Emerging Issues Archives - Page 9 of 18 - The Insurance & Reinsurance Report

May 19, 2014 Emerging Issues

If It Walks Like a Duck and Talks Like a Duck … IL Appellate Court Applies Violation of Statutes Exclusion To Preclude Coverage for Non-TCPA Counts in Blast Fax Suit

On May 2, 2014, the Illinois Appellate Court, Second District enforced the Violation of Statutes Exclusion to preclude coverage entirely for a $4.9 million settlement arising out a blast fax suit. The case, G.M. Sign, Inc. v. State Farm Fire & Casualty Company, 2014 IL App (2d) 130593, is the first published appellate decision interpreting this standard ISO exclusion to conversion and consumer fraud causes of action.

In G.M. Sign, the underlying lawsuit contained causes of action for violations of the Telephone Consumer …

May 14, 2014 Emerging Issues

Preemptive Power Shutdown From Hurricane Sandy Was Not A Covered Business Interruption Claim

This coverage action arises from the widespread power outages that occurred in and around New York City during and after Hurricane Sandy. On October 29, 2012, in anticipation of storm-related flooding, utility provider Consolidated Edison Co. of New York, Inc. preemptively shut off power to certain of its service networks to preserve the integrity of the utility system. As a result, the plaintiff, a law firm, was without power at its lower Manhattan office for several days. The firm filed a claim under its property …

April 30, 2014 Emerging Issues

Oregon to Join the Federal Healthcare Exchange

The first Affordable Care Act (ACA) health exchange open enrollment period ended March 31, 2014. States and others are now doing their own evaluations and “after action reports” in an effort to find out what went well and what did not.

As of April 1, 2014, approximately 8 million people enrolled via the exchanges. There are still some remaining questions such as how many have paid their premiums and what impact the young invincibles will have on premiums for the 2015 enrollment period. Just under …

April 29, 2014 Emerging Issues

TCPA Exclusion Upheld by the Eleventh Circuit

In a lawsuit brought by a distribution and marketing company, the policyholder sought coverage for a lawsuit alleging that it sent “unwanted ‘junk’ faxes in violation of the [Telephone Consumer Protection] Act.” The insurer denied coverage due to the exclusion concerning violation of statutes in connection with sending, transmitting or communicating any material or information.

The Eleventh Circuit affirmed the decision of the Middle District Court of Florida finding that the exclusion was not ambiguous or void as against public policy. Specifically, the Circuit Court …

March 27, 2014 Emerging Issues

Excess Carrier Has Equitable Subrogation Rights Against Primary Carrier For Not Settling Within Policy Limits

On September 19, 2007, claimant William Kelly was injured while descending a stairway in Hawthorne, California. Kelly sued F. H. Paschen, Inc., the general contractor for a construction project on the stairway.

In the ensuing declaratory judgment action, Paschen’s excess carrier, Westchester Fire Insurance Company (Westchester), alleged that Paschen’s primary insurer, Zurich American Insurance Company (Zurich), failed to notify Westchester of the litigation and failed to settle the underlying case within the $1 million primary policy limits. Westchester sought to recover $700,000 it paid on …

February 27, 2014 Emerging Issues

NYDFS Announces New Extension to Sandy Mediation Program

The New York Department of Financial Services (NYDFS) has extended the emergency regulation (15^th Amendment to Regulation 64, 11 NYCRR 216) surrounding mediations relating to Hurricane Sandy. The current version was filed with the Secretary of State on February 14,2014 and will expire on or about May 15, 2014 under the 90 day rule.

Originally promulgated in the aftermath of Superstorm Sandy, the amendment applies to any claim for loss or damage, other than claims made under flood policies issued under the national flood …

February 19, 2014 Emerging Issues / Legislative Update

LIMA: A New Liability Exit Strategy Comes to the U.S.

On February 19, Vermont Governor Peter Shumlin signed the Legacy Insurance Management Act (LIMA). The law enables a non-admitted insurer in the U.S. or abroad to transfer closed blocks of commercial insurance/reinsurance business with outstanding liabilities, together with the reserves relating to those liabilities, to Vermont-admitted insurers or other investors. These Vermont entities would then assume all financial and legal liabilities associated with these insurance policies/reinsurance agreements. This law, the first of its kind in the U.S., creates a legal, regulatory, and structural framework for …

February 18, 2014 Emerging Issues

Insurers Reach the Summit: N.Y. Court of Appeals Reverses K2, Says Exclusions Not Lost in Breach of Duty to Defend

After granting reargument, the New York State Court of Appeals reversed its previous decision finding that the rule of stare decisis must govern and that the court erred by failing to take account of controlling precedent in Servidone Const. Corp. v. Sec. Ins. Co. of Hartford. In that previous decision, K2-I, the court arguably rewrote New York law by adopting a minority position that recognized the doctrine of coverage by estoppel ruling that where an insurer breaches its duty to defend, it has …

February 10, 2014 Emerging Issues

N.Y. Attorney General, EmblemHealth Reach Settlement Over Continuation Coverage

In a press release, Attorney General Eric Schneiderman announced that his office had conducted an investigation into widespread violations of New York’s Age 29 Law, which requires health insurers to offer young adults continuation health coverage on their parents’ policies until they turn 30. Following the investigation, a settlement was reached with the health insurer requiring it to reinstatement health coverage to more than 8,000 young adults whose coverage was wrongly terminated, and to pay approximately $90,000 in denied claims.

The federal Affordable Care Act …

January 30, 2014 Emerging Issues

World Bank Issues First PacCat Insurance Payout to Tonga

The World Bank has issued its first insurance payout under the Pacific Catastrophic Risk Insurance pilot program. Tonga will receive $1.27 million to help with disaster relief associated with Cyclone Ian, which took place on January 11. Ian was the equivalent of a Category 4 or 5 hurricane, with gusts up to 178 miles per hour.

Under the program started in January 2013, the World Bank acts as an intermediary purchasing catastrophic risk coverage from private insurers including Sompo Japan Insurance, Mitsui Sumitomo Insurance, …