At a hearing held by the National Conference of Insurance Legislators (“NCOIL”) on Saturday, January 24, 2009, a panel of state legislators heard testimony from a number of experts regarding the advantages and disadvantages of regulating the credit default swap (“CDS”) market on a state, rather than federal, basis.
United States
New York Insurance Department Approves CIFG Transactions
On January 22, 2009, the New York Insurance Department (the “NYID”) approved two transactions involving CIFG Holding, Ltd. (“CIFG”), a financially-impaired bond insurer. The transactions involved a commutation of approximately $12 billion in troubled credit default swaps and reinsurance of $13 billion of municipal bonds, and are expected to help the company avoid rehabilitation. Last year, the NYID agreed to forbear placing CIFG in rehabilitation in order to allow these transactions to develop.
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CLIENT ADVISORY: New York Releases Proposed Amendment to Regulation No. 20 Relaxing Collateral Requirements for Unauthorized Reinsurers and Prohibiting Arbitration
By Troutman Pepper Locke on
On December 24, 2008, the New York State Insurance Department (“NYSID”) released Proposed Tenth Amendment to Regulation No. 20 (11 NYCRR 125) Credit for Reinsurance from Unauthorized Reinsurers (the “Proposal”). The Proposal, if adopted, would significantly liberalize existing reinsurance regulation by allowing ceding insurers to take statutory credit for reinsurance assumed by unauthorized, unaccredited reinsurers without requiring as much, or in some cases, any collateral if certain conditions are satisfied. …
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Federal Court Dismisses Petition to Vacate Arbitration Award for Lack of Subject Matter Jurisdiction, but Recognizes Viability of Manifest Disregard of the Law
By Troutman Pepper Locke on
Posted in Arbitration, United States
Plaintiff Newton & Associates, L.L.C. (“Newton”) petitioned the U.S. District Court for the Eastern District of Louisiana pursuant to Section 10 of the Federal Arbitration Act (“FAA”) to vacate an arbitration award in favor of defendant Sandra R. Sanchez (“Sanchez”). …
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Merrill Lynch Settles Investor and Employee Suits Regarding Subprime Disclosures
By Troutman Pepper Locke on
On January 16, 2009, Ohio Attorney General Richard Cordray and investors agreed to approve a $475 million settlement for a class action suit filed against Merrill Lynch (In re Merrill Lynch & Co., Inc. Securities, Derivative and ERISA Litigation, No.07-CV-9633 (S.D.N.Y.)). …
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Merck Reports Dispute With Insurers Over Coverage of Vioxx Claims
By Troutman Pepper Locke on
According to its recent Form 10-Q SEC filing, Merck’s insurance coverage will not suffice to fully cover the November 2007 settlement reached in connection with the federal Vioxx class action litigation, reported to be for an “aggregate amount of $4.85 billion” for qualifying domestic claims (a figure that does not include legal defense costs). …
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Federal Court Denies Insurer’s Motion to Dismiss Whistleblower Suit
By Troutman Pepper Locke on
The U.S. District Court for the District of Massachusetts recently denied an insurer’s motion to dismiss a False Claims Act suit based on subject matter and scienter arguments.
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Third Circuit Vastly Reduces Punitive Damages Award Against Insurer, Applies 1:1 Ratio
By Troutman Pepper Locke on
Recently the Third Circuit Court of Appeals reduced an award of punitive damages by over two-thirds, holding that a 1:1 ratio between punitives and compensatory damages is the appropriate limit where the harm is purely economic and the compensatory damages award is substantial. Jurinko v. Medical Protective Co., Nos. 06-3519 & 06-3666 (3rd Cir., December 24, 2008). The court reduced the award from $6.25 million to just under $2 million. …
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Intel Commences Action Against Its Insurer for Coverage of Antitrust Litigation Under “Advertising Liability” Provision of Policy
By Troutman Pepper Locke on
On January 23, 2009, Intel Corp. filed suit against American Guarantee and Liability Insurance Company (“AGLI”), in the United States District Court for the Northern District of California, alleging that AGLI owes a duty to defend Intel in its antitrust litigation with Advanced Micro Devices Inc. (“AMD”). …
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Suit Filed to Overturn SEC Rule Classifying Indexed Annuities as Securities
By Troutman Pepper Locke on
On January 16, 2009, American Equity Investment Life Holding Company (“American Equity”) issued a press release announcing that it, together with a coalition of insurance companies and independent marketing organizations, filed suit in the U.S. Court of Appeals for the District of Columbia Circuit seeking to overturn Rule 151A adopted by the Securities and Exchange Commission (“SEC”). …
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