LexisNexis Insurance: Insurance

James Veach on Union Indemnity's Belated Distribution: Tumult on the way to a First Partial Payment

James Veach — Wed, 07 May 2008 19:50:33 GMT

The mid-1980s were the golden age of insurance insolvency. The current sub-prime meltdown and the agonies at mono-line insurers MBIA and Ambac scare a lot of people about the consequences of slipping from a AAA to a AA rating. But the 1980s, on the other hand, saw dozens of insurers and several large carriers writing business in all fifty states go down like duck pins. These failures stressed guaranty fun

Mark B. Seiger and Jeffrey L. Kingsley on Panasia Estates v. Hudson Insurance Company and Bi-Economy Market v. Harleysville: New York's New Standard With Respect to First-Party Bad Faith Claims

Mark B. Seiger and Jeffrey L. Kingsley of Goldberg — Wed, 07 May 2008 19:13:07 GMT

Previously, New York’s highest Court did not recognize an independent tort cause of action for an insurer’s alleged failure to perform its contractual obligation under an insurance contract. New York’s seminal case for that proposition, Rocanova v. Equitable Life Insurance Society, was routinely followed. The lone rogue case which provided a pathway for insureds to receive greater protection was the First

Douglas R. Richmond on Excess Versus Primary Insurers: The Bad Faith Battle

Douglas R. Richmond — Wed, 07 May 2008 16:10:36 GMT

Business and individuals alike commonly purchase excess insurance and umbrella policies as protection against potentially catastrophic liability. In cases where judgments implicate such policies, disputes often arise between the excess carrier and the primary insurer.

The American capitalist economy is founded, at least in part, upon the freedom of firms and individuals to bind themselves to legal contracts without significant interference from outsiders, particularly the government. The freedom to contract does not exist within a vacuum, however. For example, should a purported employer be able to subdivide its business, hire out important core elements of its operation to

Barry Zalma on Bad Faith: Time to Put A Stake Through the Heart of the Tort of Bad Faith

Barry Zalma — Tue, 06 May 2008 16:45:09 GMT

US law was first organized based on English Common law. When a contract was breached only contract damages could be recovered. Tort damages were limited to tortious conduct and the two categories of damages were mutually exclusive.

Sonnenschein, Nath & Rosenthal, LLP on Wade v. Emcasco Insurance Co: Tenth Circuit Provides Insurers With a New Way To Defend Against Bad Faith Set-Ups

William T. Barker — Fri, 25 Apr 2008 20:02:48 GMT

Plaintiffs with claims exceeding defendants’ insurance policy limits have long sought to remove those limits by setting up the insurer for bad faith claims. A common method has involved making time-limited settlement demands while withholding information important to settlement evaluation. An insurer could argue that its conduct was reasonable in light of the information available to it but could not directly attack t

Carrie Cope on Shielding Insurers from Bad Faith in Settlement Negotiations: The Changing Need for the White Waiver

Carrie Cope — Fri, 25 Apr 2008 19:55:58 GMT

A white waiver protects an insurer against allegations from insured that a settlement offer was made in bad faith. California legislation enacted subsequent to the court opinion, out of which the white waiver arose, appears to obviate the need to for a white waiver for settlement negotiations during mediation but courts have not yet addressed how far that protection extends. In this expert commentary, insur

Jeffrey W. Stempel on the Bi Economy Market and Panasia Estates cases: New York Embraces Consequential Damages as a Remedy in Insurance Bad Faith Claims

Jeffrey W. Stempel — Fri, 25 Apr 2008 19:35:11 GMT

In a pair of recent decisions, the New York Court of Appeals, normally a court embraced by insurers (New York law is frequently the choice of insurers in drafting dispute resolution and choice-of-law clauses in policies), ruled that under apt circumstances, policyholders may seek not only payment of policy proceeds from insurers but also pursue consequential damages in cases where the insurer has acted in bad faith toward the policyh

Douglas R. Richmond on Developments in Bad Faith: Time-Restricted Settlement Offers

Douglas R. Richmond — Fri, 25 Apr 2008 14:42:55 GMT

A wide variety of allegations of bad faith permeate insurance litigation. A common scenario involves an allegation by the policyholder or the policyholder’s assignee that the liability insurer unreasonably failed to settle a claim against the policyholder within its policy limits. This exposes the policyholder, and in turn, the insurer, to excess liability.

Sonnenschein, Nath & Rosenthal LLP on Earthquake Insurance Coverage: Then and Now

Cynthia L. Mellema and Jeffry Butler — Mon, 07 Apr 2008 14:58:12 GMT

While earthquakes and earthquake insurance are primarily matters of concern in California, there have been earthquakes in 46 states since 1975 and insurers underwrite earthquake policies in all 50 states. The California experience with earthquake insurance is therefore potentially important well beyond that state’s borders. In their commentary, Cynthia Mellema, Jeff Butler and Norman Lau of Sonnenschein Nath & Rosenthal LLP:

Darren A. Lossia and Charles W. Browning — Mon, 31 Mar 2008 20:58:34 GMT

Darren A. Lossia and Charles W. Browning of the law firm of Plunkett Clooney here analyze a key decision among the many insurance coverage cases that have followed in the wake of hurricane Katrina. A recent unanimous decision by the Fifth Circuit interpreted the application of flood exclusion language contained in various homeowner’s, renter’s and commercial property insurance policies as unambiguously excluding floo

Richard Lewis & Marshall Gilinsky on Business Income Coverage in the Post 9/11 World: How Insurance Companies Have Changed the Claims Handling Playbook Since 9/11 and Hurricane Katrina

Richard Lewis and Marshall Gilinsky — Mon, 31 Mar 2008 14:50:19 GMT

Richard Lewis and Marshall Gilinsky have provided an important commentary on the substantial shifts in the way business income interruption insurance claims have been handled as a result of the events of 9/11 and Hurricane Katrina. Prior to those events, business income and other time element insurance claims typically were resolved by negotiation or appraisal. But those cataclysmic events have set loose a torrent

Jeffrey E. Thomas on Emerging Issues for Terrorism Insurance

Jeffrey E Thomas — Fri, 21 Mar 2008 22:01:01 GMT

The federal Terrorism Risk Insurance Program Reauthorization Act of 2007 became law on December 26, 2007. It extended the Terrorism Risk Insurance Act (“TRIA”) through the end of 2014 and made other changes to the Act. In this commentary, Associate Dean Jeffrey E. Thomas of the University of Missouri-Kansas City School of Law sets forth the basic principles and provisions of TRIA and the changes that were enacted in the 2005 and 2007 extensions of the Act.

An Interview with David Rossmiller on the Impact of Hurricane Katrina on Insurance Law and an Update on Recent Developments

David P. Rossmiller — Fri, 21 Mar 2008 20:55:55 GMT

After the shock of having their properties devastated by Hurricane Katrina, Gulf Coast residents were in for a another shock. The homeowner’s and commercial property insurance policies they depended on for recovery contained exclusions and limitations resulting in coverage denials and small payouts. Policyholders are challenging the insurers’ interpretations of their policies in court, some alleging fraud and bad faith. Governments are proposing new laws and regulations aim

Carrie Cope on Storm Clouds on the Horizon: A New Assessment Raises Concerns for Some Florida Insurers

Carrie Cope — Fri, 21 Mar 2008 18:31:50 GMT

Some Florida insurers are facing new assessments in the event the Citizens Property Insurance Corporation sustains a budget shortfall in the coming years. This is the result of the Florida State Legislature’s expansion of Florida Statute § 627.351, to apply to al

Lee H. Shidlofsky on Excess Underwriters v. Frank's Casing: The Right of Reimbursement in Texas

Lee Shidlofsky — Fri, 21 Mar 2008 16:58:29 GMT

One pressing issue in insurance law is the extent, if any, to which an insurer has the right to seek reimbursement from its insured of defense costs and/or indemnity payments when it ultimately is determined that no coverage exists. On February 1, 2008, after a long wait, a divided Supreme Court of Texas reversed its earlier decision and concluded that no such right exists in In November, 2001, China was approved as a full member of the World Trade Organization (WTO). As part of its acceptance into the WTO, China agreed to adopt measures to better define and regulate practices within the insurance industry. To fulfill these requirements, China has revised and adopted several insurance-related laws, regulations, and guidelines. The most recent of these was issued on September 7, 2007 when th

Daniel W. Gerber & Jeffrey L. Kingsley on Legal Developments in the Life Insurance Settlement Industry

Dan Gerber and Jeff Kingsley of Goldberg Segalla — Mon, 10 Mar 2008 22:20:54 GMT

The idea of selling the proceeds of one’s own life insurance policy to another may at first glance appear to be outside the scope of traditional insurance practices, but recently a growing number of policyholders have embarked on this process in an attempt to find additional sources of income as medical costs continue to rise. Unfortunately, the transaction process is not an easy one as the industry is largely unregulated. Courts, state regulators and even insurance companies themselv

Douglas R. Richmond on Defense Lawyers' Malpractice Liability to Excess Insurers

Douglas R. Richmond — Mon, 10 Mar 2008 22:05:11 GMT

Liability insurers appoint defense counsel to represent their policyholders. If a case turns out badly, the defense lawyer’s conduct may be unfavorably scrutinized. Malpractice claims by insurance companies against defense attorneys are now common. While primary insurers’ right to sue defense counsel for malpractice is well-settled, however, excess insurers are increasingly suing defense counsel when verdicts exceed primary policy limits. These suits raise a

Vernon R. Sumwalt on the Physician-Patient Privilege in Workers' Compensation Cases Since the Enactment of N.C. Gen. Stat. § 97-25.6

Vernon R Sumwalt — Mon, 10 Mar 2008 21:29:24 GMT

For years, many appellate decisions in North Carolina have looked at the propriety of communications between parties and medical providers during litigation. Popularized by the medical malpractice case of Crist v. Moffatt, 326 N.C. 326, 389 S.E.2d 41 (1990), the physician-patient privilege has become one of the most litigated evidentiary issues in workers&rsq

Kathleen Havener on the Greening of the Insurance Industry

Kathleen Havener — Mon, 10 Mar 2008 20:50:30 GMT

Insurers are realizing the many benefits of “green buildings”—structures that are built or renovated to be energy-efficient and disaster-resistant as well as protective of indoor-air quality and the environment. Thus, there are now:

California workers' compensation professionals are dealing with the changes mandated by SB899 that have been further modified or clarified (to a degree) by the Escobedo decision [Escobedo v. Marshalls, CNA Insurance Co., 70 Cal. Comp. Cases 604, WCAB en banc, April 19, 2005]. This expert commentary, written by Claude S. Munday, Ph.D., focuses on the key tenets of the Escobedo decision, an

Stephen C. Embry on Managed Care Is No Care: Connecticut's Medical Fee Schedule and the Medicare Resource Based Relative Value Scale

Stephen C Embry — Fri, 29 Feb 2008 00:29:05 GMT

Connecticut recently joined a growing list of states that use Medicare Resource Based Relative Value Scales (RBRVS) for setting medical fees in workers' compensation cases. [Conn. Gen. Stat. § 31-280] If experience with other states is of any value in predicting the future, workers in

Lee H. Shidlofsky on the Notice-Prejudice Rule: PAJ, Inc. v. Hanover and XL Specialty v. Financial Industries Corp.

Lee Shidlofsky — Thu, 28 Feb 2008 20:05:33 GMT

In Texas Calculus, does PAJ + XL = Prejudice? Recent action by the Supreme Court of Texas may provide the answers. The notice-prejudice rule is a nationwide trend whereby an insurer is sometimes forced to prove that it was prejudiced by an insured’s failure to timely notify it of a claim or lawsuit before the insurer can preclude coverage. On January 11, 2008, the Supreme Court of Texas issued an opinion on the matter in PAJ,

Matthew R. Wildermuth's "Repercussions of the Subprime Mortgage Crisis for the Insurance Industry: Who's Suing Whom and Who Has Coverage for What? Part I of III (CGL Policies)

Matthew R. Wildermuth — Thu, 21 Feb 2008 12:20:04 GMT

The tentacles of the current “subprime mortgage crisis” are destined to reach into every corner of financial institutions in the United States and abroad, including components of the insurance industry. In a three-part series, insurance coverage litigation expert Matthew R. Wildermuth, Esq. explores the extent to which the claims arising out of this crisis ─ and the current attempts to “cure” these p

Robert G. Rassp on Five of the Most Controversial Issues in AMA Guides and California Workers' Compensation Cases

Robert G Rassp — Mon, 11 Feb 2008 18:45:22 GMT

In order to get an accurate permanent disability rating for an injured worker in the California workers' compensation system, counsel needs to develop the record in all AMA Guides cases by reading the instructions in the AMA Guides and making sure physicians applied the descriptions and measurements in the Guides properly and consistently with those instructions and with the 2005 Permanent Disability Rating Sched

Jim Poolman discusses the suitability of annuity sales and the National Association of Insurance Commissioners' Suitability in Annuity Transactions Model Act

Jim Poolman — Mon, 11 Feb 2008 18:43:11 GMT

Former North Dakota Insurance Commissioner Jim Poolman draws upon his experience as Chairman of the National Association of Insurance Commissioner’s Life Insurance and Annuities Committee to provide a unique perspective on the NAIC’s Suitability in Annuity Transactions Model Act. Former Commissioner Poolman discusses the difficulties regulators have experienced in reaching a consensus on issues relating to suitability, th

Thomas A. Robinson on Recent Workers' Compensation Cases Involving Retaliatory Discharge Claims: Wrongful Demotion; Discharge As Not a "Change in Condition"

Thomas A. Robinson — Mon, 11 Feb 2008 18:41:29 GMT

Under the "at-will" employment doctrine en force within a number of states, an employer may terminate an employee for good reason, for bad reason, or for no reason at all (proponents of the rule would counter that within these jurisdictions employees may leave one place of employment for another without notice). A number of states, either by judicial decision or legislative action, have carved out exceptions to this at-will

Lee H. Shidlofsky on Additional Insured Status in Strict Eight Corners States: The Possible Impact of D.R. Horton-Texas, Ltd. v. Markel Int'l Ins. Co.

Lee Shidlofsky — Mon, 11 Feb 2008 18:37:55 GMT

Insurance coverage can oftentimes be won or lost depending on whether a particular jurisdiction follows a strict “eight corners” analysis for determining the duty to defend or permits the introduction of extrinsic evidence. This issue is particularly relevant in the additional insured context.

In th

Dan D. Kohane on Guishard v. General Security Insurance Company

Dan D. Kohane — Mon, 11 Feb 2008 18:31:39 GMT

When is an accident involving an automobile not an “automobile accident” for the purposes of liability insurance coverage? Often, the practitioner needs to know whether the automobile liability carrier or a general liability insurer has the obligation to defend and indemnify a motor vehicle owner. The Court of Appeals discussed this issue in Guishard v. General Security Insurance Companywhen an injury occurred d

Jim Poolman on North Dakota's newly enacted statute related to suitability in annuity transactions with all consumers

Jim Poolman — Tue, 29 Jan 2008 18:52:18 GMT

Annuities are becoming more and more popular as financial planning tools for consumers of all ages. With the products becoming more complex, regulators across the country are giving these products increased scrutiny.

Consumer complaints are also on the rise becaus

Scott N. Godes on the New York Appellate Division's Recent Decision Rejecting Allocation to the Policyholder for Latent Injury Claims: State of New York Insurance Department Liquidation Bureau v. Generali Insurance Company

Scott Godes — Tue, 29 Jan 2008 18:42:59 GMT

A recent New York Appellate Division decision is a breath of fresh air for policyholders. In State of New York Insurance Department Liquidation Bureau v. Generali Insurance Co., the Appellate Division, First Department, found that insurance companies had to cover all shares of defense and settlement costs related to lead paint claims, and could not pro-rate the costs to the policyholder, even when there were significant periods of time in which the po

Daniel Gerber and Kimberly Whistler on the broad duty to defend potentially becoming broader by including uninsured years and considerations of Federal Court Jurisdiction

Dan Gerber — Tue, 29 Jan 2008 18:24:39 GMT

One of the fundamental principles recognized in New York regarding insurance coverage is that the duty to defend is greater than the duty to indemnify. The First Department recently expanded this already broad rule by holding insurers, who may have only provided coverage for a small percentage of time, will ultimately be found to cover years the insured did not otherwise have insurance. Moreover, the insured may avoid contr

Carrie Cope on Ryan v. Gifford: Delaware Delivers an Unexpected Setback to Backdating Defendants by Allowing Companies' Internal Investigations to Be Discoverable

Carrie Cope — Tue, 29 Jan 2008 17:50:40 GMT

Until now, the only substantive stock options backdating decisions have addressed motions to dismiss based on demand futility. This left open a key question: how would courts react to discovery disputes in the backdating context?

Physicians see devastating psychological, medical, social, and economic effects caused by unnecessarily prolonged work disability and loss of employability. They also see wasted human and financial resources and lost productivity. The physicians who developed the American College of Occupational & Environmental Medicine (ACOEM) work disability prevention guideline know that many missed work day