Cases Cited in Goldberg Segalla’s Reinsurance Review – June 2009 Edition

Supreme Court Decision – Download Andersen.v.Carlisle Tenth Circuit Decision – Download Mid-Continent v. General Re Eighth Circuit Decision – Download In re Acceptance Insurance Co. Third Circuit Decision – Download Swiss Reinsurance v. Airport Northern District of California Decision - Download The Flintkote Co. v. General Accident Assurance Co. Eastern District of Louisana Decision  - Download Imperial Trading Co. v. Travelers Supreme Court of Ohio Decision  - Download Olympic Holding Co. v. ACE Limited Supreme Court of New Hampshire Decision  -
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Recent Insurance Related Legislation

California Senate Bill 119 (Introduced Feb. 2, 2009, Last Action May 5, 2009) This bill deletes the expiration date for existing law that prohibits the bringing of an action for statements made in bad faith against an insurer issuing professional liability insurance policies to health care providers unless the statement was made under a specified circumstance. Connecticut Senate Bill 212 (Introduced Jan. 21, 2009, Last Action May 5, 2009) This bill prohibits the cancellation fee for certain automobile liability insurance
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High Court Reasons that Global Umbrella Policy Does Not Drop Down

Flexsys America LP v XL Insurance Company Ltd [2009] EWHC 1115 (Comm) (20 May 2009) The policyholder maintained that it exhausted its $1M limits under a primary policy issued by XL in Ohio. It then claimed tan XL global policy, with limits of $25M and subject to U.K. law, should apply to cover remaining expenses and claims. The court found that the "drop down" of excess policy was subject to a determination of whether the primary policy would apply to the particular
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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
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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  http://www.goldbergsegalla.com/attorneys/Appler.html http://www.goldbergsegalla.com/attorneys/Cohen.html
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Tenth Circuit Reversed District Court’s Ruling and Found The Arbitration Clause in The Reinsurance Agreement Enforceable

MID-CONTINENT CASUALTY CO. V. GENERAL REINSURANCE CO. (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 
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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)

ARTHUR ANDERSEN LLP V. WAYNE CARLISLE (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
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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
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