The Financial Services Authority (FSA) has reported that it has fined Zurich UK £2,275,000 for “failing to have adequate systems and controls in place to prevent the loss of customers’ confidential information“. According to the FSA’s Final Notice, “the breaches related to the management of risks associated with the security of customer information in the context of certain outsourcing arrangements.” …
Read More UK: FSA Fines Zurich UK

A decision of the Eighth Circuit Court of Appeals, Northport Health Services of Arkansas, LLC v. Rutherford, No. 09-2433 (8th Cir. 2010), recently held that diversity of citizenship jurisdiction in the context of a motion to compel arbitration under § 4 of the Federal Arbitration Act (“FAA”) can be determined by looking at the citizenship of the parties named in the proceedings before the district court, plus any indispensible parties who must be joined. …
Read More Eighth Circuit Rules on Diversity Jurisdiction for Federal Actions to Compel Arbitration

Earlier this month, the Massachusetts Division of Insurance (the “Division”) struck a deal with Health New England to settle a dispute over rate increases.  In the winter of 2009, Health New England, a Springfield, Massachusetts health insurer, attempted to increase its health insurance premiums by a range of 11.5% to 21.3% for about 21,000 customers.  The Division denied this increase on April 1, 2010, along with other insurers who sought double-digit increases. …
Read More Massachusetts Health Insurer Settles With Division of Insurance On Rate Increases

On 18 August 2010 the UK Ministry of Justice launched a “Call for Evidence and Views” to inform its response to a European Commission Green Paper on a European contract law. …
Read More UK: UK Government’s “Call for Evidence and Views” on a European Contract Law

On 17 August 2010 the China Insurance Regulatory Commission (the CIRC) issued basic guidelines for the internal controls at Chinese insurance companies, which include monitoring their allocation and management of insurance funds. …
Read More China: China Insurance Regulatory Commission Issues Guidelines to Strengthen Insurers’ Control of Funds

The People’s Bank of China (PBC) announced on 17 August 2010 a pilot scheme to permit Hong Kong and Macau insurers, banks and certain other financial institutions, with the approval of the PBC, to invest in the Chinese mainland’s 48.8 trillion renminbi (US$7.2 trillion) interbank bond market. Each institution will receive a quota for Chinese mainland interbank bonds according to its individual situation. The move has been welcomed by the Hong Kong Monetary Authority (HKMA). …
Read More Hong Kong: Pilot Scheme to Permit Insurers to Tap China’s Mainland Interbank Bond Market

Plaintiff moved to vacate an arbitration award issued in favor of defendant Stroehmann Bakers on the grounds that, among other things, the arbitrator’s decision was in “manifest disregard of the law.”  The U.S. District Court for the District of New Jersey, relying upon Third Circuit case law, noted that plaintiff was required to establish that the arbitrator’s award had absolutely no support from the record in order to prevail on this basis.  The court found that plaintiff had failed to meet the standard for manifest disregard of the law, and thus denied plaintiff’s motion to vacate. …
Read More New Jersey Federal Court Finds That Arbitration Award Was Not in Manifest Disregard of the Law

The National Association of Insurance Commissioners (“NAIC”) has released a derivatives risk mitigation proposal (“Proposal”) prepared by the American Council of Life Insurers (“ACLI”) for interim comment.  The Proposal would modify the formula for calculating risk-based capital (“RBC”) to reflect insurers’ use of derivatives to hedge  the risks of default or adverse change in fair market value to fixed income securities and common stocks. …
Read More NAIC Releases Derivatives Risk Mitigation Proposal for Comment

EAPD’s New York office will host an Insurance Federation of New York (IFNY) Breakfast on Thursday, September 30, 2010 featuring New York State Insurance Department’s Deputy Superintendent and General Counsel, Martha A. Lees.  As General Counsel, Lees advises the Superintendent and other officers of the Department regarding a wide array of legal matters and is responsible for supervision of the Office of General Counsel. …
Read More Prominent New York State Insurance Department Official to Speak at IFNY Event

As previously reported in this blog, President Obama signed into law the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 (the “Iran Sanctions Act”) in July, following the less stringent sanctions passed earlier by the U.N.  For a more detailed discussion of the Iran Sanctions Act, see here.  Canada, the European Union and Australia soon followed with similar sanctions aimed at Iran’s financial and energy sectors. …
Read More Lloyd’s Market Drafts Exclusion to Ensure Compliance With Iran Sanctions