On Friday, the Massachusetts Appeals Court handed down its decision in Rivera v. Commerce Insurance Company, No. 12-P-483 (Aug. 16, 2013). The insurance industry should take note of this unfair claim settlement practices case because the court determined that Commerce Insurance Company was liable for the plaintiffs’ tort-related litigation expenses following what was determined to be a bad-faith and unreasonable settlement offer, and proceeded to note precisely what constituted “tort-related litigation expenses.” A copy of the decision is available through the court’s website. …
Read More Massachusetts Appeals Court Affirms Insurer’s Liability For Tort-Related Litigation Expenses In Unfair Claim Settlement Practices Case

In a decision that has implications for reinsurance, the Massachusetts Supreme Judicial Court last week decided that the Federal Arbitration Act preempts the Massachusetts Arbitration Act where the relevant contract involves interstate commerce. The decision is McInnes v. LPL Financial, LLC, et al., No. SJC-11356 (Aug. 12, 2013), and is available at the court’s website. …
Read More Massachusetts High Court Rules That Federal Arbitration Act Applies to Contracts Involving Interstate Commerce

Following a recent government victory in U.S. District Court in Texas, the captive insurance company industry stands generally on alert, viewing this case as a sign of a perceived increase in focus by the Internal Revenue Service on captive insurance companies. …
Read More Increased IRS Scrutiny of Captive Insurance Arrangements

New York’s Department of Financial Services (DFS) has issued subpoenas to 22 of the largest investors and major companies involved in the digital cryptocurrency Bitcoin. Cryptocurrency is a form of digital currency (in essence just a file of code) which is generated and whose movements are authenticated using cryptography. …
Read More Key Bitcoin Players Subpoenaed by NY Regulator

Guaranty Trust Bank (UK) Ltd (GTB) has been fined £525,000 (discounted by 30% for settlement at an early stage of the investigation) by the FCA for failures in its anti-money laundering controls. The Final Notice, which can be found here, stated that, between 19 May 2008 and 19 July 2010, GTB had breached FCA Principle 3 by failing to have in place effective anti-money laundering systems and controls for high risk customers. …
Read More UK: FCA Fines Guaranty Trust Bank (UK) Ltd for Anti-Money Laundering Failures

The FCA issued decision notices last week for three individuals in connection with market abuse by Rameshkumar Goenka (which earned Goenka a fine of over $6.5 million and restitution of $3.1 million in 2011). The individuals concerned were David Davis, a senior partner and the compliance officer of Paul E Schweder Miller & Co, Vandana Parikh, a broker at the same firm, and Tariq Carimjee of Somerset Asset Management. …
Read More UK: FCA Fines Broker, Compliance Officer and Asset Manager in Relation to Market Abuse

Weather patterns in Oklahoma have taken their toll on the local insurance industry. Due to an unexpectedly large number of powerful tornadoes in May, including the devastating tornado that struck Moore, Oklahoma, insurance companies have thus far seen claims for tornado damages in excess of $1 billion in Oklahoma.
Read More Large Storms in Oklahoma Rattling Local Insurance Industry

The Connecticut Supreme Court, in a much anticipated subrogation decision, recently held that an insurer has priority over a policyholder in the context of a recovery for insurance policy deductible losses. See Fireman’s Fund Ins. Co. v. TD Banknorth Ins. Agency, Inc., 309 Conn. 449, — A.3d —-, 2013 WL 3818112 (Conn. July 30, 2013). …
Read More Connecticut Supreme Court Determines that the Make Whole Doctrine Does Not Apply to Insurance Policy Deductibles

PROPOSED BILL WOULD ELIMINATE STARK LAW EXCEPTION FOR SOME SERVICES

The “Promoting Integrity in Medicare Act of 2013,” introduced in the U.S. House of Representatives on August 1, would eliminate one of the Stark Law’s exceptions for advanced imaging, anatomic pathology, radiation therapy and physical therapy services performed in a physician’s office. …
Read More Healthcare Update: Proposed Bill Would Eliminate Stark Law Exception for Some Services; Oregon Exchange Won’t be Completely Ready by Deadline; “Doc Fix” Bill Advances in House

In Bituminous Casualty Corp. v. Iles, the Appellate Court of Illinois reversed the trial court’s judgment against the insurance company. An oil well exploded, leading to many lawsuits against Bituminous’s policyholders. …
Read More The Illinois Appellate Court Rules that CGL Policies’ General Aggregate Limit Should Not Be Mistaken for an Each Occurrence Limit