Excess and Surplus Lines

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On July 28, 2011, the U.S. House of Representatives Subcommittee on Insurance, Housing and Community Opportunity (subcommittee of the Committee on Financial Services) held a hearing entitled “Insurance Oversight: Policy Implications for U.S. Consumers, Businesses and Jobs.”  Committee members heard from state regulators, as well as various industry executives, a consumer advocate and others, regarding topics spanning from systemic risk in the insurance sector to reform in the producer licensing system.
Read More House Committee Holds Hearing: “Insurance Oversight: Policy Implications for U.S. Consumers, Businesses and Jobs”

The New York State Department of Taxation and Finance issued a memorandum regarding changes to the New York tax laws affecting insurance independently procured from unauthorized insurers in order to conform New York law to the requirements of the Nonadmitted and Reinsurance Reform Act of 2010. …
Read More New Tax Form for Insurance Independently Procured From Unauthorized Insurer in New York

Addressing apportionment issues left unresolved by the California Supreme Court’s decision in Montrose Chemical Corporation v. Admiral Insurance Company, 10 Cal.4th 645 (1995), California’s intermediate appeals court has ruled that an insured that manufactured asbestos-containing products must first exhaust the limits of all of its primary insurance before it may claim benefits under its excess coverage. …
Read More California Court Requires Complete Horizontal Exhaustion of Liability Coverage Before Excess Coverage Can Attach

Just because a series of merger documents assert something to be true does not necessarily make it so, particularly when it comes to insurance coverage.  That was the lesson an excess-layer D&O carrier learned when it attempted to assert insured-versus-insured and fraud exclusions to defeat a claim to policy proceeds by the purchaser of a corporation in Wojtunik v. Kealy, No. 03-cv-02161 (D.Ariz. Mar. 31, 2011).  A copy of the court’s decision is available here. …
Read More Arizona Federal Court Permits Garnishment From Defunct Company’s D&O Insurers

The New York Appellate Division for the First Department recently reversed a decision of a lower court that had granted summary judgment to the plaintiff, an excess insurer, on a count of insurance bad faith against a primary insurer. Federal Ins. Co. v. North Amer. Spec. Ins. Co. et al., Docket No. 603926/05 (N.Y.A.D., 1st Dep’t, April 5, 2011). …
Read More New York Appellate Court Reverses Judgment of Insurance Bad Faith and Remands for Additional Fact-finding

On April 18, 2011, the Superintendent of the New York Insurance Department promulgated the twelfth amendment to Regulation 41 (the “Amendment”).  Pursuant to the Amendment, excess lines insurers obtaining eligibility in New York on or after January 1, 2011 must maintain surplus to policyholders of at least $45,000,000, instead of $15,000,000. …
Read More New York Officially Increases Minimum Surplus Requirement for Excess Lines Insurers

Richard Bouhan, Executive Director of the National Association of Professional Surplus Lines Offices (NAPSLO), recently stated that the National Association of Insurance Commissioners (“NAIC”) is attempting to undercut the surplus lines reforms in the Nonadmitted and Reinsurance Reform Act (the “Act”), which becomes effective on July 21, 2011. …
Read More NAPSLO Questions NAIC ‘s Handling of the Nonadmitted and Reinsurance Reform Act

Unlike other several other states as we reported here, New York has enacted legislation as part of its budget bill that does not authorize the state to enter into the Surplus Lines Insurance Multi-State Compliance Compact (“SLIMPACT”), or any other surplus lines tax allocation compact.  SLIMPACT is an interstate compact that is designed to, among other things, allow for the adoption of uniform standards across participating compact states and uniform tax allocation formulas on multi-state risks. …
Read More New York Rejects SLIMPACT