The Insurance & Reinsurance Report

August 21, 2009 Reinsurance

Court Rules Reinsurer Cannot Set Aside Arbitration Agreement

TIG Insurance Company v. Global International Reinsurance Company (Southern District of New York, August 11, 2009)

Global International Reinsurance Company agreed to indemnify TIG Insurance Company for certain losses. TIG performed an internal audit for losses prior to 2003 to ensure claims were properly coded. Global did not object to the protocol employed by TIG.

The audit showed a number of claims were indeed miscoded. TIG represented to Global that the errors had been remedied. The parties entered into a settlement agreement that dismissed with …

August 20, 2009 Directors and Officers

Breach of Obligations Relating to Stock-Option Plan Are Not Covered Under Fiduciary Liability Policy

AT&T Corp. v. Certain Underwriters at Lloyd’s London (NJ App. August 3, 2009)

AT&T sought coverage under both primary and excess fiduciary liability policies for several suits against it relating to a stock-option plan. The suits alleged that AT&T breached its contractual obligations relating to stock options provided in its acquisition of a company. In addition to liabilities arising out of breach of a fiduciary duty, the policies provided coverage for negligent acts in the administration of certain employee-benefit plans. The …

August 19, 2009 Policy Conditions, Considerations, Construction, and Formation

NEW YORK APPELLATE COURT STATES THAT STRANGER TO POLICY HAS STANDING TO COMMENCE A DECLARATORY JUDGMENT ACTION WITHOUT NECESSITY OF JUDGMENT AGAINST INSURED

RLI INSURANCE COMPANY v. STEELY

(N.Y.A.D. 2^nd Dept., August 4, 2009)

An insured maintained a primary homeowner’s policy and a separate umbrella policy, issued by separate insurers. He was sued in connection with a boating accident. The primary homeowner’s insurer disclaimed, citing an exclusion relating to the insured’s ownership of the boat. The umbrella insurer sued, seeking a declaration that the exclusion was inapplicable and that its policy was excess. The primary homeowner’s insurer moved to dismiss, citing the umbrella …

August 18, 2009 Excess Insurance

Alabama Supreme Court Affirms Primary/Excess Ruling Of Competing Insurance Clauses

Colony Ins. Co. v. Georgia Pacific, LLC. et. al. (Supreme Court of Alabama, July 31, 2009)

Insurer appealed from a summary judgment in favor of defendant insurer (Lumbermens) and it insured (Georgia-Pacific), in a declaratory judgment action seeking a declaration that Lumbermens was required to defend and indemnify Georgia-Pacific in an underlying lawsuit arising out of the death of a subcontractor’s employee who was killed while working on the roof of the Georgia-Pacific facility. Colony claimed that the coverage provided under both the Colony policy …

August 14, 2009 Bad Faith and Extra-Contractual Liability

Fifth Circuit Increases Bad Faith Verdict to $22 Million Regarding Hurricane Katrina Claims

Robert Resources, LLC. v. United Fire and Casualty Company (Fifth Circuit, August 11, 2009)

The action originates from several property damage claims arising from Hurricane Katrina in 2005. The insured sued its insurer alleging that the insurer acted in bad faith by refusing to make any payments under its policy due to the insurer's own financial situation. Due to this financial pressure, the insured alleges that the insurer intentionally characterized the damage arose from flooding issues which was not covered under the policy. After a jury trial, …

August 14, 2009 CaseWatch

CaseWatch Insurance – A Bi-Weekly Update of Insurance Law Decisions and Legislation

For the latest edition of Goldberg Segalla's CaseWatch click here

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August 13, 2009 Bad Faith and Extra-Contractual Liability

New York Federal Court Adds Bite to the Bi-Economy Decision – Expands Recovery of Consequential Damages in Coverage Dispute

Chernish v. Massachusetts Mutual Life Insurance Company, (Case No: 5:08 CV 0957)

In 1987 Plaintiff Anne Chernish obtained a disability income insurance policy from defendant Massachusetts Mutual Life Insurance Company. In and around 1988, plaintiff allegedly became ill and filed a claim for benefits under the policy.

For reasons beyond the Court’s knowledge at the time of the decision, benefit payments were apparently stopped in 2001 and 2004. Despite plaintiff’s renewed request for benefits, the insurer did not disclaim coverage and had not …

August 13, 2009 Uncategorized

CaseWatch Cases for August 13, 2009 Edition

Download AA Acupuncture Service v. Safeco Ins. Co

Download Admiral Insurance Company v. Grace Industries

Download Bosetti v. United States Life Ins. Co. in the City of New York

Download Boston Gas v. Century Indemnity

Download Centennial Ins. Co. v. Patterson

Download Denise v. NYC Transit Authority

Download Economy Premier Ins. Co. v. Jackson

Download Essex Ins. Co. v. Professional Building Contractors, Inc.

Download Fortune v. Group LTD Plan for Employees of Keyspan

Download Galvn v. Provident Life and Accident Insurance Company

Download Great …

August 13, 2009 Arbitration

7th Circuit Affirms Arbitration Award Despite Substitution of Arbitrator

WellPoint, Inc. v. John Hancock Life Insurance Co.

(7^th Circuit, August 7, 2009)

Pursuant to an arbitration clause in the transaction agreement, two insurers were required to submit their dispute to an arbitration panel to determine their rights and obligations under the contract. Each insurer selected an arbitrator and a third one was selected by the American Arbitration Association as the “umpire” arbitrator. However, before the arbitration was set to begin, the arbitrator chosen by on one of the parities resigned.…

August 10, 2009 Legislative Update

Insurance Legislative Update for United States

California

Senate Bill 119

(Introduced Feb. 2, 2009, Last Action July 27, 2009-To Governor)

This bill extends the expiration date of existing law that prohibits the bringing of an action against an insurer in providing professional liability insurance policies to health care providers for statements made in bad faith unless the statement was made under a specified circumstance.

Massachusetts

House Bill 876

(Introduced Jan. 19, 2009, Last Action July 22, 2009-In Joint Committee)

This bill discourages uninsured motorists by limiting their bodily injury liability compensation.…