The Obama Administration unveiled the final portion of its sweeping financial regulatory reform effort last week, when the Treasury Department released its over-the-counter (OTC) derivatives proposal.  The draft legislative proposal – sent to Capitol Hill on August 11 – seeks to bring transparency to the field of OTC derivatives, and to provide regulators with tools to prevent abuses such as manipulation and fraud in such markets. 

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Read More Administration’s Final Regulatory Reform Proposal Released

House Speaker Nancy Pelosi (D-CA) and House Financial Services Chairman Barney Frank (D-MA) sent a letter to Treasury Secretary Timothy Geithner urging the Administration to ensure that executive pay at companies that received bailout dollars is not being rewarded at the expense of taxpayers. 

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Read More House Leaders Voice Concerns Over Bonuses

This updates our March 30, 2009 posting.  On July 27, 2009, the National Association of Insurance Commissioners (“NAIC”) released a revised draft of the Reinsurance Regulatory Modernization Act of 2009 (the “Act”), which was the result of a proposal adopted at its 2008 Winter Meeting to modernize reinsurance regulation. 

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Read More NAIC Releases Second Draft of Federal Legislation for Implementation of Reinsurance Regulatory Modernization Framework

On August 10, 2009, New York Governor David Patterson signed legislation continuing the freeze on medical malpractice rates.  In addition to the premium rate freeze, the legislation also suspended an anticipated surcharge.  The Legislature projected that without the freeze, medical malpractice rates would have increased by as much as 30% for some physicians. 

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Read More New York Freezes Medical Malpractice Rates For Additional Year

In Catalyst Investment Group Ltd & Ors v Max Lewinsohn & Ors [2009] EWHC 1964 (Ch) the High Court held that where the English courts have jurisdiction to hear a claim under Article 2 of EC Regulation 44/2001 (the Jurisdiction Regulation) it was not open to that court to stay the action before it on the grounds that there were existing proceedings on foot in a non-EU jurisdiction which had a closer connection to the case than England. 

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Read More UK: English High Court Considers the Effect of Parallel Proceedings on its Jurisdiction

Chile – The Association of Chilean Insurers recently reported that total premiums fell 12.3% when comparing the first half of 2009 to the first half of 2008.  Total premiums for general insurance fell 3.7% to US$ 1.031 billion for the period, while life premiums fell 16.5% to US$ 1.867 billion. 

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Read More Latin American Insurance and Reinsurance Update: Total Premiums Fall 12.3% in Chile; Life Insurance Premiums Grow by 25% in El Salvador, Peruvian Market Grows 20.2%; Puerto Rican Regulator Denies Plans to Liquidate First Medical

On July 9, 2009, a Texas federal court awarded in excess of $5.5 million in damages to an insured under a second-layer excess insurance policy, for claims arising out of Hurricane Katrina related damage. One of the main issues in contention was whether the second-layer excess insurer’s liability attached even if the underlying insurers had paid out their full limits of liability because they did not correctly determine coverage. 

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Read More Katrina: $5.5 Million in Damages Awarded by Texas Federal Court to an Insured Under a Second-Layer Excess Insurance Policy Regardless of Whether the Underlying Insurers Properly Paid their Limits

The applicant, Midgulf, was a trader in sulphur. Groupe Chimiche Tunisien was a state-owned company of Tunisia which had a demand for sulphur. The parties entered into a contract in June 2008 for the sale of 23,000 mt of sulphur by Midgulf to Groupe Chimiche Tunisien, which included a clause for London arbitration. A second, July, contract was for the sale and purchase of 150,000 mt of sulphur at $895 per ton. This was agreed between the parties orally. …
Read More UK: Agreement to Arbitrate: MIDGULF INTERNATIONAL LTD v GROUPE CHIMICHE TUNISIEN

On 24 March 2009, Sir Andrew Park sitting as a High Court judge in the UK Companies Court handed down his judgment in the case of Global Trader Europe Limited (Global Trader). The case is highly significant both for the global financial services industry and for those having to deal with the insolvency or near insolvency of financial institutions. …
Read More UK: English High Court Rules on Trust Claims in an Insolvency with Potentially Important Consequences for the Lehman Brothers Administration

A state appellate court in Louisiana recently increased a trial court’s award against an insurer in connection with a Hurricane Katrina-related bad faith claim, finding that the trial court had misinterpreted the statutory penalties available to the plaintiff. 

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Read More Louisiana Appeals Court Increases Trial Court Award to $1.3 Million in Statutory Penalties in Katrina Bad Faith Case