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The Massachusetts Legislature’s Joint Committee on Financial Services is due to report next week on HB 881, An Act Relative to Reinsurance Requirements. Sponsored by Representative Michael Costello of Newburyport, the bill closely tracks the NAIC’s Revised Credit for Reinsurance Model Law, which has already been adopted in eighteen states, including New York, Connecticut, Rhode Island, and New Hampshire. …
Read More Massachusetts Legislative Committee Considers Reinsurance Credit Requirements

In a letter dated November 10, 2013 (the “Letter”) to the United States Senate Banking Committee (the “Committee”), the National Association of Insurance Commissioners (“NAIC”) showed support for Committee members seeking to address the potential confusion regarding capital and leverage requirements for insurers regulated by the Federal Reserve due to being either considered (1) a thrift holding company, or (2) a systemically important financial institution as designated by the Financial Stability Oversight Council. …
Read More Insurance Regulators Make a Plea to the United States Senate Banking Committee Regarding Capital Regulations for Insurers

Storm Shutters

Pursuant to the Connecticut Insurance Code, “[n]o insurer that delivers, issues for delivery, renews, amends or endorses a homeowners insurance policy in this state shall refuse to renew or issue such a policy solely on the basis that the insured or prospective insured has failed to install permanent storm shutters on his or her residential dwelling as a means of mitigating loss from hurricanes or other severe storms.” …
Read More Connecticut Lawmakers Consider Bill that Would Mandate Coverage by Insurers for Homes that Lack Permanent Storm Shutters; Provides Authority for Private Insurers to Offer Flood Insurance Coverage

In Intervest Construction of Jax v. General Fidelity Ins. Co., the Florida Supreme Court considered insurance policy language that called for a self-insured retention to be exhausted by “payments made by the insured.” …
Read More The Florida Supreme Court Takes the “Self” Out of “Self-Insured Retention” and Rules that the Insured’s Self-Insured Retention Can Be Satisfied by Payment by Someone Other Than the Insured

On March 6, 2014, President Obama issued an Executive Order setting forth the foundation for imposing sanctions against any individual or entity responsible for or complicit in actions or policies that undermine democratic processes or institutions in Ukraine or threaten the peace, security, stability, sovereignty, or territorial integrity of Ukraine. …
Read More New Executive Order Regarding U.S. Sanctions against Certain Persons Contributing to the Situation in Ukraine

Earlier in 2014, Governor Andrew Cuomo introduced a series of tax reforms in his budget bill (the “Bill”) which is currently being addressed by the state legislature. …
Read More Potential New York Legislation to Introduce Tax Changes With Respect To Captive Insurers

In a 2-1 decision released on February 20, the U.S. Court of Appeals for the Fourth Circuit reversed the district court below and declared that the term “direct contributing properties” was unambiguous in the context of a policy that provided contingent business interruption coverage. Accordingly, the court found that the insured was not entitled to coverage when its production facility was knocked offline for several months following an explosion at a natural gas producer’s facility. …
Read More Fourth Circuit Declares “Direct Contributing Properties” Unambiguous In Context of CBI Coverage

The Southern District of New York has issued an interesting opinion for allocation disputes decided under Massachusetts law. The case, which concerns long-tail environmental damage, is The Narragansett Electric Co. v. American Home Assurance Co., No. 11-8299 (S.D.N.Y., Feb. 18, 2014). A copy of the opinion is available here. …
Read More New York Federal Court, Applying Massachusetts Law, Holds that Defense Costs Should be Allocated by the Joint and Several Method Rather than the Pro Rata Method

New York’s highest court has reversed itself on an important duty to defend opinion. In K2 Inv. Group, et al. v. Am. Guar. & Liab. Ins. Co., (Feb. 18, 2014), available here, the Court of Appeals held that an insurer which breaches its duty to defend does not lose its right to rely on policy exclusions as a defense to indemnity. …
Read More New York’s Highest Court Holds that Breach of Duty to Defend does not Prevent Insurer from Relying on Policy Exclusions to Dispute Duty to Indemnify