District Court Holds That Sworn Statements Are Not Covered By Lloyd’s E&O Policy

On July 27, U.S. District Judge Michael Mills for the Northern District of Mississippi held that Lloyd’s of London would not be required to defend Mid-Delta Insurance Agency, Inc. (MDIA) under an errors and omissions policy against claims that MDIA employee Randal Henson made misrepresentations to an insurer. Initially, MDIA and Henson filed suit in an attempt to force Lloyd’s and the United States Liability Insurance Co. to defend them against allegations that Henson misrepresented information on a client’s application
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New Insurance Agent and Broker Rules Regarding Disclosure of Contingent Commissions Which Take Effect in New York January 1, 2011

New insurance agent and broker disclosure rules regarding contingent commissions are scheduled to take effect in New York on January 1, 2011:  “NYCRR 30 (Regulation 194 Producer Compensation Transparency).  This regulation has spurred much debate in the insurance industry.  Terry Fleming, President of Risk and Insurance Management Society, stated in an opinion column in the September 6, 2010 edition of The National Underwriter that contingent commissions for insurance brokers cause “an inherent conflict of interest” and he defended the New
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Federal Judge Ends Insurer’s Effort to Recoup Money Paid to Insured

Houston Cas. Co. v. Sprint Nextel Corp., Case No. 09-CV-1387 (E.D.Va, November 22, 2010) This coverage dispute arose out of an underlying securities action. In 2004, Sprint discontinued one line of stock. The shareholders whose stock was converted filed a securities action accusing Sprint of undervaluing their stock. Eventually, a settlement was reached in the amount of $57.5 Million. At the time of the conversion, Sprint was insured under a number of D&O policies providing $100 Million in coverage, including
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California Court Affirms Judgment Against Insurance Agent HRH

Williams v. Hilb, Rogal & Hobbs Ins. Services of California, Inc. (Cal. App. September 9, 2009) Following a bench trial, an insurance agency was found liable for negligence in advising on, procuring and maintaining an insurance package for a new business venture that did not include worker’s compensation insurance.  The court held that although an insurance agent does not have a duty to volunteer to an insured that the latter should procure specific insurance coverage, the rule changes under certain
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