The U.S. District Court has under consideration whether insurance policies from years ago, discovered in the course of our Archdiocese's pending bankruptcy case, provide coverage to any of the claims of child sexual abuse. Claims based on allegations that our Archdiocese was negligent in reassigning known abusers are generally barred by the statute of limitations. As a result, claims have more recently alleged that it was a kind of fraud to fail to disclose to parishioners that a newly-assigned priest had a prior offense. [The statute of limitations for fraud does not begin to run until the fraud is, or should have been, discovered.]
The current controversy, as I understand it, involves policies from many years ago, discovered in the course of the bankruptcy case. Perhaps these policies' lack of coverage for fraud is not as clear as that in policies issued later. Regarding those, see Ms. Johnson's story in the November 23, 2010 Milwaukee Journal Sentinel, Insurance won't cover claims against archdiocese, appeals court rules, in which
"The victim advocacy group SNAP, or Survivors Network of Those Abused By Priests, lauded the decision.
"'It means no organization, including religious organizations, can use insurance money if they're going to commit fraud,' said Midwest co-director Peter Isely."