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Last month the NAIC Capital Markets Bureau issued a Special Report finding that despite an in increase in the number of private equity (“PE”) owned U.S. insurers, investment volume held by PE-owned insurers declined as of year-end 2021.  The NAIC Special Report is timely coming off a Senate Banking Committee hearing earlier in the month in which some members expressed concern at the rapid expansion of PE firms into the insurance space, particularly through M&A activity.  Some members have expressed concern that PE firms are less risk-averse than traditional insurance companies.…

Issues to Watch

  1. Causation—What is an insured’s burden when the claimed loss involves a mix of covered and non-covered causes? Overstreet v. Allstate Vehicle & Prop. Ins. Co., No. 21-10462, 2022 WL 1579278 (5th Cir. May 19, 2022). This case involves a claim to replace a leaky roof. The insured claimed that the roof leaks were caused by a hailstorm, but the insurer determined that the leaks were due to uncovered causes, including wear and tear along with damage from prior hailstorms.

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Michael Humphreys, the Pennsylvania Insurance Department’s Chief of Staff, has been named the acting Pennsylvania Insurance Commissioner following the departure of Insurance Commissioner Jessica Altman on February 25th.  Mr. Humphreys was previously the Assistant Commissioner of Tennessee Department of Commerce and Insurance.  He has also held various positions within the insurance industry.

https://www.governor.pa.gov/newsroom/insurance-commissioner-jessica-altman-to-depart-wolf-administration/…

The National Association of Insurance Commissioners’ (“NAIC”) Macroprudential Working Group (“MWG”) is reviewing the influence that private equity firms have over the insurance industry. The MWG has recently  approved a list of “regulatory considerations” that the MWG will be reviewing and considering.  The list can be found here, and the MWG’s comments can be found here.…

In 1990, the Second Circuit in Bellefonte Reinsurance Co. v. Aetna Casualty & Surety Co., 903 F.2d ‎‎910 (2d Cir. 1990), affirmed a District Court judgment that reinsurers were not obligated to pay ‎additional sums for defense costs over and above the limits of liability specified in a facultative ‎reinsurance certificate. Since then, the Bellefonte rule acted as a de facto cap for both indemnity and ‎expense under a facultative certificate. This issue of ‘limits’ had been hotly contested, and Bellefonte ‎seemed to put it to rest. ‎…

The global reinsurance landscape is an interconnected, intertwined marketplace that continues to grow and evolve. As insurance companies, agencies, program administrators and other industry actors continue to expand their creative horizons and develop innovative insurance products, the need for reinsurance coverage has accelerated as well.…

On May 12, 2021, Washington’s legislature passed into law Senate Bill 5315, which implements a registration requirement and a tax on captive insurers operating in Washington. Although Washington does not license captive insurers, this new legislation now recognizes the concept of “eligible” captive insurers operating in the state but located in other jurisdictions.…