Excess Insurer May Recoup Settlement Payments from the Primary Insurer

In RSUI Indemnity Co. v. American States Insurance Co., No. 14-30033, 2014 U.S. App. LEXIS 18407 (5th Cir. Sept. 25, 2014), the Fifth Circuit Court of Appeals held no adjudicated excess judgment is required for an excess insurer to recoup settlement payments from the primary insurer whose alleged bad faith failure to defend the common insured caused the excess settlement. In the underlying action arising from an automobile collision, counsel retained by the primary carrier, American States Insurance Co. (ASIC),
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Lack of Authentication of Assignment of Insurance Proceeds Costs Insured Party $1.2 Million

In Warehousing v. Auto-Owners Ins. Co., 2014 U.S. App. LEXIS 18058 (11th Cir. Sept 22, 2014), the U.S. Court of Appeals for the Eleventh Circuit affirmed a lower court ruling which held that an insured party’s failure to authenticate a document allegedly transferring the right to $1.2 million in insurance proceeds warranted a grant of summary judgment against it. Max Warehousing LLC owned a warehouse property insured by Auto-Owners Insurance Company that Max leased to third parties. Embassy National Bank
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‘Close Enough’ Disclosure During Claim Investigation Earns Homeowner Reversal of Coverage Denial Under Fire Policy

In Rose v. State Farm Fire & Cas. Co., 2014 U.S. App. LEXIS 17312 (6th Cir. Sept. 8, 2014), the Sixth Circuit Court of Appeals reversed and remanded a lower court ruling holding an insured was not entitled to coverage under a fire insurance policy because the he had provided false information regarding his financial status in the post-fire claim investigation. Richard Rose was an Ohio homeowner whose house burned down.  State Farm insured Rose through a homeowner’s policy.  That
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Higher Deductible Plans Are the New Black and Speaking of Enrollment . . .

With 2014 wrapping up, attention is quickly turning to the benefits enrollment period for 2015 including enrollment for health insurance.  A new survey out by Towers Watson, the National Business Group on Health, and PriceWaterhouseCoopers provides a glimpse into how employers are thinking about these benefits.  One conclusion is that, for health insurance, higher deductible plans are the new black. Since the passage of the Affordable Care Act (ACA), one of the big questions is what, if any, impact its
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Insured Settles for Less from Insurers, and Excess Coverage Still Must Indemnify: “Ultimate Net Loss Liability” Could Apply to Settlement Amounts with Lower Level Insurers

On Friday, August 29, 2014, the Eleventh Court of Appeals in Texas reversed the trial court’s summary judgment order finding that an excess insurance policy was triggered though the underlying policies had not exhausted their full coverage limit. Plantation Pipe Line Co. operates pipelines transporting petroleum throughout the southern and eastern United States.   In 1990, a leak was found in North Carolina, and Plantation was required to remediate the site. Plantation spent almost $12 million to clean and restore the
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Sixth Circuit: ‘Advertising Idea’ Must Involve ‘Plan, Scheme, or Design’ to Bring Public Attention; Standing Alone Customer List is Not a ‘Plan’

On Friday, August 15, The 6th Circuit Court of Appeals upheld an order from the Eastern District of Kentucky, granting Liberty Corporate Capital Limited’s declaratory judgment determining it has no duty to indemnify or defend the plaintiff firearms retailer. Security Safe Outlet (SSO), a firearms retailer in Kentucky, acquired BudsGunShop.com LLC’s (the website) customer information database through their employee, Matthew Denninghoff, who previously worked in IT for the website.  Denninghoff allegedly maintained a copy of the website’s customer database and
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Standing On Its Own: CT Supreme Court Expands Insurers’ Ability to Sue Another Insurer

In Travelers Casualty & Surety Co. of America v. The Netherlands Insurance Co., 2014 Conn. LEXIS 262, 312 Conn. 714 (Aug. 5, 2014), the Connecticut Supreme Court broadened an insurance company’s ability to sue another insurance company pursuant to the state’s declaratory judgment statute. The coverage dispute arose as follows.  Lombardo Brothers Mason Contractors was hired by the state of Connecticut to perform masonry for the construction of the law library for the University of Connecticut School of Law.  The
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Obama Administration Seeking Full D.C. Circuit Rehearing to Address Obamacare Circuit Split; Plaintiffs in Fourth Circuit Seek Cert from Supreme Court

On Friday, August 1, the Obama Administration filed its much anticipatedpetition for rehearing en banc with the D.C. Circuit in Halbig v. Burwell.  The petition asks for the full D.C. Circuit bench to reconsider and overturn the original ruling by the three judge panel based on a what the Administration has characterized as a misconstruction of the statutory language at issue. The D.C. Circuit’s three judge panel determined that the Affordable Care Act provision permitting subsidies unambiguously restricts its applicability
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NAIC Launches “Protecting the Future” to Highlight the Benefits of State-based Insurance Regulation and Issues RFP for Outside Consultant

On July 16, 2014, the National Association of Insurance Commissioners (NAIC) announced it was launching an educational initiative called “Protecting the Future” to educate the public and other insurance supervisory bodies on the benefits of the U.S. state-based system of insurance regulation.  This program is being “deployed in Washington, D.C.; Brussels, the capital of the European Union; and in Basel, Switzerland, the seat of the Financial Stability Board (FSB) for the G-20.” The announcement notes that “[o]f the 50 largest
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Eighth Circuit Keeps the Faith: Utmost Good Faith Admiralty Insurance Rule Cannot be Pre-empted

Thursday July 17, Judge Murphy of the Eighth Circuit concluded that the doctrine of utmost good faith is a judicially established federal admiralty rule, thus preempting the application of state laws. In February of 2011, The Mark Twain, a cement barge, sank to the bottom of the Mississippi River.  Just four months prior, its owner, Continental Cement Co, applied to Starr Indemnity & Liability for a marine insurance policy to cover all of its barges.  Continental, however, neglected to submit
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