Global Insurance Services Practice Group

All articles by Global Insurance Services Practice Group

 

Excess Coverage Means Excess Coverage, Unless it Doesn’t: Texas Court Holds Umbrella Policy is Excess over a Primary Policy that is “Excess by Coincidence”

Not all excess coverage is created equal. Some excess coverage is true excess coverage of last resort. But other times, excess coverage is not. For example, a Texas Federal Court recently ruled that a true excess policy applied as excess over a CGL policy that was excess due to the circumstances of the underlying action. By way of background, Pace was the real estate manager for the property owner, Dolce. Pace was an insured under Dolce’s CGL policy, with $1
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New York Court Denies Reinstatement of STOLI Policies for Lack of Standing, Finds Issue of Fact on Good Faith and Fair Dealing

The plaintiff was an investment trust that purchased life insurance contracts. It brought the instant action seeking damages for the insurer’s alleged breach of nine lapsed life insurance policies on three different individuals with a collective face value of over $80 million. It was undisputed that all nine policies were pieces of a “Stranger Originated Life Insurance” or “STOLI” transaction. Although purchasing life insurance with the intent of selling it to strangers became illegal in 2009, these transactions were legal at the time the policies in
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Hold the Sauce: Insurer Must Indemnify Insured for Trade Disparagement and Defamation Claims Arising Out of Indian Sauce Recipe Dispute

Rass Corporation v. The Travelers Companies, Inc., No. 15-P-358, 2016 Mass. App. LEXIS 163 (Nov. 10, 2016), represents a continuation of Massachusetts law in the context of an insurer’s duty to defend, indemnify, and settle in good faith. Since the underlying settlement included covered and non-covered claims, the court concluded The Travelers Companies, Inc. and Travelers Property Casualty Companies of America were obligated to indemnify Rass Corporation for the amount the trial court allocated to covered claims. As background, Ranbir
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Seventh Circuit: No Insurable Interest, No Problem (For the Beneficiary, That Is!)

The Seventh Circuit recently affirmed a district court decision upholding payment under a life insurance policy purchased by a securities intermediary. The decision first addressed the common law’s prohibition on wagering contracts, or stranger-originated life insurance, and the traditional remedy which invalidates any such policy of insurance. However, this case was subject to Wisconsin law, whose legislature places the risk on the insurer for issuing a policy to someone without an insurable interest by refusing to invalidate such contracts. Specifically,
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Don’t Skip Steps When Analyzing the Foundation for a Covered Claim: No Publication and No Use of Advertising Ideas Means No Duty to Defend Beauty School Dispute

Desabato v. Assurance Co. of America et al., No. 2:15-cv-484, 2016 U.S. Dist. LEXIS 135389 (W.D. Pa. Sept. 30, 2016) represents a continuation of Pennsylvania law in the context of an insurer’s duty to defend personal and advertising injury claims. As articulated in Desabato, Pennsylvania adheres to a strict four-corners analysis of an insurer’s duty to defend. Since the underlying complaint failed to allege the elements of defamation or misappropriation of advertising ideas, the court held Assurance Company of America,
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Insurers Beware: The Illinois Department of Insurance Issued a Notice of Proposed Rule Regarding Knowledge of Misrepresentations and False Warranties

In August, the Illinois Department of Insurance (DOI) proposed its second rule on misrepresentations and false warranties in less than two years. Citing various concerns, the DOI withdrew its December 2014 proposed rule nearly a year ago, in October 2015. The impetus for the new proposed rule appears to be the DOI’s perception that insurers are not considering “readily available information” before seeking to rescind insurance policies. The new proposed rule on misrepresentations would be promulgated as Ill. Admin. Code
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No, No, No: No Accident, No Property Damage, No Duty to Defend Under Illinois Law

Westfield Insurance Co. v. West Van Buren, LLC, et al., 2016 IL App (1st) 140862 represents a continuation of Illinois law in the context of an insurer’s duty to defend construction defect claims. As articulated in Westfield, accidental events are required to trigger a duty to defend and shoddy workmanship does not constitute property damage. In addition, since the underlying complaint did not seek damages for any personal property damage, the Illinois Appellate Court held Westfield Insurance Company had no
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Looking for Balance in Principle-Based Reserving

In a recent article in Law360, Frederick J. Pomerantz and Aaron J. Aisen, attorneys in Goldberg Segalla’s Global Insurance Services Practice Group, provide a comprehensive overview of Principle-Based Reserving and the reasoning behind the National Association of Insurance Commissioners’ decision to adopt this new system.  The NAIC recently announced it adopted the recommendation of the Principle-Based Reserving Implementation Task Force to switch to PBR starting Jan. 1, 2017. As Fred and Aaron write in their analysis, “There are still a number of outstanding issues
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Seventh Circuit Dispatches Insurer’s Coverage Defenses Against Ambulance Company

The Seventh Circuit affirmed a district court’s summary judgment in favor of an insured, finding that the insured may qualify as being in a “joint venture” with the named insured. In American Alternative Insurance Corp. v. Metro Paramedic Services, Inc. (Jul. 12, 2016), the issue confronting the court was whether allegations in the underlying complaint that the named insured and putative insured were engaged in a joint venture also satisfied the policy’s use of the term “joint venture,” at least
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Insurer Accused of Having Ace Up its Sleeve: Insurer Estopped from Relying on Sublimit Due to Defense Counsel’s Failure to Supplement Discovery Responses in Tort Lawsuit

In Harwell v. Fireman’s Fund Insurance Co. of Ohio, 2016 IL App (1st) 152036, the Illinois Appellate Court refused to allow Fireman’s Fund Insurance Company to assert a policy sublimit because defense counsel retained by Fireman’s Fund to represent its insured in the underlying tort lawsuit failed to inform the tort claimant that the sublimit, and not the full limit, applied. As background, Brian Harwell was injured while working at a construction project supervised by Kipling Development Corporation as a
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Former FIFA Executive Entitled to Criminal Defense Costs in Bribery Case; D&O Insurers Required to Pay

Eduardo Li, one defendant of a widespread racketeering and fraud prosecution against FIFA and its members, brought this case seeking a declaration his insurers have to pay and advance his criminal defense costs regarding those prosecutions. The Eastern District of New York Court found that the insurers must immediately reimburse and advance legal costs for Li under a directors and officers liability policy. Eduardo Li and other members of FIFA are the subject of criminal actions for corruption related to
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A Short-Lived Victory For MetLife Over SIFI Designation?

Frederick J. Pomerantz and Aaron J. Aisen, attorneys in Goldberg Segalla’s Global Insurance Services Practice Group, analyzed the recent decision that granted MetLife’s motion to remove the non-bank SIFI designation imposed by the Financial Stability Oversight Council (FSOC). The decision marked the first time a SIFI-designated company challenged the designation, which the court overturned on three grounds all based on principles of administrative law. As Fred and Aaron write in their analysis for Law360, “The implications of this decision for MetLife
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Rescission Available to Insurer Whose Insured Lied in Insurance Application About Use of Experimental Weight Loss Techniques

In Essex Insurance Company v. Galilee Medical Center S.C d/b/a MRI Lincoln Imaging Center, the insured, Galilee, represented to its insurer, Essex, that it did not offer any weight loss drugs to its patients. After a former patient brought suit against Galilee based on complications from injections of a weight loss drug, Essex sought to rescind its policy. The Seventh Circuit Court upheld summary judgment granted to Essex, finding that false statements made by Galilee provided a basis for rescission.
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GAO’s Update on ACA Enrollment Process: CMS Encouraged to Take Steps to Monitor Program Cost, Risk, and Performance

The issue of fraud is still alive and well with respect to the health care exchanges established by the Affordable Care Act (ACA). The Government Accountability Office (GAO) recently issued a new update with respect to fraud in the federal exchanges. In that report, the GAO recommended that the Center for Medicaid and Medicare Services (CMS) strengthen enrollment controls and manage Fraud Risk. The report notes that implementation of the new eligibility and enrollment provisions for the first year was
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No Smoking! Pollution Exclusion Bars Coverage For Claims Arising Out of “Smoky” Beverage

While Florida courts have typically refused to limit pollution exclusions within insurance policies to traditional environmental claims, a District Court in Florida has extended the application of such exclusions even further by finding that a pollution exclusion applies to claims against a bar for injuries allegedly caused by an “exotic” cocktail served by the bar. In Evanston Insurance Company v. Haven South Beach, LLC, et al., Case No. 15-20573 (S.D. Fla. Dec. 28, 2015), the insured, a bar, served an
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A Supreme Lesson on Diligence and Equity: Court Bars Recovery of Equitable Lien Under ERISA Plan

The Supreme Court issued its decision in Montanile v. Board of Trustees of National Elevator Industry Health Benefit Plan , holding that the fiduciary could not enforce its equitable lien against general assets. The court reversed the Eleventh Circuit, finding that where a plan participant has obtained a settlement from a third party — but has dissipated the settlement on nontraceable items — the fiduciary cannot bring a suit under Section 502(a)(3) to attach the general assets of the participant
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Non-Party’s Claim of Employment Relationship with Plaintiff Creates Question of Fact in DJ Action

A complaint clearly and repeatedly alleges the plaintiff was the employee of the defendant, but for purposes of the employment practices exclusion, was she really? At this point, it’s unclear after her “real” employer claims her as its own in the declaratory judgment action. Bikram Choudhury founded the popular Bikram (or hot yoga) in the 1970s. A former student accused Bikram of raping her in 2010. As Bikram’s legal counsel was looking into that rape accusation, she alleges that Bikram
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You Can’t Keep it Bottled Up: Defective Bottle Cap = Defective Bottled Product

The Appeals Court of Massachusetts held that a first-party property policy’s ensuing loss provision did not restore coverage for the non-defective contents of a bottle rendered unsaleable by defective bottle caps.  Since the product contained in the bottle could not be separated from the defective bottle cap, the whole product was defective and excluded from coverage. In 2008, a manufacturer entered into an agreement with a company to manufacture a milk-based shelf-stable protein drink designed to require refrigeration only after
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Below Limit Settlement Obliterates Excess Coverage

In Martin Resource Management Corporation v. AXIS Insurance Company, an excess insurer was held by the United States Court of Appeals for the Fifth Circuit to have no obligation to indemnify its insured under the terms of its excess insurance policy after the insured settled with its primary insurer for an amount below the primary policy limits. The insured had sought coverage from both its primary and excess policies for the cost of defending underlying litigation in Texas state court.
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Logical Construction: Federal Court Relies on Practical Considerations in Finding No Coverage for Lost Future Earnings

In 3M Co. v. National Union Fire Insurance Co., 2015 U.S. Dist. LEXIS 131197 (D. Minn., September 28, 2015) a federal judge for the District of Minnesota determined that a policyholder was not entitled to coverage for earnings on its investment in a trading company engaged in a Ponzi scheme because it did not own the earnings. The policyholder invested its employee-benefit plan assets in the trading company. The investment took the form of a limited partnership in the trading
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Insurer Required to Pay Policyholder Attorneys’ Fees Despite Policyholder Misrepresentations

The Florida Third District Court of Appeal found that an insurer was required to pay attorney fees that homeowners incurred during a coverage dispute despite a finding that the policyholders committed fraud. The Third District affirmed the lower court’s decision, finding that the insurer was required to pay the policyholders’ attorneys’ fees because the insurer lost its counter-claim against the policyholders. The court found that there was no exception for fraud. In Citizens Property Insurance Corp. v. Bascuas, (Third District
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One Detached Dump Truck, Three Occurrences: The “Unfortunate Event” Test in New York

One of the key issues in many insurance disputes is the number of “occurrences,” which are presented by a particular set of facts relating to a claim submitted by the policy holder. In its recent decision of Nat’l Liab. & Fire Ins. Co. v. Itzkowitz, the Second Circuit was called upon to determine whether the events surrounding an incident on the highway involving three separate vehicles were part of one single occurrence under New York law. The events surrounding this
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Keeping Up with the Times: Nevada Supreme Court Declares Under What Circumstances Insurers Must Provide Independent Counsel

In an opinion issued on September 24, 2015, the Nevada Supreme Court addressed the issue of under what circumstances an insurer is obligated to provide its insured with independent counsel. The case, State Farm Mut. Auto. Ins. Co. v. Hansen, arises out of injuries sustained by Hansen while attempting to leave a house party. A number of guests at the party were crowding around and sitting on Hansen and his companions’ vehicle in an attempt to prevent them from leaving.
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A Different Track: Mississippi Supreme Court Affirms Voiding of Auto Policy for Failure to Disclose 16-Year Old Son

Contrary to many states, which are reluctant to void automobile policies, the Mississippi Supreme Court in Jones v. Safeway Insurance Company, Case No. 2014-CA-00180-SCT, 2015 Miss. ELXIS 456 (Sept. 3, 2015), upheld the voiding of an automobile liability policy because the named insured failed to disclose her 16-year old son. In a win for insurers, it held that auto policies should be treated as any other insurance contract. The relevant facts are as follows: Michelle Busby applied for and obtained
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Entrust Me, Man: Landlord’s Due Diligence in Screening Tenant Results in Application of “Entrustment Exclusion” For First-Party Claim Arising Out Of Marijuana Operation

In United States Specialty Insurance Co. v. Barry Inn Realty, Inc., 2015 U.S. Dist. LEXIS 119450 (SDNY September 8, 2015), a federal judge for the Southern District of New York granted a commercial property insurer summary judgment finding no coverage for a claim of extensive property damage caused by a marijuana-growing operation conducted by the policyholder’s tenant. The policyholder leased the subject premises to the tenant for the purposes of operating a bar/restaurant. Prior to executing the lease, the policyholder
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Feels like a Fraud: Fifth Circuit Rules in Favor of Insurer; Awards $6M in Fraudulent Claims Case

In Allstate Insurance Company et al. v. Michael Kent Plambeck, DC, et al. United States Court of Appeals for the Fifth Circuit, September 17, 2015, an insurer was awarded a $6 million verdict against a group of chiropractors, lawyers and telemarketers that coerced individuals into making fraudulent claims against the insurer. The District Court awarded the verdict based on the Racketeer Influenced and Corrupt Organizations Act (RICO). On September 17, 2015, the Fifth Circuit Court upheld the verdict. The insurer
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Request Denied: Constitutionality Challenge of the No-Fault Automobile Insurance Act (NFAIA) Overruled in Minnesota

The No-Fault Automobile Insurance Act’s mandatory arbitration requirement of claims for $10,000 or less is now confirmed to be constitutional, according to the judgment delivered recently by the Court of Appeals of Minnesota in Unger v. AAA Ins. Co., No. A14-1885 (Minn. Ct. App. Aug. 10, 2015). Ruth and Amanda Unger were injured in a car accident after which they received chiropractic care and physical therapy. A few months later, however, AAA Insurance Company seized payment of on-going benefits and
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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
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New Law and a New Trial: Eleventh Circuit Overturns Florida Court Judgment Against GEICO in Bad Faith Lawsuit

On Wednesday, August 19, 2015 the Eleventh Circuit issued a significant ruling that allows evidence to be introduced at trial regarding previous decisions in that litigation, as well as changes in coverage law. In doing so, it vacated a $5 million bad faith judgment against GEICO General Insurance Co. (GEICO) from the U.S. District Court for the Southern District of Florida. The lawsuit arises out of an automobile accident that occurred in 2006. The plaintiff represented the estate of a
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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
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Earth, Wind, and Water: New York Court Enforces Anti-Concurrency Clause In Superstorm Sandy Case

In Clarke v. Travco Insurance Company, 2015 U.S. Dist. LEXIS 104267 (SDNY, August 7, 2015), a federal judge sitting for the United States District Court, Southern District of New York granted a homeowners insurer summary judgment in a dispute with its policyholder regarding coverage for a Superstorm Sandy claim. The homeowner was insured for first-party property damage to his home pursuant to a standard homeowners policy. His home, located near the Hudson River, sustained damage as a result of flood
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GAO Statement Highlights Deficiencies in Federal Exchange Enrollment Process

On July 16, 2015, the Government Accountability Office issued a written statement entitled “Patient Protection and Affordable Care Act: Observations of 18 Undercover Tests of Enrollment Controls for Health-Care Coverage and Consumer Subsidies Provided under the Act.” This statement contained the findings of “undercover testing of the [Exchange] application, enrollment, and eligibility verification controls using 18 fictitious identities” that GAO submitted or attempted to submit through the Exchange in several states in a variety of ways. Testing began in January
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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
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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
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New York Appellate Division Finds No Coverage Under Bond For Losses Arising From Madoff’s Ponzi Scheme

In Jacobson Family Investments, Inc. v. Nation Union Fire Insurance Co. of Pittsburgh, PA, 2015 N.Y. App. Div. LEXIS 5175 (1st Dep’t; June 18, 2015), the New York Appellate Division, First Department reversed the Supreme Court, New York County’s decision and found that National Union Fire Insurance Company of Pittsburgh, PA is not required to pay the claimant for losses arising out of Bernie Madoff’s infamous Ponzi Scheme. National Union provides coverage to the insured pursuant to a Financial Institute
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Bad Faith Decision Vacated as Insurer Not Responsible for Punitive Damages Where Insurance for Punitive Damages is Prohibited

In Jared Wolfe v. Allstate Property & Casualty Insurance Company, the insurer brought an appeal to the Third Circuit seeking to vacate a jury award against it for bad faith and breach of contract asserted by a plaintiff who was injured in a motor vehicle accident caused by the policyholder of the insurer. The Third Circuit agreed with the insurer and vacated the award, finding that the lower court made a mistake in allowing the plaintiff to introduce evidence of
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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
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D.C. Circuit Appeals Court to IRS: Hands Off Wholly Foreign Retrocession Agreements

In Validus Reinsurance Ltd. v. United States of America, the D.C. Circuit Court of Appeals decided whether 26 U.S.C. § 4371, which taxes premiums on certain reinsurance policies issued by foreign reinsurers, applies where the reinsurance contract is between two wholly foreign entities. Validus Reinsurance is a Bermuda-domiciled company located in Bermuda that provides reinsurance for companies either incorporated in the United States or doing business in the U.S. It also purchases retrocession contracts from wholly foreign entities to cover
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Total Frat Move: Eastern District of Arkansas Holds CGL Policy’s Exclusions Preclude Coverage for Injuries Arising Out of Hazing

In Admiral Insurance Co. v. Bradley, 2015 U.S. Dist. LEXIS 70490 (E.D. Ark., June 1, 2015) a federal judge sitting in the U.S. District Court for the Eastern District Court addressed whether a fraternity and individual fraternity members were entitled to coverage under a standard CGL policy for injuries sustained by a pledge of the fraternity on the night of his initiation. The underlying claimant alleged that he was caned, paddled, and hit by the fraternity’s members, resulting in his being
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Policyholder Required to Pay Back Insurer $900,000 Based on Misrepresentations

A Texas appellate court upheld a substantial jury award against a policyholder on fraud claims in Jackson Fulgham v. Allied Property and Casualty Ins. Co.. The insurer counter-sued the policyholder real estate firm over fraudulent claims it had made about hailstorm damage, resulting in a $900,000 jury award in favor of the insurer. The appellate court upheld the verdict claiming that the evidence supported such finding. In 2009, the policyholder made a claim under its property insurance policy for damage to the
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Tracking the Uncertainty of the 2016 ACA Health Insurance Rates

Health insurers have begun submitting their proposals for approval of next year’s health insurance rates. For hundreds of Affordable Care Act (ACA) plans, the proposed rates are up by more than 10 percent with insurers seeking increases of upwards of 49 percent for some products. Insurers have cited to increases in drug costs and the receipt of more accurate data on their insureds in support of the proposed rates. Between now and October 2015, when the final rates are published,
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No Sanctions for Policyholder Discovery Abuses

An insurer brought a claim for sanctions in dismissing a property owner’s lawsuit over coverage for damage from Hurricane Ike over discovery abuses. The insurer sought what is commonly known in Texas as “death-penalty” sanctions over the discovery abuses. The lower court had granted the sanctions, but this court found that the trial court had imposed excessive sanctions when it dismissed the plaintiff’s pleadings against the insurer and claims adjuster. This court determined that, while the purported discovery sanctions may
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Senate Panel to Probe Eligibility Verification Process for ACA Subsidies

The Senate’s Permanent Subcommittee on Investigations (PSI) has launched an inquiry into government subsidies under the Affordable Care Act available primarily in the form of advance premium tax credits. According to PSI’s letter to Secretary Burwell, the premium subsidies for last year were approximately $15 billion and are expected to reach $849 billion over the next ten years. Prompting the inquiry are concerns of improper over-payments with the goal of preventing government waste. According to the letter, “to ensure proper oversight,
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Indiana Supreme Court Finds Insured Afforded Coverage For “Professional Services”

In Wellpoint, Inc. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 49S05-1404-PL-244 (Ind. Apr. 22, 2015) the Indiana Supreme Court reversed the trial court and granted summary judgment for Anthem, Inc.against numerous reinsurers (Excess Reinsurers), finding that Anthem was afforded coverage in the underlying litigation under the reinsurance policies. Anthem, a large managed health care organization, was self-insured for E&O liability. It purchased policies from other insurers to reinsure its E&O liabilities. The underlying litigation consisted of several
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Connecticut Supreme Court Makes Significant Ruling in Data Breach Case

The Connecticut Supreme Court made a very significant ruling yesterday in Recall Total Information Management, Inc. v. Federal Insurance Co., adopting wholesale the Appellate Court’s well-reasoned ruling that an insured’s loss of sensitive records, without more, does not constitute a “publication” of material that violates a person’s right of privacy. Notably, the Appellate Court held that absent proof of an unauthorized third party’s access to the personal identification information, the “publication” element of the Privacy Offense (under the definition of
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Trial Court Judge Erred in Requiring Insurer to Produce Claim Files in Bad Faith Lawsuit

The South Dakota Supreme Court found that an insurer did not waive its attorney-client privilege and, thus, was not required to produce 200 unredacted workers’ compensation claim files in a bad faith lawsuit. The Supreme Court found that the trial court judge erred in allowing the evidence in by not conducting an in camera inspection of the files before finding that the insurer had implicitly waived its attorney-client privilege regard its claim files. This case involved a policyholder that sued
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What’s That Smell? Supreme Court of New Hampshire Holds That Cat Urine Odor Constitutes First-Party Property Damage

In Mellen v. Northern Security Insurance Co., Inc., 2015 WL 1869572 (N.H. April 24, 2015), the Supreme Court of New Hampshire issued a declaratory judgment that a homeowners policyholder was entitled to first-party coverage for cat urine odor. The court further held that coverage was not barred by the pollution exclusion. The policyholders leased an apartment unit, but the tenant moved out in the middle of the lease term due to cat urine odor from the policyholders’ downstairs neighbor. After
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Eleventh Circuit Limits Court’s Consideration of Motion to Dismiss To the Complaint

In Twin City Fire Insurance Co. v. Hartman, Simons & Wood, LLP, 2015 U.S. App. LEXIS 6092 (11th Cir. Apr. 15, 2015), the U.S Court of Appeals for the Eleventh Circuit reversed a lower court ruling and held that a professional liability insurer was not barred from recovering some, or all, of a $10 million settlement it paid on behalf of its insured due to the affirmative defenses of waiver and voluntary payment. Twin City Fire Insurance Company (Twin City)
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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,
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Lead Paint is Not an Excluded Pollutant in CGL Pollution Exclusion

In a personal injury action involving ingestion of lead-based paint in the house the claimant rented from the insured, the majority of the First Division Georgia Court of Appeals held that a policy’s pollution exclusion does not bar coverage for underlying personal injury claims, because lead-based paint was not specifically listed as a pollutant in the policy. Therefore, the exclusion did not exclude coverage for injuries arising out of the ingestion or inhalation of lead-based paint. This decision reversed the
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