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ISSUES REGARDING THE DISCONTINUATION OR WITHDRAWAL OF BUSINESS FROM THE INSURANCE MARKETPLACE
Cynthia J. Borrelli, Esq. Since the early 1990s, most states have adopted either statutes, regulations, bulletins or so-called "desk shelf rules which regulate the anticipated withdrawal of a product, line or subline of insurance business from the insurance marketplace. What constitutes a "withdrawal" or its equivalent under each state's statutory or regulatory scheme is critical in determining the amount of red tape which an insurer must endure before consummating what was once considered a "routine business transaction." The laws differ vastly by state as is evident from the discussions below. Although this article primarily focuses upon relevant New Jersey laws, reference is made to similar laws in various other jurisdictions, both by way of comparison and example.
ARIZONA'S MANAGED CARE ACCOUNTABILITY ACT: MEANINGFUL REFORM OR COSTLY REGULATION?
J. Michael Low, Esq. Charles R. Bassett, Esq. The Arizona Legislature recently concluded its 44th Legislature, Second Regular Session. One of the major pieces of legislation enacted was H.B. 2600, the Managed Care Accountability Act.
WAITING FOR THE SECOND COMING (OF S.B. 956 IN TEXAS)
Jeff W. Autrey, Esq. Historically, Texas agent licensing laws (life and property/casualty) have discriminated against three potential competitors of the local independent agent (non-resident agents, corporations and financial institutions) by prohibiting them from obtaining a license altogether or restricting the scope of the license available to them. A chain of events since the Supreme Court decided Barnett Bank in April 1996 is moving Texas' once restrictive agent license laws, slowly, but inexorably, to the point where non-resident agents, corporations and banks may obtain life, accident and health ("LAH") and property and casualty ("P&C") agent licenses on an equal footing with resident individuals and their wholly-owned, licensed corporations. A bill enacted by the 76th Legislature in the 1999 Regular Session, S.B. 956, would have addressed all of these differences. The bill, however, was vetoed by Governor George W. Bush at the last minute, throwing Commissioner Jose Montemayor's efforts to comply with the coming reciprocity requirements of financial services reform into chaos.
INSURERS OPERATING UNDER ASSUMED OR FICTITIOUS NAMES: WHEN, HOW AND ... WHAT?!
Joseph C. Branch, Esq. Trust Insurance Company ("Trust") wishes to obtain a certificate of authority to sell insurance in California. Trust learns it must first submit an application with the California Insurance Commissioner seeking and obtaining approval of its corporate name before it can do business in California under that name. Trust complies, but is informed by the Commissioner's office that it will reject the Trust name because it is too similar to a name already in use by another entity, Trustworthy Insurance Company. The Commissioner's office suggests that Trust adopt a fictitious or "operating name " for its California operations. Trust is warned, however, that every activity it engages in which directly or indirectly reaches the California public must be done only in the fictitious name. Trust is unsure of the full implications of this suggestion and calls for your advice and representation. What do you counsel?
INSURANCE ASSUMPTION TRANSACTIONS
William J. Toman, Esq. Transactionsin which one insurer assumes liability for some or all of the insurance in force of another insurer are quite common. While often referred to as bulk or assumption "reinsurance" transactions, this terminology tends to blur the distinction between assumptions, where the assuming company becomes directly liable to the insured, and "true" indemnity reinsurance, where the assuming company is liable only to the ceding company. |
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