WELLPOINT PAYS $1.7 MILLION FOR HIPAA BREACH

On July 11, the U.S. Department of Health and Human Services announced that health insurer Wellpoint Inc. has agreed to pay the sum of $1.7 million to settle claims that it violated the privacy and security rules under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). An improperly secured online database caused the electronic protected health information (ePHI) of 612,402 Wellpoint customers to be potentially vulnerable to unauthorized access, although the company said that it did not believe that any fraud or identity theft had occurred due to the breach.…

Read More Wellpoint Pays $1.7 Million for HIPAA Breach; CMS Announces Initial Pioneer ACO Results; CMS Releases Final Rule on “Navigators”

In Halvorson v. Auto-Owners Insurance Co., the Eighth Circuit Court of Appeals reversed certification of a class accusing Auto-Owners Insurance Co. (“AIC”) of breaching its insurance policies and violating its duty of good faith and fair dealing by automatically refusing to pay medical expenses in excess of certain predetermined thresholds.
Read More The Eighth Circuit Reverses Certification of a Class Challenging an Insurer’s Use of Percentiles to Determine Whether a Doctor’s Bill Was “Usual and Customary”

There has been a sharp uptick in the frequency of merger objection lawsuits in the past several years. These suits are now brought after virtually every major deal is announced.
Read More REMINDER – Complimentary Webinar – Fundamentals Of, and Insurance Coverage For, Merger Objection Suits: The Basics – July 17, 2013

The High Court has ruled that a report into a fatal plane crash produced by the Air Accident Investigation Branch (AAIB) is admissible as evidence in civil proceedings seeking damages for alleged negligence by the pilot.
Read More UK: Court Admits Air Accident Report as Evidence in Civil Negligence Proceedings

In Versloot Dredging v HDI [2013] EWHC 1666, Popplewell J has criticised the Privy Council decision in Stemson v AMP [2006] UKPC 30 and the Court of Appeal decision in Agapitos v Agnew [2003] QB 556 concerning the circumstances in which the Court should reject a policyholder’s claim that is supported by a fraudulent device.
Read More UK: Approach to Fraudulent Devices Criticised

On July 9, 2013, the Financial Stability Oversight Council (FSOC) announced that it has named American International Group, Inc. (AIG) and General Electric Capital Corporation, Inc. (GE) as systemically significant to the U.S. financial system. This designation (also known as SIFI or “systemically important financial institution”) triggers supervision by the Federal Reserve Board and requires that the named company follow enhanced regulatory standards. …
Read More FSOC Designates AIG and GE Capital as SIFIs

This week, Utah Senator Orrin Hatch introduced Bill S. 1270, which, if enacted, would permit state and local governments to transfer their pensions programs to life insurers. The purpose of this bill is to strengthen government pension plans, since, due to the erosion of pension plan assets as a result of the financial crisis, there is generally perceived to be an enormous gap between the pension benefits required to be paid to workers and the funds available to make such payments. …
Read More Senate Bill to Permit Transfer of Public Pension Programs to Life Insurers

The New York Department of Financial Services (“DFS”) has recently begun a string of new investigations into possible violations by non-U.S. reinsurers of U.S. sanctions against Iran, specifically those set forth in the Iran Freedom and Counter-Proliferation Act of 2012 (the “IFCPA”) that became effective on July 1, 2013. …
Read More New York Initiates Investigations into Possible Violations of the Latest U.S. Sanctions against Iran

In Certain Underwriters at Lloyd’s London v. Southern National Gas Co. (Ala. June 18, 2013), the Alabama Supreme Court upheld a jury verdict finding that the leaking of PCB from 8 different locations was one “occurrence.” Sonat (short for Southern National Gas Co.) had 38 air compressers to push natural gas through Sonat’s 14,000 miles of pipeline spanning seven southeastern states. …
Read More The Alabama Supreme Court Affirms Aggregating Toxic Spills into One Occurrence, As They Were the Policyholder’s Routine Practice for Fifteen Years

On June 26, 2013, the Appeals Court of Massachusetts determined that an automobile exclusion in a commercial general liability insurance policy precludes coverage for claims against an insured for alleged negligent supervision of an intoxicated employee, even where the policy at issue contains a “severability of interests” clause. …
Read More Massachusetts Appeals Court: Automobile Exclusion in CGL Policy Precludes Coverage for Negligent Supervision Claims