Insured vs. Insured Exclusion Bars Coverage for Bank Officers in FDIC Suit

St. Paul Mercury Ins. Co. v. Miller
(N.D. Ga. Aug. 19, 2013) 

A Georgia court recently held that an insured-vs-insured exclusion in a directors and officers policy precluded coverage for two former officers of a failed bank sued by the FDIC.

The FDIC took over the failed Community Bank & Trust of Cornelia, Georgia and then sued two former officers in connection with their role in improperly approving loans. The bank’s D&O insurer agreed to defend the officers subject to a reservation of rights. In …

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Texas Supreme Court to Rule on BP-Transocean Coverage Dispute

(Tex. Sept. 6, 2013) 

The Texas Supreme Court announced Friday that it would enter the fight over $750 million in insurance coverage for the catastrophic BP oil spill that occurred in April 2010.

This past March, the Fifth Circuit rule on the scope of BP’s additional insured coverage under excess policies issued to Transocean. The Fifth Circuit ruled that “where an additional insured provision is separate from and additional to an indemnity provision, the scope of the insurance requirement is not limited by the indemnity …

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New York Court of Appeals to Re-Hear K2

The New York Court of Appeals granted a rehearing of a coverage decision that has wide ranging implications for the insurance industry. In K2 Investment Group LLC v. American Guarantee & Liability Insurance Co., decided on June 11, 2013, the Court of Appeals rejected American Guarantee’s argument that it was entitled to a trial over whether a policy exclusion applied after it had breached its duty to defend. In new found precedent, the Court of Appeals held that because the insurer had breached its …

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New York Court Predicts California’s Future: Allows Bad Faith Exception in Reinsurance Late Notice Defense

Ins. Co. of the State of Penn. v. Argonaut Ins. Co.
U.S. Dist. Ct., S.D.N.Y. (August 6, 2013)

In this case, the cedent sued its reinsurer when it denied coverage because of late notice of its claim.  Both parties filed a motion for summary judgment arguing the applicability of the late notice defense.  The court granted the reinsurer’s motion.

From 1980-2009, a series of disputes and negotiations arose regarding asbestos claims against the underlying insured.  It was not until 2009, through an “initial loss advice,” …

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Missouri Supreme Court Levies Insurer with Judgment $3 Million in Excess of Policy Limits in TCPA Case

Columbia Cas. Co. v. Hiar Holding, LLC
(Mo. Aug. 13, 2013)
The Missouri Supreme Court recently ordered an insurer to indemnify its insured for a $5 million settlement in an underlying Telephone Consumer Protection Act (TCPA) case, $3 million of which was in excess of the policy’s limits.

The TCPA provides a private right of action for recipients of unsolicited communications that are sent via automatic dialers, among other methods. A recipient may bring an action to recover $500 per violation, as well as treble …

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ABA’s Blawg 100 – Nominations Due August 9th

The ABA Journal is putting together its annual list of the 100 best legal blogs, based on reader votes. As publishers of the Insurance and Reinsurance Report, we are proud to be considered for this prestigious list — and we would be honored if you would help. If you enjoy visiting the Insurance and Reinsurance Report, and believe it is worthy of industry recognition, please click here to visit the ABA Blawg 100 Amici page and nominate us before the August 9 deadline. …

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Injury-In-Fact Trigger Applied In Alabama Manufactured Gas Contamination Suit

Alabama Gas Corp. v. Travelers Cas. & Surety Co.
(U.S.D.C. Northern District of Alabama, July 16, 2013)

This environmental coverage action arises from a dispute as to whether the insurer’s multiple policies provided indemnity for past environmental contamination at a former manufactured gas plant prior to being redeveloped as low income housing.

Specifically, the Huntsville Gas Light Company, which incorporated in 1856, provided manufactured gas from various sources to customers until 1946.  In 1946, the Huntsville facility was converted to a propane air system …

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California Cuts To Rural Healthcare Services Violate Medicaid Act

California Ass’n of Rural Health Clinica; Avenal Community Health Center v. Douglas et al.
United States Court of Appeals for the Ninth Circuit, July 5, 2013

California recently enacted legislation that eliminates coverage for certain healthcare services in under-served rural areas to help curb the State’s budgetary woes. Specifically, the legislation cut coverage for adult dental, podiatry, optometry and chiropractic services in rural areas. The court ruled that eliminating coverage for such programs would be in conflict with the Medicaid Act and that the legislation …

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10th Circuit Doesn’t Agree with ACA Rule on For-Profit Religious Organization Exemptions

Hobby Lobby Stores Inc. et al. v. Sebelius et al.
June 27, 2013
The plaintiff in Hobby Lobby Stores Inc. et al. v. Sebelius et al. operates 525 retail stores across the country and employs more than 13,000 full-time workers. The family which owns the Oklahoma-based company says having to provide coverage for the morning-after pill and similar contraceptives, which they regard as tantamount to abortion, violates their Christian beliefs.

The 10th Circuit found that the for-profit employer may be entitled to an exemption …

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Too Little, Too Late: Malpractice Coverage Evaporates With Law Firm’s Tardy Notice

Minnesota Lawyers Mut. Ins. Co. v. Baylor & Jackson, PLLC
(4th Cir. (Md.) June 27, 2013)

The Fourth Circuit recently held that a malpractice insurer was not obligated to defend or indemnify a law firm against a multi-million dollar lawsuit arising from the firm’s failure to submit admissible evidence in opposition to a motion for summary judgment. The court held that the firm breached the policy’s notice provision by waiting until an appellate court affirmed the lower court’s ruling granting summary judgment against its …

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