On 18 November 2011, Catlin Group Limited (Catlin) announced the formation of a strategic partnership with China Reinsurance (Group) Corporation (China Re), the biggest reinsurance company in China. read more
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On 13 December 2011, the eighth supplement (Supplement VIII) to the Closer Economic Partnership Arrangement (CEPA) between Hong Kong and Mainland China was signed, marking the latest enhancement of economic and trade cooperation between Hong Kong and the Mainland. read more
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Recent comments by a UK Commercial Court judge indicate that policyholders are entitled to "spike" their entire liability for a mesothelioma claim into any one year of employers' liability (EL) cover. Spiking potentially arises where the period of EL cover is shorter than the period of negligent exposure to asbestos. read more
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On December 28, 2011, the New Jersey Department of Banking and Insurance (the “Department”) issued Bulletin 11-31 (the “Bulletin”) revising standards for equity indexed annuities (EIA), which are annuity contracts with a value based on performance of a specified equity-based index (or indices). The Bulletin comes in response to the evolution of EIA product designs, and in light of prevailing low interest rates. read more
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As previously reported on InsureReinsure, the State of New York merged its the Insurance and Banking Departments into a new, single agency known as the Department of Financial Services (“DFS”), with new and heightened oversight responsibilities over the financial services industry as a whole. At the helm of the DFS is the Superintendent of Financial Services, Benjamin M. Lawsky. read more
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The Securities and Exchange Commission (SEC) has provided a timeframe for when it intends to issue new rules implementing sections of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Notably, none of the rules the SEC intends to implement directly effect the insurance industry. read more
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WHITE HOUSE ISSUES HEALTH REFORM PROGRESS REPORT
In a January 18, 2012 report, the White House stated that all states have “taken some action to implement health reform,” and that 28 states and the District of Columbia are “on their way toward establishing their own Affordable Insurance Exchange.” read more
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The next U.S. Re Under 40s Group event will take place on January 26 at Three Sheets Saloon at 134 West 3rd Street (between 6th Avenue and MacDougal Street). The event will start at 5:30 and there will be an open bar between 6:00 and 7:00. Click here for more information and to RSVP. read more
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On 4 January 2012, the Solicitors Regulation Authority (the SRA) issued guidance to solicitors on their professional duties when dealing with claims relating to mis-sold payment protection insurance ( PPI). read more
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The next U.S. Re Under 40s Group event will take place on January 26 at Three Sheets Saloon at 134 West 3rd Street (between 6th Avenue and MacDougal Street). The event will start at 5:30 and there will be an open bar between 6:00 and 7:00. Click here for more information and to RSVP. read more
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We have previously reported on the Law Commission and Scottish Law Commission's ( the Commissions) review of insurance contract law. The Commissions have published a further Consultation Paper ( the Paper) requesting responses on the following areas of reform: read more
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On Tuesday, January 10, 2012, Knauf Plasterboard Tianjin Company (“Knauf”) gained preliminary approval from United States District Court Judge Eldon Fallon for the creation of an uncapped repair fund to settle thousands of Chinese Drywall claims across multiple states. read more
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In a December 2011 letter to the Federal Insurance Office (FIO), 1 the National Risk Retention Association (NRRA) advised FIO that revisions are needed to stop the states from encroaching on risk retentions groups’ (RRGs’) rights to operate nationally when licensed in a single state. 2 read more
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The U.S. Government Accountability Office (“GAO”) has issued a report (GAO-12-16, the “Report”) regarding state implementation of the Liability Risk Retention Act of 1986 (“LRRA”). The LRRA permits the formation of risk retention groups (“RRG”), whereby similar businesses with similar risks can self-insure their commercial liability on a group basis. read more
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In Starlight Shipping Co v Allianz Marine and Aviation Versicherungs AG & Ors [2011] EWHC 3381 the High Court ruled that the terms of a settlement embodied in a Tomlin Order could be enforced by summary relief and that it was not necessary to issue fresh proceedings to do so. read more
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Scott Wallace, the President and CEO of Citizens Property Insurance Corporation (“Citizens”), has announced his resignation to be effective April 2012. The timing coincides with the completion of Florida’s most recent legislative session, which began today. read more
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CMS ISSUES ADDITIONAL HEALTH PLAN WAIVERS
On January 6, the Centers for Medicare & Medicaid Services (CMS) announced that it had granted waivers to 1,231 employer-sponsored health insurance plans that will allow them to continue despite their non-compliance with certain requirements of the Patient Protection and Affordable Care Act (PPACA). read more
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Edwards Wildman's Privacy and Data Protection Group is pleased to announce that the newest edition of its White Paper, "Everyone's Nightmare: Privacy and Data Breach Risks," has been prepared. The paper discusses legal and regulatory data security and breach notification developments, exposures presented by data breaches, recent major breaches and court decisions, and lines of insurance potentially impacted. read more
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In the case of Liberty Insurance Pte Ltd & ANOR v Argo Systems FZE [2011] EWCA Civ 1572 it was held that the judge at first instance had erred in concluding that Liberty (the appellant insurer) had made an unequivocal representation to Argo (the insured) that it no longer intended to rely on its legal right to be discharged from liability under a policy of marine insurance as a result of Argo's breach of a warranty. read more
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The Interstate Insurance Product Regulation Commission (“IIPRC”) issued a press release on January 6, 2012 (the “Release”) announcing that Illinois will accept variable life and annuity product filings using Interstate Insurance Compact (“Compact”) standards. The Compact is a modernization initiative promoting uniform product standards across states. read more
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Representative Bill Hager, R-Boca Raton, filed HB 1113 (the “Bill”) in the Florida House of Representatives at the end of December 2011 that would place new restrictions on claims bills and which lawmakers can file such bills. Claims bills, which are based on the state’s sovereign immunity laws, generally limit the liability of government agencies to $200,000. read more
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Robert E. Wagner has been appointed as acting director of the Illinois Department of Insurance (the “Department”) by Governor Pat Quinn. Acting Director Wagner most recently served as the Department's General Counsel. read more
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Edwards Wildman Palmer LLP will host the Insurance Federation of New York's 2012 kick-off “Breakfast with...” program at its New York office on Friday morning, January 20. The topic will be the "Impact of Natural Catastrophes in 2011 on Insurers’ Results," which will be addressed by an expert panel of economists and insurance executives. read more
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This is an update of our previous article published in the December 2011 Insurance & Reinsurance Review. The Lloyd’s market saw considerable levels of acquisition activity in 2011. Between September and year end, among other transactions: Haverford made an offer to acquire a stake in LSE listed Omega (then, following a deterioration in Omega's third-quarter results, announced that the offer had lapsed); a consortium led by Tawa agreed to acquire Whittington; Ryan Specialty Group acquired Jubilee; Hardy announced that it was considering finding a buyer and had received several preliminary expressions of interest (including from Beazley); Torus agreed to acquire Broadgate; ProSight acquired TSM Agencies; and Randall & Quilter agreed to acquire Synergy Insurance Services (UK). read more
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Concerns over the Medical Loss Ratio (“MLR”), a key requirement under the Patient Protection and Affordable Care Act of 2010 (“PPACA”), were expressed at a House Subcommittee on Investigations, Oversight and Regulations (the “Subcommittee”) hearing in mid-December over how it will reduce competition among healthcare insurers and harm healthcare insurance agents and brokers. The Subcommittee is a subset of the House Small Business Committee. read more
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Two recent decisions from federal courts addressed an important issue for many reinsurers: whether a non-party to a reinsurance agreement (such as a cedent’s insured) can proceed directly against the reinsurer for amounts owed to the non-party by the ceding company. read more
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On December 19, 2011, the head of the Connecticut Insurance Department (the "CID"), Commissioner Thomas Leonardi, announced the signing of a memorandum of understanding ("MoU") with the German Federal Financial Supervisory Authority ("BaFin"), the governmental body responsible for financial regulation in Germany. Under the MoU, the CID and BaFin may request assistance from one another, including obtaining information on regulated companies and individuals. read more
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The Connecticut Insurance Department issued a bulletin on December 19, 2011 (the “Bulletin”), explaining the training requirements mandated by Sections 38a-432a-1 to 38a-432a-8 of the Regulations of Connecticut State Agencies (the “Regulation”) for insurance producers who sell annuity products. The Regulation goes into effect on February 18, 2012, and implements the National Association of Insurance Commissioners Suitability in Annuity Transactions Model Regulation in Connecticut. read more
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The converging events that led to the devastation in Japan will raise a number of issues relating to the aggregation of losses under reinsurance contracts. The precise wording of aggregation provisions in these contracts will be crucial in determining the scope of coverage. Unfortunately, much uncertainty remains as to the meaning of many aggregation provisions and ‘hours clauses’ in particular. read more
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On December 12, 2011, the Illinois Department of Insurance issued a revised bulletin (the “Bulletin”) regarding the use of retained asset accounts by life insurance companies. Retained asset accounts, for purposes of the Bulletin, are mechanisms by which an insurer or entity acting on behalf of an insurer may settle proceeds payable under a policy by depositing such proceeds into an account, and retaining them in accordance with the terms of supplementary contract not involving annuity benefits. read more
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Last month, the Life Insurance and Annuities (A) Committee of the National Association of Insurance Commissioners (“NAIC”) formed a sub-group charged with reviewing issues surrounding contingent annuities. The charge comes in response to industry disagreement over the classification of contingent annuities. read more
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Currently before the Florida Supreme Court is a case challenging the constitutionality of Section 626.854(6) of the Florida Statutes, which imposes restrictions on the solicitation of business by public adjusters within the 48 hours immediately following an event that may become the subject of a claim under an insurance policy. A decision is expected within weeks. read more
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The California Insurance Department issued a bulletin (“Bulletin”) on December 6, 2011 regarding annuity training requirements under California Insurance Code Sections 1749.8 and 10509.9 15(a). read more
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The New York Department of Financial Services (“DFS”) issued a circular letter on December 19, 2011 (the “Circular Letter”) emphasizing the importance of risk management and indicating that the DFS expects every insurer to adopt a formal enterprise risk management (“ERM”) function. The ERM function should identify and manage risk exposures to the insurer within a group enterprise or at the company level when the insurer is a stand alone enterprise. read more
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SENATE PASSES TEMPORARY "DOC FIX"; HOUSE ACTION AWAITED
On December 17, the U.S. Senate voted 89-10 to pass the "Temporary Payroll Tax Cut Continuation Act of 2011," which included a two-month delay in implementing the Medicare Physician Fee Schedule for calendar year 2012. As we reported in our Healthcare Update on November 7, the new Fee Schedule calls for an overall 27.4% reduction in payment rates for physicians, nurse practitioners and physical therapists. read more
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In November 2011, the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity held a hearing to discuss proposed legislation to:
- Prohibit the Federal Insurance Office of the Department of the Treasury and other financial regulators from collecting data directly from insurers.
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On December 8, 2011 the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity approved legislation eliminating the Federal Insurance Office’s (“FIO”) and the Office of Financial Research’s (“OFR”) authority to subpoena information from insurance companies. H.R. 3559 (the Insurance Data Protection Act), was introduced by Representative Steve Stivers (R-OH) and was approved by a party-line vote of 7-5, with each Republican on the Subcommittee voting in favor. read more
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On December 9, 2011, the Federal Office of Insurance (“FIO”) held its first meeting at the U.S. Department of Treasury, entitled “Insurance Regulation in the United States: Modernization and Improvement.” The conference was attended by insurance regulators and industry representatives. read more
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We previously reported on the first instance decision of Re Digital Satellites Warranty Cover ( see our previous blog here). Digital Satellites Warranty Cover Limited (DSWCL) and Satellite Services (SS) (the Appellants) were in the business of selling extended warranties to satellite television customers. read more
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Connecticut has amended its captive law pursuant to Public Act No. 11-1 (the “Act”). The Act creates three new subgroups of Connecticut-domiciled captives: sponsored, branch, and special purpose financial captives. read more
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On 14 December, the UK's Office of Fair Trading ('OFT') announced that it had launched a market study into the private motor insurance sector ( click here for press release). This decision follows a 'call for evidence' back in September, which was itself initiated by concerns over reported increases in motor insurance premiums. read more
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On 8 December 2011, Julian Adams, Director of Insurance at the Financial Services Authority ( FSA), explained in a speech to the Association of British Insurers how UK (re)insurance companies may be permitted to start their Solvency II implementation as initially scheduled on 1 January 2013 rather than on the delayed implementation date of 1 January 2014. read more
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In March 2011, the European Court of Justice ruled that, with effect from 21 December 2012, the use of gender as a risk factor by insurers should not result in individual differences in premiums and benefits for men and women ( see our previous blog post here). The Government has expressed its disappointment with the judgment, believing that financial services providers should be allowed to make sensible decisions based on sound analysis of relevant risk factors, but is nevertheless required to implement the ECJ's judgment. read more
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Several healthcare consumer advocacy groups are signatories to a letter (the “ Letter”) that was sent to members of Congress in response to a letter that was sent to Congress by the National Association of Insurance Commissioners (the “NAIC”), as discussed in our previous post here. The NAIC letter urged Congress to exempt fees and commissions paid to health insurance producers from the medical loss ratio (“MLR”) calculation under the Patient Protection and Affordable Care Act (“PPACA”) in order to preserve consumer access to agents and brokers. read more
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The High Court has ruled in test proceedings, that two "before-the-event" legal expenses insurers erred when they declined to cover the legal fees of a firm of solicitors that was not on the insurers' panel. 1 read more
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Last month, the Delaware Department of Insurance (the “Department”) issued Domestic/Foreign Insurers Bulletin No. 46 to provide guidance regarding the implementation of the Civil Union and Equality Act of 2011 (the “Act”), which becomes effective January 1, 2012. The Act provides that two persons of the same sex who establish a civil union shall be subject to the same requirements and entitled to the same rights, protections and benefits as married couples under Delaware law. read more
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Edwards Wildman Palmer's Insurance and Reinsurance Department recently published its latest Newsletter, Insurance & Reinsurance Review - December 2011, which contains eight articles about various topics in the insurance and reinsurance industry. Please click on the links below to read each article and if you would like to be added to the mailing list to receive the next edition of the Insurance and Reinsurance Review, please email us at InsureReinsure@edwardswildman.com. To view the entire Insurance & Reinsurance Review - December 2011, please click here. read more
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The New Rules officially took effect on 15 October 2011 and since then, all foreign individuals (unless exempted) working in the PRC must participate in the PRC Social Insurance System. The New Rules affect every foreign individual (non-Chinese national) who is in possession of an employment permit, which would include a permanent residence permit of foreigners, and is lawfully working for an entity registered in the PRC, including a PRC subsidiary or a representative office of a foreign company. read more
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CMS ISSUES MEDICAL LOSS RATIO REGULATIONS
Background. Among the most hotly debated provisions of the Patient Protection and Affordable Care Act (PPACA) have been the medical loss ratio (MLR) requirements, which were intended to lower healthcare costs by requiring health insurance companies to spend less on marketing and overhead expenses and more on care. read more
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Massachusetts Governor Duval Patrick signed H. 3795, which bans the use of credit-based insurance scores in the underwriting and rating of private passenger automobile insurance, into law on November 22, 2011 as Chapter 195 of the Acts of 2011. H. 3795 amends the Massachusetts General Laws and codifies a similar credit score prohibition in current Division of Insurance Regulations. read more
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