them from any duty to defend or indemnify Truist in this case.

The crux of the dispute centers around the timing and classification of claims under claims-made policies, which only respond to claims made within the designated policy period. The insurers provided coverage from October 1, 2009, to October 1, 2010, known as "Tower 2," with an aggregate limit of $120 million spread across primary and excess policies.

The origins of the dispute date back to lawsuits initiated in the 2008-2009 period, where customers accused SunTrust of manipulating transaction orders to maximize overdraft fees, as part of class actions labeled Peterson and Buffington. Another lawsuit, Bickerstaff, was filed on July 12, 2010, during the Tower 2 timeline. However, the insurers contest that Bickerstaff is closely related to the earlier Peterson case, as indicated by SunTrust's initial 2010 reporting, which categorized Bickerstaff in connection with the 2008-2009 period policies.

This connection is significant since policy terms dictate that claims sharing any logical or causal linkage are aggregated as one claim, initiated at the time of the earliest related claim. If Bickerstaff is interlinked with Peterson, the insurers argue it belongs to the Tower 1 period, thereby excluding Tower 2 coverage. Notably, SunTrust altered its stance on May 25, 2021, revising its position to regard Bickerstaff as a Tower 2 claim.

Another contention posed by the insurers concerns the nature of the settlement, asserting that it does not constitute "Damages" under the policy definitions. The insurers refer to policy terms excluding amounts pertaining to fees, commissions, or charges for professional services or lending acts. Since the settlement sum relates to returning overdraft fees collected by the bank, insurers argue these are excluded under the policy. Alternatively, insurers suggest the settlement amount represents interest, which is also not covered.

The litigation, which lasted 15 years, culminated in a $240 million settlement finalized in January 2026, with demands by SunTrust on the insurers to cover the limits of their policies. For insurance professionals, this case underscores the critical implications of relatedness clauses and the interpretations of "Damages" in resolving significant financial liabilities. The legal arguments are part of ongoing litigation, with no judicial determination yet rendered regarding coverage.