Policyholder’s Withholding Material Information Precludes Recovery

Southern Realty Mgmt, Inc. v. Aspen Specialty Ins. Co., et al.

(N.D. Ga, April 28, 2009)

The insurers contended that the policyholder violated the policy provisions when it concealed the sale of the subject damaged property on the proof of loss and refused to cooperate with insurers by turning over all sale documents. The court noted that under Georgia law, an insurer has a compelling interest in, and right to, an accurate proof of loss. Also, a policyholder may not unilaterally determine that some of

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D&O Policy Exclusion of Coverage for Claims Arising From a Contract Does Not Apply

S.J. Amoroso Construction Company, Inc. v. Executive Risk Indemnity, Inc.

(9th  Cir.(Cal.), April 30, 2009)

The underlying complaint alleged damages as a result of a third party’s misrepresentations that induced one party to contract with another. The theory of liability depended on the fact that the third party was not a party to the contract and had no liability under it. Therefore, the exclusion did not apply.

By Richard J. Cohen and Carrie P. Appler



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Tenth Circuit Reversed District Court’s Ruling and Found The Arbitration Clause in The Reinsurance Agreement Enforceable


(CIVIL ACTION NO.:   07-5050 – MAY 22, 2009)

Appellant-reinsurer appealed a decision from the district court of Oklahoma in which it denied its motion to stay the action and compel arbitration pursuant to the reinsurance agreement entered into by the parties.  Appellant-reinsurer argued that Section 1 of the Federal Arbitration Act (FAA) was controlling and thus arbitration, not federal court, was the proper venue to resolve any dispute.  The lower court concluded that  Oklahoma law,

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In a 6-3 Decision, The Supreme Court Finds that Non-signatories to an Arbitration Agreement Are Allowed to Invoke The Federal Arbitration Act (FAA)


(CIVIL ACTION NO.:   08-146 – MAY 4, 2009)


At issue before the Supreme Court is whether a non-party to an arbitration agreement is nonetheless allow to invoke Section 3 of the Federal Arbitration Act (FAA). 


The issue arose from a tax dispute in which the respondents attempted to minimize their tax liability exposure from the sale of their construction equipment company.  The petitioner assisted them as their accountant to establish designated tax shelters

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Swine Flu Policies Are Now Being Offered in Hong Kong

Several publications are now reporting that several insurers, including AIG, are providing cash payments to travelers forced to be quarantined when overseas or on returning to Hong Kong as a result of the H1N1 virus known commonly as the "swine flu." 

Moreover the policy also provides that if an insured dies due to swine flu complications the insured's beneficiaries would also receive monetary payments.  The current policy being offered by AIG/Hong Kong Travel allows individual to obtain approximately $600 per day if quarantined or diagnosed with the swine

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NY Appellate Court Clarifies Timely Disclaimer Statute in Claims Between Carriers

JT Magen v Hartford Fire Ins.

(1st Dept May 20, 2009)

The court revisted its prior decision in Bovis Lend Lease, LMB v Royal Surplus Lines Ins. Co. (27 AD3d 84 [2005]), which held that the timely notice disclaimer requirements of Insurance Law 3420(d) did not apply to claims between coinsurers. Here, the court held that a disclaimer by Hartford was late pursuant to the statute, despite the fact that notice was given by a coinsurer, Travelers. The court reasoned that Travelers provided notice on

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Santa Barbara Fire to Cost in Excess of $130 Million

According to several reports, the cost of the Santa Barbara fire that burned over 8,000 acres and destroyed close to 80 residential homes may exceed $130 million dollars representatives from First American Spatial Solutions (FASS) said. 

While the amount of the loss appears to be large, it could have been worse given the large geographic exposure, the large population and the magnitude of the fire. 

Representative from FASS estimates that it values the average property damage to be approximately $1.2 million per property. 

for more information:  https://www.reinsurancemagazine.com/public/showPage.html?page=reinsurance_breakingnews_story&tempPageName=858594

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Edward Liddy, AIG’s Chairman and CEO, to resign.

Edward Liddy, AIG's current Chairman and CEO, announced today that he will resign as both CEO and Chairman for the company.  His goal is to step down when AIG's Board of Directors have found suitable replacements but no timetable has been set.   

Mr. Liddy also recommended to AIG's Board of Directors that it should consider the position of CEO and Chairman separate and distinct.  The Board agreed with his assessment and the search will begin immediately with expected participation by both the Board of Directors and the Trustees

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