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On 29 October 2010, the Law Commission published an Issues Paper on whether the requirement for a formal marine policy under section 22 of the Marine Insurance Act 1906 should be repealed. Section 22 states that a contract of marine insurance will be inadmissible in evidence unless it is “embodied in a marine policy“. …
Read More UK: Law Commission Publishes Issues Paper 9 Proposing Repeal of the Need for a Formal Marine Policy

The FTC “Red Flags Rule” mandating identity theft protection programs for financial institutions and a broad range of other companies will go into effect December 31, 2010. Red Flags are warning signals that should alert a business to the risk of identity theft. …
Read More The FTC’s Red Flags Rule on Identity Theft Protection Will Be Effective December 31, 2010

Underwriters can be ordered to disclose documents related to an application against them for a third party costs order under the Senior Courts Act s.51(3). In Owners and/or Demises Charterers of the Dredger Kamal XXIV v Owners of the Ship Ariela and Ors [2010] EWHC 2531 (Comm), the underwriters had been used by the insured as part of the mechanism for achieving fraud and under the circumstances it was held that a disclosure order was appropriate. …
Read More UK: Underwriters Obliged to Disclose Confidential Documents Following Fraud by Third Party

R&Q Reinsurance Co. v. American Motorist Ins. Co., involved a dispute arising under a series of reinsurance treaties entered into by the parties.  Pursuant to the arbitration clauses in the treaties, their dispute was heard by a panel of arbitrators, which issued its “Final Award” on February 5, 2010. …
Read More Illinois Federal Court Rules that Reinsurer’s Motion to Vacate Arbitration Award is Untimely Under the Federal Arbitration Act

On October 21, 2010, the Executive and Plenary committees of the National Association of Insurance Commissioners (“NAIC”) voted to adopt a model regulation containing the definitions and methodologies for calculating medical loss ratios as stipulated under the Patient Protection and Affordable Care Act (“PPACA”).  The model was delivered to Health and Human Services (“HHS”) on October 27, 2010 for certification. …
Read More NAIC Adopts Model Regulation for Final Medical Loss Ratios

In Travelers Casualty & Surety Co. v. Insurance Co. of North America, Nos. 06-4100, 06-4101 and 08-1032 (2010), the U.S. Court of Appeals for the Third Circuit affirmed the District Court’s decision holding that a cedent’s settlement allocation was reasonable and binding on the reinsurer, except for the portion of the allocation that was based upon annualized per-occurrence limits for multi-year policies. …
Read More Third Circuit Rules that Follow the Fortunes Doctrine Binds Reinsurer to Part, But Not All, of a Cedent’s Post-Settlement Allocation

We previously blogged about the District of Connecticut’s decision in Arrowood Surplus Lines Ins. Co. v. Westport Ins. Corp., No. 08-cv-1393 (D. Conn. 2010), in which the court held that a reinsurer had no duty to honor the portion of a cedent’s loss that was outside the scope of the reinsurance agreement at issue.  In that case, Equity Residential argued that a policy issued to it by Arrowood Surplus Lines Insurance Company had a three-year period and sought coverage for losses that occurred from December 15, 1999 to December 15, 2002.
Read More Second Circuit Finds that Portion of Cedent’s Loss is Outside the Scope of the Reinsurance Agreement, Relieving Reinsurer of any Obligation to Follow the Fortunes