Renewal Premium Check Cashed After Expiry of First Policy Did Not Reinstate Prior Policy, But Formed New One

Hartland v. Progressive County Mutual Insurance CompanyUT ( Ct. App. Texas, April 23, 2009) The policyholder sent a renewal premium check after the policy expired.  The insurer accepted the check, and issued a revised renewal declarations page listing the date the check was received as the inception date of the renewed polcy. The policyholder argued that the acceptance of the check formed a contract under the terms of the original renewal policy, and coverage was uninterrupted.  Rejecting that argument, the
Continue reading...

Life Insurers Approved for Treasury Funds

At least four U.S. insurers won approval on Thursday to raise billions of dollars through the government's bank bailout plan, the U.S. Treasury Department said. Hartford Financial , the No. 4 U.S. insurer and beset by worries about capital, got preliminary approval to raise $3.4 billion via the Troubled Assets Relief Program, known as TARP. Three other insurers that also secured a greenlight included Prudential Financial Inc Lincoln National Corp., and the Principal Financial Group a Treasury spokesman said. The
Continue reading...

IRS Issues “Stranger Owned Life Insurance” Rules

The Internal Revenue Service (“IRS”) issued two Revenue Rulings on May 1, 2009, addressing certain tax aspects of sales and surrenders of life insurance policies: Rev. Rul. 2009-13 and Rev. Rul. 2009-14. These rulings resolve some longstanding questions regarding sales of life insurance policies and in many respects are consistent with life settlement industry expectations. www.irs.gov/pub/irs-drop/rr-09-13.pdf www.irs.gov/pub/irs-drop/rr-09-14.pdf By Daniel W. Gerber and Kimberly E. Whistler http://www.goldbergsegalla.com/attorneys/Gerber.html http://www.goldbergsegalla.com/attorneys/Whistler.html  
Continue reading...

Rectification of insurance policies

Dunlop Haywards (DHL) Ltd (2)  Erinaceous Commercial Property Services Ltd -v- Erinaceous Insurance Services Ltd and (1) Lockton Companies International Ltd (2) MSI Corporate Capital Ltd & Others, [2009] EWCA Civ 354.8 (April  28, 2009) The Court of Appeal considered the factual matters which may be taken into account by the courts in claims for rectification of insurance policies. The claimant insured alleged failure by the broker to arrange effective excess insurance coverage for the insured. An application was made by the defendant broker
Continue reading...

“Continuous Trigger” Theory Applies Separately to Each Policyholder

Franklin Mutual Ins. Co. v. Metropolitan Property & Casualty Ins. Co.. (N.J. App., April 17, 2009) A property insurer sought pro-rata reimbursement from a policyholder’s previous insurer following payment for environmental contamination from an underground heating oil tank.  The contamination occurred continuously during both policy’s effective periods as well as a period of ownership by previous owner.  The court held that, under New Jersey’s “continuous trigger” theory, the pro-rata formula is applied separately to each individual policyholder and not collectively
Continue reading...

Occurrence Determined by Cause of Injury, Rather Than Injury Itself

Budway Enterprises, Inc. v. Federal Ins. Co. (C.D. Cal., April 14, 2009) The plaintiff failed to allege facts showing there were two separate causes of theft resulting in loss of two aluminum shipments, with separate Bills of Lading and separate delivery numbers, loaded into two separate tractor-trailers.  Accordingly, the insurer did not breach the insurance contract by applying the $100,000 per occurrence policy limit.   By Richard J. Cohen and Carrie P. Appler   http://www.goldbergsegalla.com/attorneys/Cohen.html http://www.goldbergsegalla.com/attorneys/Appler.html      
Continue reading...

SOUTHERN DISTRICT OF NEW YORK ALLOWS CEDENT’S SUCCESSOR TO ASSERT NEW CAUSES OF ACTION INVOVLING DIFFERENT TRANSACTIONS AGAINST THE REINSURER

TIG INSURANCE CO. V. CENTURY INDEMNITY CO. (CIVIL ACTION NO.: 08-CV-7322, April 8, 2009) The cedent’s successor-in-interest filed this action against the reinsurer stating that the reinsurer breached the terms and conditions of several facultative reinsurance contracts. Specifically, the complaint alleges that the named reinsurance contracts specifically provided coverage to the cedent’s predecessor on a policy of excess liability insurance issued by the cedent’s predecessor to the insured. Upon settling the underlying action, cedent’s successor-in-interest is seeking coverage under the
Continue reading...

Bermuda Supreme Court Denies Validus’s Request – Clear Path to Closing of IPC Holdings/Max Capital Amalgamation

  IPC Holdings, Ltd. (Nasdaq:IPCR) (BSX:IPCR BH) issued the following statement regarding yesterday's decision by the Supreme Court of Bermuda Commercial Court not to grant Validus Holdings, Ltd.'s request for an expedited trial on the litigation brought by Validus against IPC and Max Capital Group Ltd. (Nasdaq:MXGL) (BSX:MXGL BH). "We are pleased with the Court's ruling. Despite Validus's efforts, the litigation, which we believe is without merit, will not be an impediment to closing our combination with Max and creating
Continue reading...

Carbon Monoxide Discharged from Furnance is “Pollutant” Released into Atmosphere

Nautilus Insurance Company v. Country Oaks Apartments, Ltd.  (Click on the Case Name for full decision) (5th Cir. ( Texas), April 22, 2009 The vent to a furnance was accidently blocked, causing the carbon monoxide that would otherwise have been discharged into the atmosphere to be dispersed into an apartment.  The carbon monoxide consistuted a “pollutant” within the meaning of the absolute pollution exclusion and its discharge from the furnance constituted discharge into the “atmosphere."   By Daniel W. Gerber
Continue reading...

Hiscox Announce Major Position Shift in US & London Markets

On April 20, 2009, Hiscox announced several group restructuring the United States and London markets. With respect to Hiscox USA, all business will be now run as a single operation with Richard Watson, former manager director of Hiscox’s Global Markets. Hiscox also announced that its London operation will focus exclusively in the London Market while Hiscox Global Markets division will now separate into the United States and London markets exclusively. By Jeffrey L. Kingsley http://www.goldbergsegalla.com/attorneys/Kingsley.html  
Continue reading...