Sarah J. Delaney, Author at The Insurance & Reinsurance Report

September 8, 2015 Life, Health, Disability & ERISA

Sixth Circuit: SPD is Binding Plan Document, Subrogation Clause Enforceable

The central question in this appeal before the Sixth Circuit was whether the summary plan description (SPD) — the only document in the record that contained a subrogation provision — was a binding plan document with enforceable terms.

In this case, Bd. of Trs. v. Moore, U.S. Ct. Apps., Sixth Cir., Aug. 25, 2015, there was a Trust Agreement that authorized the Board of Trustees to adopt a written welfare benefits plan, to administer the plan, and to act as plan fiduciary. Central to the …

September 1, 2015 Bad Faith and Extra-Contractual Liability

Bad Faith in Louisiana: Insured’s Claim for Bad Faith Not Limited to Statutory Cause of Action

In a multi-layered decision, Century Surety Company v. Belvins, (United States Court of Appeals for the Fifth Circuit, August 18, 2015), the Fifth Circuit found that a policyholder could assert non-statutory bad faith claims against an insurer under Louisiana law. It also held that a district court could not sua sponte dismiss unchallenged counterclaims without notice to the parties, and affirmed that Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (1942)’s broad abstention doctrine (applicable in declaratory judgment action) did not …

July 23, 2015 Life, Health, Disability & ERISA

Accommodations for Contraception Coverage Exemptions Replace Subsidies As The ACA Story of the Week

In recent months, the main event in the challenges against the Affordable Care Act centered on the subsidies provisions in the ACA. The Supreme Court decided this matter in King v. Burwell. In July 2015, there were two additional key developments related to the provision requiring employers to provide contraception coverage.

On July 14, 2015, the 10^th Circuit Court of Appeals in Little Sisters of the Poor Home v. Burwell held that the self-certifying procedure in place for religious not-for-profits to take advantage …

July 14, 2015 Duty to Defend

Under Virginia Law, Despite the Separation of Insureds Provision, Insurer has No Duty to Defend Suit Alleging Insured is Liable Under Respondeat Superior for Intentional Acts of Agent

On July 10, 2015, the Fourth Circuit Court of Appeals held that an insurer had no duty to defend the insured university in a suit alleging that the insured participated in a kidnapping plot. The court found that the insurer had no duty to defend because the suit was based on the intentional acts of the insured’s employees.

In this case, the plaintiff alleged that the insured participated in a plot to kidnap the student in order to remove the student and keep her separated …

July 8, 2015 Life, Health, Disability & ERISA

Timing is Everything: Beneficiary Change Made During Divorce Action in Violation of NY’s Automatic Orders Ineffective

Reliastar Life Ins. Co. of New York v. Cristando, N.Y. App. Div., 2d Dept., June 3, 2015

Under New York law, while the designation of an ex-spouse beneficiary will be subject to automatic revocation in most circumstances, that same change cannot be made during the pendency of the divorce proceeding. The New York Appellate Division affirmed a trial court’s decision, finding such that a wife’s decision to change the beneficiary of her life insurance policy while her divorce was pending violated the “automatic orders” …

June 29, 2015 Life, Health, Disability & ERISA

Eleventh Circuit: Failure to Give Notice of Time Limit to File Action Does Not Render Contractual Limitations Period Unenforceable

In Wilson v. Standard Ins. Co. (U.S. Ct. Apps., 11th Cir.) the claimant filed her lawsuit claiming long term disability benefits thirty-four months after the three-year contractual limitations period. The claimant argued that equitable tolling should apply because the insurer’s denial letter did not give notice of the time limit and therefore was in violation of the ERISA regulations. The Eleventh Circuit found that the “claims procedure” regulation, 29 CFR 2560.503-1(g)(1)(iv), clearly required notice of the administrative review procedures and those time limits, as …

May 21, 2015 First Party Property

Anti-Concurrent-Causes Clause Bars Coverage When One Cause is Excluded

In JAW The Pointe, L.L.C., v. Lexington Ins. Co., 2015 WL 1870054 (Tex. April 24, 2015), the Texas Supreme Court found an insurer did not violate the Texas Insurance Code and the Texas Deceptive Trade Practices Act by denying coverage where the damages in question were caused in part by flooding, a cause excluded by the policy.

JAW The Pointe purchased an apartment complex in Galveston, Texas in 2007, only 14 months before Hurricane Ike struck. The complex sustained significant damage – estimated at …

May 15, 2015 Life, Health, Disability & ERISA

AD&D Policy Beneficiaries’ Recovery Limited To Death Benefits — No Recovery for Dismemberment Injuries Leading To Death

In Malbrough v. Kanawha Insurance Co., 2015 U.S. Dist. LEXIS 48394 (W.D. La. Apr. 9, 2015), the U.S. District Court for the Western District of Louisiana was asked to determine the benefit payable to the plaintiff beneficiaries under an Accidental Death and Dismemberment insurance policy issued by Kanawha. The court held in favor of the insurers, ruling that the beneficiaries were limited to death benefits only, and not to additional benefits relating to the loss of the decedent’s foot.

Following the death of the …

April 30, 2015 Life, Health, Disability & ERISA

Seventh Circuit: Federal Government Can Garnish Private Disability Insurance Payments for Restitution Order

U.S. v. France
U.S. Ct. Apps., Seventh Cir., Apr. 7, 2015

The Seventh Circuit ruled that the federal government has the power to garnish monthly payments from a private disability insurance policy belonging to a dentist that had been ordered, as part of his guilty plea to mail fraud, to pay restitution to victims for a fraudulent billing scheme.

Here, the dentist was ordered to pay $800,000 in restitution to the victims of his fraudulent billing scheme in 2002. However, in 2014, he had paid …

April 23, 2015 Uncategorized

Florida Court of Appeals Permits Post-Loss Assignment of Benefits to Third Party

In Accident Cleaners, Inc. v. Universal Insurance Co., 2015 SL 1609973 (Fla. Ct.App. April 10, 2015) the Florida Court of Appeals, Fifth District held the assignee of benefits under an insurance policy was not required to have an insurable interest in the insured property at the time of loss. The court further held that so long as the assignor had an insurable interest in the insured property at the time of the loss, such insurable interest is imputed to the assignee.

The assignee was …