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

The UK’s Financial Conduct Authority (FCA) has indicated that it is likely to exercise its competition functions in the insurance sector in the next few months, including by examining retirement annuities and insurance add-ons.
Read More UK: Financial Conduct Authority Increases Scrutiny of the Insurance Sector

A federal district court in Washington handed Validus Reinsurance a major win on Wednesday, declaring that the IRS has no authority to assess excise tax on retrocessions. The decision in Validus Reinsurance, Ltd. v. United States of America, No. 13-0109 (D.D.C. Feb. 5, 2014), is available here. …
Read More Validus Wins Round One: Retrocessions Not Taxable Under 26 USC § 4371(3)

As part of their ongoing law reform project, the Law Commission and Scottish Law Commission (the Commissions) have published a number of draft clauses relating to the Insurance Contracts Bill as part of a limited consultation. …
Read More UK: Law Commissions Publish Draft Clauses to the Insurance Contracts Bill

This past Friday, the Texas Supreme Court gave general liability insurers pointed guidance about what constitutes an “assumption of liability” for purposes of a contractual liability exclusion. …
Read More Texas High Court Rules That Contractor Does Not “Assume Liability” When Agreeing To Perform Work In Good & Workmanlike Manner

The British Insurance Brokers’ Association (BIBA) has launched its 2014 Manifesto (available here) in UK Parliament. BIBA addresses its campaigning issues in three ways: delivering for consumers; businesses; and the insurance industry. …
Read More UK: BIBA Manifesto 2014 Highlights Cost of Brokers’ Regulation in the UK

Illinois law permits rescission of an insurance policy if, in negotiating for the policy, the insured made an innocent, but material, misrepresentation. …
Read More An Illinois Appellate Court Again Refuses to Recognize that Innocence Does Not Bar Rescission of an Insurance Policy

On December 18, 2013, the National Association of Insurance Commissioners (NAIC) approved four jurisdictions as “Conditional Qualified Jurisdictions,” meeting its year-end goal for expedited review of certain jurisdictions. The four jurisdictions are Bermuda, Germany, Switzerland and the United Kingdom.
Read More NAIC: Bermuda, Germany, Switzerland and UK Now Qualified for Reduced Collateral Requirements

While interpreting a policy governed by Illinois law, the Seventh Circuit found ambiguity based on two “plausible” interpretations and found coverage, a finding based on language that appears to have been construed in isolation and without regard to the purpose or pricing of the policy. That case was National Casualty Co. v. White Mountains Reinsurance Co., no. 11-3158 (7th Cir. Oct. 30, 2013).
Read More Based on a Doubtful “Plausible” Reading of an Insurance Policy, the Seventh Circuit Finds Coverage