New York Developments

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The New York Department of Financial Services (“DFS”) issued a circular letter on December 19, 2011 (the “Circular Letter”) emphasizing the importance of risk management and indicating that the DFS expects every insurer to adopt a formal enterprise risk management (“ERM”) function.  The ERM function should identify and manage risk exposures to the insurer within a group enterprise or at the company level when the insurer is a stand alone enterprise. …
Read More New York Issues Circular Letter Regarding Enterprise Risk Management

An inquirer recently asked the New York Department of Financial Services Office of General Counsel (the “OGC”) whether (1) lunch bought for an insurance producer by an insurer qualifies as compensation to be disclosed under Regulation 194 (effective January 1, 2011); and (2) if it qualifies, how should an insurer maintain a record of the cost of that lunch when multiple producers are present at the lunch, but only one is the binding producer?  See N.Y. Dept. of Fin. Serv. Opinion No. 11-08-01 (August 5, 2011). …
Read More Keep Those Power Lunch Receipts; the New York Department of Financial Services May Consider Such Entertainment Expenses as Producer Compensation to be Disclosed

This updates our June 29, 2011 blog posting.

On November 21, 2011, New York Superintendent of Financial Services Benjamin M. Lawsky announced the issuance of regulations (the “Regulations”) for the implementation of the amendments to Article 63 of the New York Insurance Code that created a Class 3 for special risks (also referred to as the “Free Trade Zone”). …
Read More New York Department of Financial Services Issues Regulations for Large Commercial Insureds

On November 3, 2011, the New York Attorney General and the New York State Comptroller announced a joint initiative to investigate possible unpaid life insurance benefits.  Attorney General Eric Schneiderman called the new collaborative effort, “the largest and most comprehensive investigation of life insurance practices in the country.” …
Read More New York Attorney General and Comptroller Launch Joint Investigation into Unpaid Life Insurance Benefits

Please join the U.S. Reinsurance Under 40s Group for a happy hour this Wednesday, October 26, at St. Andrew’s Restaurant and Bar, located at 140 West 46 Street (between 6th and 7th Ave.).  The event will run from 5:30-8:30, and the Group has reserved a private area in the upstairs section of St. Andrew’s. …
Read More U.S. Reinsurance Under 40s Group to Host an Event This Wednesday

In National Union Fire Insurance Co. v. Source One Staffing, LLC, the Supreme Court of New York County was asked to consider the interrelationship of three statutes: the McCarran-Ferguson Act (15 U.S.C. § 1101 et seq.), the Federal Arbitration Act (“FAA”) (9 U.S.C. § 1 et seq.), and the California Insurance Code (Cal. Ins. Code § 11658). …
Read More New York Court Errs in Consideration of Interplay Between California Insurance Code, McCarran-Ferguson, and Federal Arbitration Act

The law firms of Edwards Angell Palmer & Dodge LLP and Wildman, Harrold, Allen & Dixon LLP today announced that they will merge on October 1, 2011 (you can read the press release here).   The new firm, with 13 offices and 650 lawyers, will be known as Edwards Wildman Palmer LLP. …
Read More Edwards Angell Palmer & Dodge and Wildman, Harrold, Allen & Dixon LLP Announce Merger

James Fellus commenced arbitration against his former employer, Sterne, Agee & Leach, Inc. (“SAL”), seeking damages for wrongful termination.  At the close of the arbitration hearing, Fellus submitted an exhibit related to one of the central issues before the panel.  SAL objected to the use of this exhibit, but was overruled.  The arbitrators ultimately issued an award in Fellus’ favor. …
Read More New York Federal Court Finds That Panel’s Refusal to Hear Certain Evidence Does Not Justify Vacating Arbitration Award

International Capital & Management Company arbitrated a dispute against Bear Stearns before the Financial Industry Regulatory Authority (“FINRA”).  International Capital ultimately withdrew its claims in the arbitration, after which the FINRA panel ordered it to pay more than $300,000 of Bear Stearns’ attorneys’ fees related to the withdrawn claims.  International Capital moved to vacate this portion of the panel’s award. …
Read More Arbitrators’ Award of Attorneys’ Fees Upheld

In a 77-page decision handed down this morning, the U.S. Court of Appeals for the Second Circuit vacated the convictions of five former insurance executives whom prosecutors had alleged engaged in a fraudulent reinsurance transaction.  A new trial has been ordered.  United States v. Ferguson, et al., No. 08-6211-cr (L) (2d Cir. Aug. 1, 2011).  A copy of the court’s decision is available here. …
Read More Second Circuit Throws Out Criminal Convictions Stemming From Reinsurance Transactions