On 25 March 2013, the UK’s Financial Services Authority (FSA) published a Policy Statement which confirms that the Financial Conduct Authority (FCA) will use its Temporary Product Intervention Rules (TPIRs) power in the way the FSA proposed (see our earlier blog). The FCA will be established, and its TPIR power will become available, on 1 April 2013. …
Read More UK: FSA Confirms FCA Approach to Using Temporary Product Intervention Rules

On March 14, 2013, the NAIC’s Captive and Special Purpose Vehicle Use (E) Subgroup (the “Subgroup”) released a revised version of its White Paper with respect to Special Purposes Vehicles (“SPVs”) and Captives (the “New Draft”). The New Draft is now open for a public comment period until April 28, 2013. …
Read More NAIC Subgroup’s White Paper on Captives and SPVs

On 25 January 2013, Validus Reinsurance Ltd (Validus), a reinsurer domiciled in Bermuda, filed a suit in the District Court of the District of Columbia against the United States of America for the repayment of taxes which they allege were wrongly demanded by the IRS. The tax was assessed under the Federal Excise Tax (FET) regime, which (among other things) imposes a 1% tax on premiums under contracts of reinsurance with foreign reinsurers covering risks in the US (s4371 of the Internal Revenue Code). …
Read More Validus Launches a Challenge to the IRS’ Cascading Federal Excise Tax Ruling

Earlier this week Federico Buenrostro, who headed the influential California Public Employees’ Retirement System from 2002 through 2008, was indicted by a federal grand jury on fraud charges stemming from his involvement in falsifying documents as part of a “pay-to-play” scheme at the pension fund. The indictment is the result of a four year investigation by the SEC, the FBI, and the U.S. Postal Inspection Service. …
Read More Indictment of Former CalPERS Head Puts Spotlight Back on Placement Agents and Private Equity Firms

The government has announced plans to transfer consumer credit regulation to the Financial Conduct Authority (FCA) in April 2014, when the current regulator, the Office of Fair Trading (OFT) will cease to exist. …
Read More UK: FCA Outlines High-Level Approach to Consumer Credit Regulation

The UK Government has announced plans to transfer consumer credit regulation to the Financial Conduct Authority (FCA) in April 2014, when the current regulator, the Office of Fair Trading (OFT), will cease to exist. …
Read More UK: HM Treasury Outlines Framework For FCA Regulation of Consumer Credit

A New York appellate court recently held that an insurer’s liability for certain underlying lead paint claims was limited to a single per-occurrence limit, enforcing a policy’s noncumulation clause and finding that the claims arose from the same occurrence. See Nesmith, et al. v. Allstate Ins. Co., No. 12-00182 (4th Dep’t Feb. 1, 2013). …
Read More New York State Court Enforces Policy’s Noncumulation Clause and Finds That Multiple Lead Paint Claims Arose From the Same Occurrence

In Bunga S.A. v. Kyla Shipping Company Limited [2012] EWHC 3522 (Comm), the Commercial Court considered whether an arbitrator had made an error of law under Section 69 of the Arbitration Act 1996. The court concluded that a continuing warranty to maintain hull insurance created an assumption of risk and responsibility, defeating the contention that a charterparty had been frustrated. …
Read More UK: Warranty to Insure Creates an Assumption of Risk and Responsibility

The Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury recently launched a new version of SDN Search, the search tool for searching its Specially Designated Nationals (“SDN”) and blocked persons list. According to OFAC, the new version of SDN Search provides users with much more leeway when searching for names. For example, SDN Search no longer returns only exact matches. …
Read More New Search Tool Available for Checking the Names of Specially Designated Nationals and Blocked Persons Subject to U.S. Sanctions

On March 7, 2013, Washington State’s highest court dealt a blow to liability insurers seeking to recover defense costs for uncovered claims. The court, in a 5-4 decision available here, held that where an insurer elects to defend its insured under a reservation of rights, it cannot force the insured to remit those defense costs if a court later determines that the insurer had no duty to defend. …
Read More The Supreme Court of Washington Holds That an Insurer Cannot Recoup Defense Costs After Defending Under a Reservation of Rights, Notwithstanding a Determination That There is No Coverage