In a reversal of its previous position, the New York Insurance Department (the “NYID”) announced yesterday that it would regulate, as insurance, certain credit default swap contracts.  The new rules, which go into effect in January 2009, would cover CDS contracts bought by investors that also own the actual bonds or loans referenced by the swaps.  The change would require institutions selling such contracts to be licensed as insurance companies.  However, “naked swaps,” where the buyer or investor does not own the underlying bond, would remain free from regulation as insurance. …
Read More New York to Regulate Certain Credit Default Swaps As Insurance

As previously reported here, the former CEO of Brocade Communications Inc., Greg Reyes, was sentenced to 21 months in prison and ordered to pay a $15 million fine in the first criminal trial to arise out of the stock options backdating scandal. Reyes has appealed the verdict. 

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Read More Former Brocade CEO Sues Brocade Over Options Backdating Legal Fees

Mr McCreevy noted in a recent speech to the EUROFI Conference in Nice, that discussions on the proposed Solvency II Framework Directive have been progressing at an impressive rate in both the European Council and Parliament. 

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Read More EU/UK: Commissioner for Internal Markets, Charlie McCreevy, Updates the Market on Solvency II

As reported in our previous blog, the FSA has been focusing on the application of the Unfair Terms in Consumer Contracts Regulations (the Regulations) to consumer insurance policies and recently issued a statement regarding the use of the phrase “consequential loss” in consumer policy wordings (see: UK: FSA Published Statement Regarding Use of the Term “Consequential Loss”). …
Read More UK: FSA Obtains Undertaking from UK Insurance Limited in Relation to its Contracts for Travel Insurance Containing the Phrase “Consequential Loss”

A petition for damages recently filed in the Circuit Court of Missouri, St. Louis County, alleges that Doe Run Resources Corporation, one of the world’s largest lead producers, its related entities, and six Doe Run officers and directors released lead and other toxic substances from the company’s metallurgical complex in Peru, injuring numerous children. 

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Read More Petition Filed Against U.S. Natural Resources Company Accusing the Company and Certain Officers and Directors of Causing Injury to Peruvian Children

According to media reports, American International Group (AIG) is considering selling some or all of its Brazilian holdings as part of its strategy to repay the recent loan from the Federal Reserve Bank of New York. …
Read More Reports: AIG Considering Selling Brazilian Assets

On September 17, House of Representatives Speaker Nancy Pelosi (D-Ca.) removed H.R. 5840 from the legislative calendar.  As previously discussed here, the legislation would establish a federal Office of Insurance Information. 

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Read More House Removes H.R. 5840 from Consideration; Passes NARAB

As previously reported here, the National Flood Insurance Program (“NFIP”) is due to expire at the end of this month.  With the House of Representatives and Senate still at odds over key provisions, Rep. Barney Frank (D-MA) has introduced a bill, H.R. 6965, which would temporarily extend the NFIP for an additional seven months. …
Read More Congress Still Unable to Agree on NFIP, Considers Short-Term Extension

In an effort to aggressively counter the recent market crisis, the United States Securities & Exchange Commission and United Kingdom’s Financial Services Authority announced today that they have temporarily banned all short-selling in financial companies. …
Read More BREAKING NEWS: SEC AND FSA Ban Short-Selling in Financial Companies