California legislators are ready to pass a bill to entice insurance companies to invest in "green" technology projects in low- and moderate-income urban and rural communities. read more
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The Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) is the latest development in the ongoing saga of state versus federal regulation of insurance. Unlike other major industries, insurance is still primarily and almost exclusively regulated by the states - and the states have long been vigilant about keeping it that way. read more
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In Fensterstock v. Education Finance Partners and Affiliated Computer Services, Inc., plaintiff Fensterstock commenced a class action lawsuit in the Southern District of New York against Education Finance Partners and Affiliated Computer Services for engaging in fraudulent and deceptive practices in connection with the issuance of student loans. The defendant lenders moved to stay the action and compel individual arbitration in accordance with the loan agreement’s binding arbitration clause. read more
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In a recent decision by the Fourth Circuit Court of Appeals, MCI Constructors, LLC v. City of Greensboro, No. 09-1600 (4th Cir. July 1, 2010), the court held that the district court did not err in denying motions to vacate certain arbitration awards. read more
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Defendants, certain ceding companies, appealed a judgment from the U.S. District Court for the Southern District of New York holding them liable for fraudulently inducing the plaintiff reinsurer to enter into two reinsurance facilities. The defendants also appealed the portion of the judgment finding (a) that the cedents waived their right to arbitration by pursuing it in a summary judgment motion instead of at the outset of the dispute and (b) that the reinsurer’s claims sounded in fraud (as opposed to contract) and were thus not arbitrable under a provision in a facultative reinsurance agreement providing for arbitration of disputes “arising out of the interpretation of this agreement.” read more
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On August 19, 2010, the California Legislature passed two bills, AB 1708 and AB 1837, which if signed into law by Governor Arnold Schwarzenegger will have a significant impact on surplus lines insurers. read more
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A California Appeals Court recently held that a wrongful death action against a security guard who shot a man while on duty was excluded under an “assault and battery” exclusion, even if the security guard acted in self-defense. Michael Krause, Sr., et al. v. Western Heritage Ins. Co., No. G041405 (Cal. App. 4th Dist. Aug. 2, 2010) (unpublished). read more
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The Connecticut Insurance Department (“Department”) issued Bulletin IC-25 (the “Bulletin”), dated August 18, 2010, to require all entities doing business in Connecticut that are licensed by or registered with the Department to notify the Department of any information security incident. read more
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Helene Tomasian, a non-party to an arbitration between Ware and C.D. Peacock, Inc., moved to quash an arbitrator’s subpoena compelling her attendance at a pre-hearing deposition. See Ware v. C.D. Peacock, Inc., No. 10-cv-2587 (N.D. Ill. 2010). The subpoena was issued at the request of Peacock after the arbitrator denied its motion for summary judgment based upon “in large part” the affidavit of Ms. Tomasian. read more
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Earlier this month, New Jersey Department of Bank and Insurance Commissioner Thomas Considine issued Bulletin No. 10-19 reminding surplus lines brokers that the $50 limitation remains in effect for fees charged by surplus lines brokers to originating brokers. P.L. 2010, Chapter 42, which was enacted on July 6, 2010, amends N.J. Stat. Ann. § 17:22A-38b to allow for the Commissioner to set the fee limitation by regulation, however, it is not effective until October 1, 2010. read more
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A Nevada federal judge has determined that an insurer did not breach its contract or act in bad faith when it terminated payment for chiropractic services for two policyholders injured in an automobile accident. The Court found that the plaintiff policyholders failed to counter medical testimony that they did not require additional chiropractic care because the “maximum medical improvement” had been reached. read more
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A New Jersey federal judge dismissed a bad-faith claim for underinsured-motorist benefits, finding that Plaintiff's complaint lacked necessary factual support and did not rise above the level of “bare averment.” The Court also dismissed Plaintiff’s claim for punitive damages, finding that Plaintiff failed to allege sufficient facts to show egregious circumstances or that the insurer's conduct was wantonly reckless or malicious. read more
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The Centers for Medicare and Medicaid Services (CMS) announced on August 18 that states have until September 24 to request an extension of the enhanced Federal Medical Assistance Percentage (FMAP) – the federal government’s share of Medicaid funding. read more
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On 26 August 2010, the European Commisson (the Commission) opened a competition investigation into the maritime insurance sector, in particular the agreements between the Protection & Indemnity (P&I) Clubs within the International Group of P&I Clubs (the International Group), a worldwide association of thirteen P&I Clubs. read more
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The fifth Quantitative Impact Study on the Solvency II implementing measures (QIS5) was launched by the European Commission (the Commission) on 23 August 2010. The study will run until November 2010 and the Commission notes that it is aiming for a participation rate of at least 60% of EU insurance and reinsurance companies and 75% of EU insurance groups. Of particular importance to the Commission is participation by smaller insurance companies and insurance providers specialised in specific business lines. read more
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The Financial Services Authority (FSA) has reported that it has fined Zurich UK £2,275,000 for " failing to have adequate systems and controls in place to prevent the loss of customers’ confidential information". According to the FSA's Final Notice, " the breaches related to the management of risks associated with the security of customer information in the context of certain outsourcing arrangements." read more
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A decision of the Eighth Circuit Court of Appeals, Northport Health Services of Arkansas, LLC v. Rutherford, No. 09-2433 (8th Cir. 2010), recently held that diversity of citizenship jurisdiction in the context of a motion to compel arbitration under § 4 of the Federal Arbitration Act (“FAA”) can be determined by looking at the citizenship of the parties named in the proceedings before the district court, plus any indispensible parties who must be joined. read more
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Earlier this month, the Massachusetts Division of Insurance (the “Division”) struck a deal with Health New England to settle a dispute over rate increases. In the winter of 2009, Health New England, a Springfield, Massachusetts health insurer, attempted to increase its health insurance premiums by a range of 11.5% to 21.3% for about 21,000 customers. The Division denied this increase on April 1, 2010, along with other insurers who sought double-digit increases. read more
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On 18 August 2010 the UK Ministry of Justice launched a "Call for Evidence and Views" to inform its response to a European Commission Green Paper on a European contract law. read more
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