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Greetings, The February 2009 issue of FORC Alert is now available. We hope you find this information useful. If you have interested colleagues, please forward to them a link to the publication. Best regards, Kevin G. Fitzgerald Sign up to receive FORC Alerts (and Journals) via email.
New Arizona Governor - Former Arizona Secretary of State, Janice ("Jan") Brewer, was recently sworn in as the Governor of Arizona to replace Janet Napolitano. Janet Napolitano was tapped by President Obama to serve as the Secretary of the Department of Homeland Security. Jan Brewer will serve Ms. Napolitano's remaining term which ends in the 2010 election cycle. Arizona agency heads are appointed by the Governor; however, Director Christina Urias has several years remaining on a fixed term. Kathy A. Steadman, Esq. - HENNELLY & STEADMAN PLC, (602) 230-7000, kas@hslaw-az.com
Connecticut Issues Rebating Bulletin - The State of Connecticut Insurance Department (the “Department”) recently issued Bulletin S-12 (the "Bulletin") stating that de minimis gifts not exceeding $15 in aggregate value per year are permissible under Connecticut’s anti-rebating statute, Conn. Gen. Stat. § 38a-825. Any gifts that exceed the $15 limit, however, are seen by the Department as an unlawful inducement to insurance within the meaning of Conn. Gen. Stat. § 38a-825. Further, the Bulletin states that the terms “gift,” “valuable consideration,” “benefit,” “special favor,” “rebate,” “inducement” or other similar terms include, but are not limited to, cash, gift certificates, merchandise, services not directly related to insurance, meals, entertainment or reduced insurance premiums offered or given by an insurer or producer and relating to the insurer/insured or producer/client relationship. Michael T. Griffin, Esq. - Edwards Angell Palmer & Dodge LLP, (860) 541.7764, mgriffin@eapdlaw.com and Alan J. Levin, Esq. - EDWARDS ANGELL PALMER & DODGE LLP, (860) 541-7747, alevin@eapdlaw.com
What Should Be the Starting Point? - We've talked before about the U.S. Treasury Department's Financial Services Blueprint issued in March of 2008 as being a starting point for how financial services should be regulated in the 21st Century. Three other studies came out in January that the Congress and Administration will be looking at, although both touch on insurance only passingly. The first is a Report by the United States Government Accountability Office, "A Framework for Crafting and Assessing Proposals to Modernize the Outdated U.S. Financial Regulator System." You can access a copy by clicking here. The second is "Financial Reform – A Framework for Financial Stability" by the influential Group of Thirty headed by Paul A. Volcker. That report can be obtained by clicking here. Finally, the Congressional Oversight Panel issued its "Special Report on Regulatory Reform: Modernizing the American Financial Regulatory System: Recommendations for Improving Oversight, Protecting Consumers, and Ensuring Stability" pursuant to Section 125(b)(2) of Title I of the Emergency Economic Stabilization Act of 2008, Pub. L. No. 110-343. You can find this by clicking here. Charles T. Richardson, Esq. - BAKER & DANIELS LLP, (202) 312-7487, crichardson@bakerd.comSEC Takes on Equity-Indexed Annuities - On December 17, the Securities and Exchange Commission approved new Rule 151A, which includes equity-indexed annuities within the SEC's definition of a "security," focusing on the investment risk associated with such products. Parts of this decision were controversial, with key Democrats calling for greater regulation, which could be affected by an SEC with Obama appointees. More than 4,800 comments were filed with the SEC, most, including industry and state insurance regulators, opposing the change. The new definition applies only to equity-indexed annuities issued on or after January 12, 2011. Charles T. Richardson, Esq. - BAKER & DANIELS LLP, (202) 312-7487, crichardson@bakerd.comThe End of Reinsurance as We Know it? -
Charles T. Richardson, Esq. - BAKER & DANIELS LLP, (202) 312-7487, crichardson@bakerd.com
The Florida “Homeowner’s Bill of Rights” - Florida passed Senate Bill 2860, entitled the “Homeowner’s Bill of Rights Act,” designated as Chapter No. 2008-66, and codified at various sections in chapters 215, 624, 626, and 627, Florida Statutes. This bill includes many provisions, covering an extensive range of insurer conduct, rate regulation and appeal, and a host of other issues. For example, the bill affects: Florida’s Insurance Capital Build-Up Incentive Program, notice to the Office of Insurance Regulation before nonrenewing more than 10,000 policies within a 12-month period, payment of undisputed claim amounts, the Office authority to order an insurer to file its claims handling practices and procedures as a public record, the state’s prohibition on “use and file” property insurance rate filings, Florida’s rate filing arbitration statute, hearing processes for rate filings, the use of models approved by the Florida Commission on Hurricane Loss Projection Methodology, the Office’s development of a proposed method for insurers to establish windstorm mitigation premium credits (discounts), Florida’s freeze on rate increases by Citizens Property Insurance Corporation, assessments for Citizens deficits, the Public Hurricane Loss Model, multi-policy discounts, and transparency in rate regulation. Some provisions of this Act become effective during 2009, while other provisions will implement at later dates. A. Kenneth Levine, Esq. - DUNLAP SHIPMAN, P.A., (850) 385-5000, ken@dunlapshipman.comFlorida Regulator Approves Workers' Comp Rate Hike - Florida Insurance Commissioner Kevin McCarty recently approved a rare mid-cycle 6.4% workers' compensation rate increase. Florida is an administered pricing state. NCCI had requested an 8.9% increase to reflect the anticipated first year effects of a recent Florida Supreme Court decision which gutted certain restrictions on claimants' attorneys fees. See Murray v. Mariner Health, 994 So. 2d 1051 (Fla. 2008). Thomas J. Maida, Esq. - FOLEY & LARDNER LLP, (850) 513-3377, tmaida@foley.comFlorida Cabinet Finalizes Various Insurance-Related Rules At January 13 Meeting; OIR Solvency Regulation Presentation - At the January 13, 2009 Florida Cabinet meeting, the following proposed insurance-related Rules were adopted:
FHCF Data Call To Support Mitigation Credits in Ratemaking; 2009-2010 FHCF Reimbursement Contract & Premium Formula Approved - At its January 13, 2009 meeting, the Florida Hurricane Catastrophe Fund Advisory Council approved various items relating to the 2009/2010 FHCF Reimbursement Contract, Data Call and supporting Rules. Of particular interest, the Advisory Council approved a motion to notify insurers that information contained in the next FHCF data call would be used to evaluate mitigation features and credits in the FHCF ratemaking process. The FHCF plans to expand its rating classifications to include mitigation features. The Florida Cabinet approved the 2009-2010 FHCF Reimbursement Contract and Premium Formula Rules on January 27, 2009. Fred E. Karlinsky, Esq. - COLODNY, FASS, TALENFELD, KARLINSKY & ABATE, P.A., (954) 492-4010/(954) 332-1749, fkarlinsky@cftlaw.comFlorida Insurer Exemption From Motor Vehicle Records Confidentiality Could Sunset in 2009 - In an Interim Project Report released on December 29, 2008, the Florida Senate Committee on Transportation recommended the re-enactment of the State's exemption of certain confidential personal records held by the Florida Department of Highway Safety and Motor Vehicles that would otherwise be subject to open government requirements. Personal information includes, but is not limited to, a driver’s social security number, driver’s license number or identification card number, name, address, telephone number, medical or disability information, and emergency contact information. Florida law contains numerous exceptions, including an exemption for use of any of the aforementioned information by any insurer or insurance support organization, or by a self-insured entity, or its agents, employees, or contractors, in connection with claims investigation activities, anti-fraud activities, rating, or underwriting. This, and other exemptions will sunset unless they are saved from repeal during Florida’s 2009 Legislative Session. To read the complete Report, click here. Fred E. Karlinsky, Esq. - COLODNY, FASS, TALENFELD, KARLINSKY & ABATE, P.A., (954) 492-4010/(954) 332-1749, fkarlinsky@cftlaw.comFlorida Developmental Disabilities Compact Workgroup Adopts Proposal - Florida Deputy Insurance Commissioner Mary Beth Senkewicz announced on December 17, 2008 that the Florida Office of Insurance Regulation’s Developmental Disabilities Compact Workgroup has adopted a compact that will extend benefits to persons with all developmental disabilities, not just individuals with autism. Insurance companies, HMOs and employers now must determine whether they will sign the new compact and offer the additional coverage for all persons with developmental disabilities or limit benefits to only persons with autism spectrum disorder, as mandated by Section 627.6686 of the Florida Statutes. If insurers, HMOs and employers do not sign the compact, they still will be required to offer the statutorily mandated coverage, beginning April 1, 2009. Fred E. Karlinsky, Esq. - COLODNY, FASS, TALENFELD, KARLINSKY & ABATE, P.A., (954) 492-4010/(954) 332-1749, fkarlinsky@cftlaw.comAfter State Farm Withdrawal Announcement, Florida Insurance Commissioner Subpoenas State Farm Policyholder Information - On January 29, 2009, the Florida Office of Insurance Regulation issued a subpoena to State Farm Florida Insurance Company (State Farm Florida) requesting detailed information about the company's Florida property insurance policyholders. The request comes in follow-up to, and as part of, the Office of Insurance Regulation's review of the withdrawal plan State Farm Florida submitted Tuesday to withdraw from the Florida property insurance market. Specifically, the subpoena is requesting names, addresses, policy types, policy limits and premium information for each of State Farm's Florida policyholders. Compliance with the subpoena is required by Feb. 9. A detailed chronology of all events associated with recent State Farm issues is available by clicking here. Fred E. Karlinsky, Esq. - COLODNY, FASS, TALENFELD, KARLINSKY & ABATE, P.A., (954) 492-4010/(954) 332-1749, fkarlinsky@cftlaw.com Citizens Mission Review Task Force Delivers Final Report to the Florida Legislature - On Monday, February 2, 2009, the Citizens Property Insurance Corporation ("Citizens") Mission Review Task Force ("Task Force") delivered its Final Report to the Florida Legislature. The Final Report details 14 statutory and three operational changes recommended by the Task Force as a result of its public meetings. Pursuant to Senate Bill 2860, the Task Force was created by Legislators and charged with developing "a report setting forth the statutory and operational changes needed to return Citizens Property Insurance Corporation to its former role as a state-created, non-competitive residual market mechanism." Fred E. Karlinsky, Esq. - COLODNY, FASS, TALENFELD, KARLINSKY & ABATE, P.A., (954) 492-4010/(954) 332-1749, fkarlinsky@cftlaw.comAnnuity Sales Continuing Education To Require New Course Authority - The Florida Department of Financial Services issued a directive to resident life insurance agents detailing continuing education requirement changes regarding suitability of annuity sales to senior citizens. A memorandum from Florida Chief Financial Officer Alex Sink outlines compliance requirements for continuing education in this area. A new course authority, "CE 9911 - Senior Suitability", has been created. Only courses approved with this new course authority number will fulfill the new requirement. Fred E. Karlinsky, Esq. - COLODNY, FASS, TALENFELD, KARLINSKY & ABATE, P.A., (954) 492-4010/(954) 332-1749, fkarlinsky@cftlaw.comFlorida Department of Revenue Insurance Premium Tax Forms Revised - The Florida Department of Revenue adopted Rule 12B-8.003 Tax Statement; Overpayments, which finalizes changes to various used in the administration of the insurance premium tax. The Rule also updates the information on obtaining copies of the forms. To view the list of Forms and the complete Rule text, click here. Fred E. Karlinsky, Esq. - COLODNY, FASS, TALENFELD, KARLINSKY & ABATE, P.A., (954) 492-4010/(954) 332-1749, fkarlinsky@cftlaw.comModeling Info, Estimated Reinsurance Costs Must Be Submitted in Florida OIR Proforma Financial Statements - The Florida Office of Insurance Regulation has advised that, beginning with the assumption scheduled for 2009, companies seeking to assume policies from Citizens Property Insurance Corporation must submit hurricane modeling information, as well as the company's proposed 2009 reinsurance structure and estimated reinsurance costs in its proforma financial statements. It should be ensured that in assumptions, the proforma financial statements contain estimated reinsurance costs for 2009. Fred E. Karlinsky, Esq. - COLODNY, FASS, TALENFELD, KARLINSKY & ABATE, P.A., (954) 492-4010/(954) 332-1749, fkarlinsky@cftlaw.com Mission Review Task Force Recommends Residual Market Changes - A Mission Review Task Force recently considered methods of restoring Citizens Property Insurance Corporation to Florida's property insurance market of last resort. The task force recommends more than a dozen measures to increase writings in the private sector and reduce reliance on Citizens as a primary insurance market. These include gradually increasing Citizens' rates, requiring annual reviews of eligibility, and preventing Citizens from writing insurance on new construction in coastal areas. Travis L. Miller, Esq. - RADEY THOMAS YON & CLARK, P.A., (850) 425-6654, travis@radeylaw.comOIR Issues STOLI Report - The Florida Office of Insurance Regulation has issued a report identify areas of fraud and abuse in the stranger-originated life insurance market. The OIR has been highly critical of STOLI transactions, urging that the transactions are illegal under Florida law and proposing legislation for the upcoming 2009 session. The OIR argues that even when seniors are compensated for participating in the transactions, they are subjected to harms such as exhausting their life insurance purchasing capabilities and incurring unexpected tax liabilities. Travis L. Miller, Esq. - RADEY THOMAS YON & CLARK, P.A., (850) 425-6654, travis@radeylaw.comLegislature to Consider Loss Ratio Guaranty Bill - Bills have been filed in both the Florida House and Senate establishing a presumptive loss ratio guaranty requirement of 85% for lines of insurance such as health and long term care. The bills would make changes to the ratemaking requirements of Section 627.410, Florida Statutes, and related statutes. Travis L. Miller, Esq. - RADEY THOMAS YON & CLARK, P.A., (850) 425-6654, travis@radeylaw.com
Georgia Insurance Commissioner’s Directive Announces that There Is No Formula for Diminution in Value Claims - A recent directive from Georgia Insurance Commissioner John Oxendine notified all automobile insurers operating in the state that the Georgia Insurance Department has not developed or endorsed a method for calculating the diminution in value of an automobile that has been wrecked or damaged and informed them that the formula they use to calculate diminished values is not the definitive calculation of their liability to their policyholders. Instead, insurers must consider multiple sources of information related to the diminution of value, including information provided by the insured. Brian T. Casey, Esq. - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4638, bcasey@lockelord.com and Alexis W. Summers - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4649, asummers@lockelord.comProposed Bill Lowers the Number of Employees Required to Be Covered by Insurance Contracts Held by Private Corporations - Members of the Georgia House of Representatives have proposed a bill that would amend O.C.G.A. §33-24-6 so that a non-publicly owned corporation may insure the health and lives of employees in whom it has an insurable interest so long as the insurance contract covers at least two employees. Under the current statute, private corporations are required to insure at least 100 employees under such a contract. Brian T. Casey, Esq. - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4638, bcasey@lockelord.com and Alexis W. Summers - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4649, asummers@lockelord.comGeorgia Court of Appeals Considers Priority of Uninsured Motorist Coverage Among Multiple Automobile Insurance Policies - The Georgia Court of Appeals recently examined the issue of priority of uninsured motorist coverage among multiple automobile policies under circumstances when multiple automobile policies are available to satisfy an unfulfilled judgment. In this case, the victim was hit by a car and killed, and the driver’s automobile insurance policy did not fulfill the judgment awarded in a law suit brought against him. The victim’s family members, however, held several automobile policies under which coverage for the difference could be claimed. The court used the “most closely identified” test to determine that, based on Georgia inheritance law, the victim was more closely identified with his father’s automobile insurance policy than with a policy initially purchased for his sister but later put in his parents’ names as well. Secondly, the court considered what priority a general umbrella liability insurance policy takes as compared with the other automobile insurance policies for purposes of stacking. Using the same test and reasoning, the court determined that the father’s umbrella liability insurance policy had priority over and above the automobile insurance policy that was in both the father and sister’s names. Progressive Classic Ins. Co. v. Nationwide Mut. Fire Ins. Co., A08A1175, A08A1176 (Nov. 24, 2008). Brian T. Casey, Esq. - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4638, bcasey@lockelord.com and Alexis W. Summers - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4649, asummers@lockelord.comHomeowner’s Insurance Carriers Have a Duty to Defend Policyholders when Factual Issue Remains as to whether Insured’s Actions Were Criminal or Intentional - A recent ruling from the Georgia Court of Appeals makes it clear that homeowner’s insurance carriers have a duty to defend a policyholder when a factual issue remains as to whether the insured’s actions were either criminal or intention and, thus, excluded from coverage under the policy. Further, the carrier could be required to cover the costs of any punitive damages awarded unless its policy expressly excludes them from coverage. Nationwide Mut. Fire Ins. Co. v. Kim, A08A1063, A08A1064, A08A1065 (Nov. 14, 2008). Brian T. Casey, Esq. - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4638, bcasey@lockelord.com and Alexis W. Summers - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4649, asummers@lockelord.comNo Reimbursement for Attorneys’ Fees and Expenses from Plaintiff’s Own Automobile Insurance Carrier unless Policy so Provides - A plaintiff cannot obtain coverage for attorneys’ fees and expenses from the uninsured motorist coverage provided by his automobile insurance carrier unless the policy so provides, according to a recent ruling from the Georgia Court of Appeals. In this case, the defendant’s insurer had paid the maximum amount of its liability to the plaintiff, so the plaintiff sought attorneys’ fees and expenses from his own automobile insurance carrier based on his belief that the defendant had been stubbornly litigious. The court held that Georgia’s uninsured motorist statute does not provide coverage for claims of attorneys’ fees and expenses based on the tortfeasor’s actions, and nothing in the plaintiff’s insurance policy provided for this coverage. As a result the plaintiff was not entitled to these fees and expenses. Smith v. Stoddard, A08A1189 (Nov. 19, 2008). Brian T. Casey, Esq. - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4638, bcasey@lockelord.com and Alexis W. Summers - LOCKE LORD BISSELL & LIDDELL LLP, (404) 870-4649, asummers@lockelord.com
Potential Release of Confidential Information of Insurers Doing Business in Louisiana - The Louisiana Department of Insurance ("LDOI") has recently sent out a communication to a number of insurance companies doing business in Louisiana, informing those insurers of a possible release of confidential, privileged or proprietary information. The Louisiana Legislative Auditor ("LLA") is currently seeking access to possibly confidential electronic records held by the LDOI as part of an ongoing audit of the LDOI. The LDOI indicated that confidential, privileged or proprietary information may be released to the LLA in the course of the audit, and suggested that insurers objecting to such release file appropriate pleadings in the ongoing dispute between the LDOI and the LLA. That litigation, Louisiana Department of Insurance through James J. Donelon, Commissioner of Insurance vs. Steve J. Theriot, CPA Legislative Auditor et al., is currently pending in the Nineteenth Judicial District Court for the Parish of East Baton Rouge, State of Louisiana, suit number 572609. Generally, information obtained by the LLA in the course of an audit is confidential under applicable law, except to the extent that such information is determined to be material to the purposes of the audit and included in the audit findings. Additionally, the LLA’s workpapers relating to an audit are generally not part of the public record. Van R. Mayhall, III - Breazeale, Sachse & Wilson, LLP, (225) 381-3169, vm@bswllp.com and Van R. Mayhall, Jr., Esq. - BREAZEALE, SACHSE & WILSON, L.L.P., (225) 381-8009, vrm@bswllp.com
Governor Asks for Rate Freeze, Insurance Advocate Pushes Reforms - In her State of the State address, Michigan Governor Jennifer Granholm called upon auto insurance companies to freeze rate increases for 12 months, while the Legislature enacts comprehensive insurance reform. Michigan’s new Office of the Insurance Consumer Advocate also released a report claiming that Michigan citizens pay among the highest rates in America for auto insurance. The report recommends reforms to the no-fault insurance law (MCL 500.2101-2138), including giving the Insurance Commissioner more authority to review rates and order refunds, banning the use of credit scores and occupation for setting rates, and changing the legal definition of "affordability" in Michigan law. Legislators are beginning a new session and have already introduced several bills to enact these reforms. Stephen H. Zimmerman, Esq. - DYKEMA GOSSETT, P.L.L.C., (517) 374-9195, szimmerman@dykema.com and Adam W. Reames - Dykema Gossett PLLC, 517.374.9187, areames@dykema.com
New Director of the Missouri Department of Insurance, Financial Institututions and Professional Registration - John M. Huff has been named by newly elected Governor Jay Nixon to take over as the Director of the Missouri Department of Insurance, Financial Institutions and Professional Registration. Mr. Huff is coming to Missouri from Swiss Re where he most recently served as global head of Key Case Management. Mr. Huff is a 1990 graduate of the Washington University School of Law. Ann Monaco Warren, Esq. - INGLISH & MONACO, P.C., (573) 634-2522, awarren@inglishmonaco.com
Legislation - The 2009 Regular Session of the Mississippi Legislature convened January 6, 2009. Insurance legislation being considered includes prohibiting the Commissioner of Insurance from receiving campaign contributions from insurance companies, interstate product regulation compact, homeowner insurance policyholder bill of rights, prohibiting ACC clauses, revisions to laws that regulate stacking of uninsured motorist coverage, various mandated health benefits and health care reform. Robert B. House, Esq. - WATKINS LUDLAM WINTER & STENNIS, P.A., (601) 949-4830, rhouse@watkinsludlam.com and David L. Martin, Esq. - WATKINS LUDLAM WINTER & STENNIS, P.A., (601) 949-4901, dmartin@watkinsludlam.comFederal District Court Affirms Bankruptcy Court Dismissal of Chapter 15 Adversary Proceeding - On February 9, 2009,the United States District Court for the Southern District of Mississippi affirmed the Bankruptcy Court's dismissal of an adversary proceeding filed in the Chapter 15 proceeding of Condor Insurance Limited (In Official Liquidation), Case No. 07-51045. Although insurers are generally barred from seeking relief under the Bankruptcy Code, Chapter 15 constitutes a limited departure from this bar by permitting certain foreign insurance companies to be eligible for Chapter 15 relief in United States bankruptcy courts. In the Condor Insurance Limited case, the foreign representatives filed a Chapter 15 case for the Nevis-based insurer and then sued various entities to avoid alleged pre-petition transfers of property. The foreign representatives did not seek relief under Bankruptcy Code avoidance provisions; instead, they based their request for relief on the law of the country that had placed the insurer in liquidation. In what appears to be a case of first impression, the District Court agreed with the Bankruptcy Court that the relevant Chapter 15 statutes prohibit a bankruptcy court from hearing avoidance actions - whether based on United States law or foreign law - in a Chapter 15 context. For more information, see Chapter 15 - Bankruptcy Code Application to Insurers, FORC Journal, Winter 2008. Robert B. House, Esq. - WATKINS LUDLAM WINTER & STENNIS, P.A., (601) 949-4830, rhouse@watkinsludlam.com, David L. Martin, Esq. - WATKINS LUDLAM WINTER & STENNIS, P.A., (601) 949-4901, dmartin@watkinsludlam.com and Jeffrey R. Barber, Esq. - Watkins Ludlam Winter & Stennis, P.A., (601) 949-4765, jbarber@watkinsludlam.comCourt Rejects Attorney General Hood's Post-Katrina Attempt To Invalidate Homeowner Insurance Provisions - On December 22, 2008, the Rankin County Chancery Court dismissed a lawsuit filed by Mississippi Attorney General Jim Hood against several major property and casualty insurers. The lawsuit sought to invalidate water damage and anti-concurrent causation provisions of standard homeowners insurance policies. Hood argued that the policy provisions were unconscionable, against public policy and ambiguous, and in violation of the unfair trade practices act. Hood filed the lawsuit on September 15, 2005, immediately after Hurricane Katrina made landfall on August 29. In addition to rejecting Hood's claims, the Court held that Hood had no authority, or "standing", to challenge private insurance contracts to which neither the State of Mississippi nor any state agency is a party. The Court reasoned that Hood was "acting under the guise of ‘public' interest, but [was] actually attempting to litigate local, private interests by means of a de facto class action not permitted under Mississippi law." Robert B. House, Esq. - WATKINS LUDLAM WINTER & STENNIS, P.A., (601) 949-4830, rhouse@watkinsludlam.com and David L. Martin, Esq. - WATKINS LUDLAM WINTER & STENNIS, P.A., (601) 949-4901, dmartin@watkinsludlam.comPolicyholder Bill of Rights - Commissioner of Insurance Mike Chaney promulgated amendments to Regulation 2007-1, Mississippi Homeowner Insurance Policyholder Bill of Rights, setting forth additional procedures and requirements to ensure that policyholders understand their rights as a homeowners personal lines residential property insurance policyholder in Mississippi. Effective for policies issued on or after September 1, 2009, a copy of the expanded Policyholder Bill of Rights must be included with the policy. Additionally, the amendments include in the regulation reference to Leonard v. Nationwide Mutual Ins. Co., 499 F.3d 419 (5th Cir. 2007) regarding the burden of proof that a particular peril falls within a policy exclusion. The amendments are scheduled to become effective March 13, 2009. Robert B. House, Esq. - WATKINS LUDLAM WINTER & STENNIS, P.A., (601) 949-4830, rhouse@watkinsludlam.com and David L. Martin, Esq. - WATKINS LUDLAM WINTER & STENNIS, P.A., (601) 949-4901, dmartin@watkinsludlam.com
New York Insurance Department Provides Guidelines for Treatment of Collateral Held by an Insurer in Liquidation or Rehabilitation - The Office of General Counsel of the New York Insurance Department has issued an Opinion Letter stating that "in situations where there is a bona fide agreement between a policyholder and an insurer that specifically characterizes an asset as collateral and not part of the general assets of the insurer, such collateral will not be included in the general assets of the insurer's estate in liquidation or rehabilitation." The opinion letter addresses insurance programs, particularly workers' compensation programs with large deductibles, which require the insured to deposit collateral with the insurer as security for performance by the insured of its payment obligations. William K. Broudy, Esq. - NELSON LEVINE de LUCA & HORST, LLC, (212) 233-3254, wbroudy@nldh.com and Francine L. Semaya, Esq. - NELSON LEVINE de LUCA & HORST, LLC, (212) 233-0130, fsemaya@nldhlaw.com
Amendments to Insurance Regulation 11 Re: Surplus Lines Brokers - Insurance Regulation 11 governing surplus lines brokers was recently amended to comply with legislative amendments to Rhode Island's statute relating to surplus lines brokers (RI Gen. Laws § 27-3-38) by: 1) eliminating the requirement that surplus lines affidavits be filed with the Rhode Island Department of Business Regulation; 2) requiring the filing of an annual report by April 1 identifying the total number of policies and premium issued in the preceding calendar year, begining on April 1, 2010; 3) allowing the electronic processing of surplus lines affidavits; 4) allowing records to be retained electronically; and 5) clarifying that broker records be retained in accordance with Insurance Regulation 67 governing market conduct examinations. The amended regulation became effective December 15, 2008. John J. Partridge, Esq. - PARTRIDGE SNOW & HAHN LLP, (401) 861-8200, jjp@psh.com, Jennifer R. Cervenka, Esq. - PARTRIDGE SNOW & HAHN LLP, , jrc@psh.com and Melissa E. Darigan, Esq - PARTRIDGE SNOW & HAHN LLP, , med@psh.com |
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