Changes to New York State Insurance Law Affect Auto Policies, Neonatal Intensive Care Coverage, and Exposures for Mortgage Guaranty Insurers

Frederick J. Pomerantz, a partner in Goldberg Segalla’s Global Insurance Services and Insurance Regulatory Practice Groups, has authored three alerts on changes to New York State insurance regulations in the November 2017 edition of the Federation of Regulatory Counsel (FORC) Alerts. In the alerts, Fred details notable recent changes pertaining to private passenger auto policies, neonatal intensive care services, and exposures for mortgage guaranty insurers. Analysis of Non-Renewals of Private Passenger Auto Policies Effective October 23, 2017, Section 1, Paragraph
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New York Issues Final Cybersecurity Regulation

On February 13, 2017, the New York Department of Financial Services (NYDFS) adopted the final version of its first-of-its-kind cybersecurity regulation, “Cybersecurity Requirements For Financial Services Companies” (23 NYCRR 500). This regulation took effect on March 1, 2017. The final regulation reflects several of the comments offered during the final comment period that concluded on January 27, 2017. For a prior list of significant changes from the initial version to the second version, please see our blog post located here.
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Anticipated Decision in Heinz Rescission Litigation Upholds Ruling Voiding $25 Million Insurance Policy Due to Misrepresentations in the Application

In a much anticipated decision, the Third Circuit Court of Appeals upheld the rescission of H.J. Heinz Company’s $25 million production contamination insurance policy because Heinz made material misrepresentations concerning previous product contamination claims when it applied for the policy. H.J. Heinz Company v. Starr Surplus Lines Insurance Company, No. 16-1447 (3d Cir. Jan. 11, 2017). The fact that Heinz’s application misrepresented its history of prior contaminations losses was clear. The insurer’s application asked Heinz to disclose past complaints, recommendations,
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Comments on NYSDFS Cybersecurity Regulation Begin Pouring In

On September 28, 2016, the New York State Department of Financial Services (DFS) released for comment a proposed new regulation entitled Cybersecurity Requirements for Financial Services Companies (23 N.Y.C.R.R. Part 500). Various industry groups have offered comments and expressed concerns about some of its requirements. These concerns include the costs of compliance and the scope of entities regulated by the proposed rule. Among the organizations offering comments are the Excess Lines Association of New York (ELANY) and the American Association
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Must an Additional Insured Have a Written Contract With the Named Insured to Get Coverage? It Depends Which Court You Ask

There is a growing list of trial court decisions in New York where the courts disagree of whether an additional insured endorsement to an insurance policy requires a written contract between the additional insured and the policy’s named insured for additional insured status to apply. The U.S. District Court for the Southern District of New York recently held in Liberty Mutual Fire Insurance Company v. Zurich American Insurance Company that contractual privity with the named insured was not required. In
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New York Court Takes a Bite Out of Multiple Occurrences Argument

A New York Federal District Court recently held that an attack by two dogs upon two pedestrians constituted a single occurrence under the dog owners’ homeowners policy.  In so holding, the court rejected use of the “unfortunate events” test to determine the number of occurrences because the policy language required that all injuries arising from the same general conditions would be considered to be the result of one occurrence, regardless of the number of claimants.  As a result, the insurer’s
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NYDFS Notifies Federal Regulators of New Potential Cyber Security Regulations

On November 9, 2015, the New York State Department of Financial Services (NYDFS) sent a memorandum entitled Potential New NYDFS Cyber Security Regulation Requirements to several federal and state financial services regulators, including banking, securities and insurance regulatory, administrative and supervisory  bodies. These potential regulations are based on results of two sets of surveys of financial entities about their “cyber security programs, costs and future plans.” NYDFS surveyed 150 banks and 43 insurance companies. The results of the May 2014 banking
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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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Exceptional Circumstances are Required for Relief in a Claim for Bad Faith

In a favorable decision to insurers on the issue of bad faith, the New York Northern District was recently called upon to determine whether an insured under a Homeowner’s policy had stated a viable cause of action. In Ripka v. Safeco Ins., 2015 U.S. Dist. LEXIS 67595 (N.D.N.Y May 26, 2015), the District Court made it clear that New York courts will not, except in very limited circumstances, award tort and punitive damages in addition to contract damages against insurers who deny claims.
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Timing is Key in Determining Primary/Excess Obligations for Claims against Multiple Insureds

A recent Eleventh Circuit decision warns of the dangers in handling claims against multiple insureds. In Nova Casualty Co. v. OneBeacon America Insurance Co., (U.S. Ct. Apps., 11th Cir., Mar. 17, 2015) the district court for the Southern District of Florida granted summary judgment in favor of the primary insurer, finding that although it had breached its duty to defend and indemnify an additional insured in the underlying action, the excess insurer was not entitled to damages because the primary
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