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In Jackson v. Farmers New World Life Ins. Co., the United States District Court for the Eastern District of Oklahoma ruled that the insurer did not act in bad faith or breach its contractual duty when it rescinded a $150,000 non-smokers life insurance policy after discovering that the insured was, in fact, a smoker. …
Read More Court Upholds Insurer’s Decision to Deny Benefits to Smoker’s Widow

The Internal Revenue Service recently approved a rule that would permit taxpayers with defective drywall in their houses to deduct the cost of repairs and replacement of damaged appliances.  Under the new rule, taxpayers can deduct drywall related “casualty losses” in the year in which the loss occurs, as long as those losses are not compensated by insurance or other sources. …
Read More Chinese Drywall – IRS Approves Tax Break for Chinese Drywall Remediation

On November 2, 2010, registered voters in the State of Washington will consider Initiative 1082 (“I-1082”) when they cast their ballots in this year’s election cycle.  I-1082 would allow for the privatization of workers’ compensation insurance, which currently is only available through the Washington Department of Labor and Industries (the “L&I”).  Washington is one of four states that maintain a government monopoly on workers’ compensation insurance. …
Read More Washington To Vote On Elimination Of Workers’ Compensation Monopoly

In its quarterly Regulatory Update, released October 21, 2010, the Bermuda Monetary Authority (“BMA”) summarizes its latest initiatives and proposals for the island’s insurance industry.  A consultation paper titled, “A Solvency Framework for Long-Term Insurance,” proposes assigning Long-Term insurers to captive and commercial classes in order to enhance reporting and solvency standards. …
Read More The Bermuda Monetary Authority Publishes Regulatory Update for October 2010

Kenneth Feinberg, Administrator of the Gulf Coast Claims Facility (“GCCF”), announced that geographic proximity to the BP Deepwater Horizon incident would not preclude a legitimate individual or business claim.  Mr. Feinberg stated, “I have heard from elected officials in Florida, including Governor Crist, Attorney General McCollum, CFO Sink and others, about their concerns regarding Floridians’ proximity to the spill and how, regardless of distance, there has been economic impact beyond the areas closest to the spill. …
Read More BP Deepwater Horizon: Geographic Test to Determine Claim Eligibility Deemed Unwarranted

In Johnson v. Gruma Corp., No. 08-56911 (9th Cir. 2010), the Ninth Circuit Court of Appeals – applying the California Arbitration Act (“CAA”) in lieu of the Federal Arbitration Act (“FAA”) – affirmed a District Court decision refusing to vacate an arbitration award on the ground that the arbitrator failed to disclose his wife’s former professional relationship with the law firm ultimately retained to represent the respondent in the arbitration. …
Read More Ninth Circuit Finds That Parties Agreed to Apply the Arbitrator Disclosure and Vacatur Standards of the California Arbitration Act, Not the FAA

EAPD is hosting a complimentary webinar on Thursday, October 28, 2010 on the government investigations of lenders’ foreclosure practices.  Please click here to register for this one hour program to learn more about what the exposure implications are for financial institutions. …
Read More The Brewing Foreclosure Crisis – An EAPD Complimentary Webinar

The U.S. District Court in Manhattan recently dismissed a securities class action brought by a proposed class of investors, alleging that the company and two of its senior officers violated Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and SEC Rule 10b-5 by making false or materially misleading disclosures about the company’s risk management and exposure to mortgage-related securities. …
Read More District Court Dismisses Subprime Class Action Case With Prejudice