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Preview: LexisNexis® Mealey's™ Insurance Regulatory Compliance Legal News

LexisNexis® Mealey's™ Insurance Regulatory Compliance Legal News

Headline Insurance Regulatory Compliance Legal News from LexisNexis®


Hawaii Enacts New Suitability Law To Protect Annuity Purchasers
2007 Hi. ALS 257; 2007 Hi. Act 257, 2007 Hi. S.B. 1008 Suitability In Annuity Transactions Effective Date: Jan. 1, 2008* Full story on

North Dakota Enacts New Law On Viatical Settlement Contracts
N.D. Cent. Code ?? 26.1- 33.3-01-26.1-33.3-17 (2007) Viatical Settlement Contracts Aug. 1, 2007 SUMMARY Full story on

Florida Amends Travel Underwriting Law
Fla. Admin. Code Ann. r. 69O- 125.003 (2007) Unfair Discrimination Because Of Travel Plans Effective Date: November 2007* Full story on

Insurers Raise $5.8 Million To Defeat Washington Treble Damage Law
2007 Wash. S.B. 5726/Referendum 67 Insurance Fair Conduct Act On Ballot: Nov. 6, 2007 Battle lines have been drawn in Washington between insurers and the plaintiffs' bar as both sides square off over the Insurance Fair Conduct Act, which Gov. Chris Gregoire signed into law on May 15. The legislation seeks to make a number of changes to state insurance law and includes a provision that permits triple damages to be imposed against insurers found to have unreasonably denied valid claims. However, a coalition called the Consumers Against Higher Insurance Rates submitted 155,220 petition signatures to put the matter to a public vote in November, and insurers and their lobbying groups are pouring millions into a campaign to defeat this ballot measure. Full story on

Massachusetts Overhauls Private Passenger Auto Insurance Regulations
Mass. Regs. Code tit. 212, ? 2.04 (2007) Procedures For The Conduct Of Appraisals And Intensified Appraisals market parts or parts that are not original equipment manufacturer (OEM) parts in repairs. However, the regulation also mandates that consumers be notified if after market or non-OEM parts are to be included in an appraisal or estimate. A historical dispute exists as to whether non-OEM and after-market parts are equivalent from a safety standpoint to OEM parts, and this regulation is intended to, at the least, alert the consumer to the possibility that these items will be used. The flip side of the issue is that cost savings can be achieved, and if the consumer will recognize any of it, he or she should likewise be alerted to the opportunity. Likewise, because the insurer presumably will recognize a cost savings from the use of after-market parts, the state regulator may consider it in its review of auto rate filings. Full story on

Texas Requires New Verification Forms For Windstorm Inspections
28 Tex. Admin. Code ? 1.5.E.5.4603 (2007) Forms For Windstorm Inspections Effective Date: July 11, 2007 Full story on

New Jersey Rules On Loss Reserve Opinions Reflect NAIC Model
N.J. Admin. Code tit. 11, ? 1- 21 (2007) Loss Reserve Opinions Effective Date: Aug. 6, 2007 Expiration Date: July 30, 2011 Full story on

South Dakota Adopts SERFF For Electronic Form Filings
S.D. Admin. R. 20:6:28 (2007) Form Filing Requirements Effective Date: July 2, 2007 SUMMARY The South Dakota Department of Revenue and Regulation, Division of Insurance, amends SDR 20:06:28:01, 08 to establish requirements for electronic form filings. Full story on

Individual Issues Predominate In Denial Of Class Certification To Annuitants
HONOLULU - A proposed class consisting of Hawaii seniors who obtained a Midland Life Insurance Co. deferred annuity while age 65 or older is not entitled to certification under Federal Rule of Civil Procedure 23 because individual issues clearly predominate in the plaintiffs' suitability-based claims, a federal judge ruled July 14 (Gary Yokoyama, Catherine E. Thorson and Edna C. Yamane, et al. v. Midland Life Insurance Company, No. 05-00303, D. Hawaii). Full story on

Midland Liquidator Demands $2 Million From Reinsurer
NEW YORK - The New York superintendent of insurance sued OneBeacon Insurance Co. on Aug. 16, demanding more than $2 million in reinsurance proceeds allegedly owed to the estate of Midland Insurance Co. for insurance claims arising from blood contamination lawsuits (Eric R. Dinallo v. OneBeacon Insurance Co., No. 40019/07, N.Y. Sup., New York Co.). Full story on

Expert Witness Qualified To Testify In Bad Faith Action, Judge Finds
TAMPA, Fla. - A witness is qualified to testify in the area she is being proffered as an expert, namely as an insurance industry claims adjuster, manager and extracontractual liability specialist by virtue of her extensive experience and training, a federal judge concluded Aug. 21, denying in part an insurer's motion to preclude the witness from testifying as an expert in a bad faith action against it (Geico Casualty Company v. Joy Beauford and Alicia Eugenia Arce, No. Case No. 8:05-cv-697-T-24EAJ, M.D. Fla., Tampa Div.; 2007 U.S. Dist. LEXIS 61379). Full story on

Claims Handling Documents Are Not Privileged, Texas Federal Judge Rules
HOUSTON - Communications between a cedent and a reinsurer that were part of the ordinary business of claims handling are not protected by the work product privilege, a Texas federal magistrate judge proposed Aug. 23 (Mid-Continent Casualty Co. v. Eland Energy Inc., et al., No. 06-1576, N.D. Texas; 2007 U.S. Dist. LEXIS 53252). Full story on

Marsh, Aon Agree To Amend Pacts With New York
NEW YORK - Marsh Inc. and Willis Group Holdings have reached an agreement with New York officials that allows them to accept certain fees from insurers in brokerage transactions, according to published reports. Full story on

Admiralty Claims Alleged Against U.S. Government Cannot Be Sustained
NEW ORLEANS - A Louisiana federal judge on Aug. 29 granted the U.S. government's motion to strike admiralty claims alleged against it on the basis that there are no allegations that a vessel caused defective conditions in the Mississippi River Gulf Outlet (MRGO) that contributed to levee breaches and subsequent flooding during Hurricane Katrina (In re: Katrina Canal Breaches Consolidated Litigation, No 05-4182, E.D. La.). Full story on

Oral Arguments Heard On Question Of Applicability Of Anti-concurrent Cause Clause
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals on Sept. 6 heard oral arguments regarding whether a policy's anti-concurrent cause provision, when combined with a hurricane deductible endorsement, provides coverage for damage that is caused by the covered risk of wind (John and Claire Tuepker v. State Farm Fire and Casualty Co., et al., Nos. 06-61075 and 06-61076, 5th Cir.). Full story on

Anti-Concurrent Clause Excludes Coverage For Katrina's Water Damages
NEW ORLEANS - An anti-concurrent clause in an insurer's policy is unambiguous and can be used to exclude coverage for water damages caused by Hurricane Katrina, the Fifth Circuit U.S. Court of Appeals said Aug. 30 (Paul and Julie Leonard v. Nationwide Mutual Insurance Co., Nos. 06-61130 & 06-61131, 5th Cir.). Full story on

Insurer Bears Burden To Prove Flooding, Not Wind Was Efficient Or Proximate Cause Of Loss
LAKE CHARLES, La. - If an insurer proves that flood waters were the "efficient or proximate cause" of its insured's total loss sustained during Hurricane Rita, the insurer is not responsible for paying the insured the full policy limits under Louisiana's Valued Policy Law, the majority of the Third Circuit Louisiana Court of Appeal said Aug. 28 (Mark Landry and Barbara Landry v. Louisiana Citizens Property Insurance Co., No. 07-247, La. App., 3rd Cir.). Full story on

North Dakota Insurance Commissioner Steps Down, Starts Consulting Company
BISMARCK, N.D. - Jim Poolman stepped down from his post as North Dakota Insurance Commissioner effective Sept. 1 to start his own consulting company. Poolman's new venture, known as Jim Poolman Solutions, will be based in Bismarck and will work with clients across the country. Full story on

Maryland Appoints New Insurance Commissioner
BALTIMORE - Maryland Gov. Martin O'Malley announced Sept. 6 that Ralph S. Tyler has been named Maryland insurance commissioner and will oversee regulation of Maryland's $26 billion insurance industry. Tyler currently serves as chief legal counsel for the O'Malley-Brown Administration. Full story on

International Insurance Regulators Plan Annual Conference
KANSAS CITY, Mo. - The National Association of Insurance Commissioners will welcome nearly 600 attendees from more than 130 countries to the 14th annual meeting of the International Association of Insurance Supervisors from Oct. 16-19 in Fort Lauderdale, Fla. Full story on

Insurance Commissioners Hold Public Hearing On Coastal Issues
KANSAS CITY, Mo. - National Association of Insurance Commissioners President and Alabama Insurance Commissioner Walter Bell, along with Florida, Louisiana, Mississippi and South Carolina members of the NAIC's Southeastern Zone, hosted a public hearing to address insurance issues in coastal zones on Sept. 24. Full story on

NAIC Gives Congressional Testimony On Natural Disaster Threat
WASHINGTON, D.C. - Speaking Sept. 6 on behalf of the National Association of Insurance Commissioners, Hawaii Insurance Commissioner J.P. Schmidt testified before a joint hearing of two key subcommittees of the U.S. House of Representatives on legislation that would address the availability and affordability of homeowners insurance. Full story on

NAIC Testifies Before Senate On Investment Adviser Qualifications
WASHINGTON, D.C. - Speaking on behalf of the National Association of Insurance Commissioners, National Association of Insurance Commissioners President-Elect and Kansas Insurance Commissioner Sandy Praeger on Sept. 5 testified before the U.S. Senate Select Committee on Aging on the qualifications of investment advisers who make recommendations to seniors regarding the investment of their money. Full story on

California Proposes Expansion Of Low Cost Auto Insurance Program
SACRAMENTO, Calif. - State Insurance Commissioner Steve Poizner on Aug. 27 announced plans to complete his expansion of the California Low Cost Automobile Insurance Program to the entire State of California. Poizner is working to make the program available to residents in the final 16 California counties - Alpine, Colusa, Del Norte, Glenn, Inyo, Lassen, Mariposa, Modoc, Mono, Nevada, Plumas, San Luis Obispo, Sierra, Siskiyou, Tehama and Trinity. The affordable program provides eligible low-income, good drivers with state-required liability coverage for under $400 a year. Full story on

North Dakota Enacts New Law On Annuity Transaction Practices
N.D. Cent. Code, ? 26.1- 34.2 (2007) Annuity Transaction Practices Effective Date: Aug. 1, 2007 SUMMARY Full story on

South Dakota Provides New Options For Replacement Notices
S.D. Admin. R. 20:06:08 (2007) Replacement Of Life Insurance Effective Date: July 2, 2007 SUMMARY Full story on

Washington Enacts New Market Conduct Oversight Law
2007 Wash. Legis. Serv. 82; 2007 Wash. Ch. 82; 2007 Wash. S.B. 5717 Market Conduct Oversight Law Effective date: July 22, 2007 2007 Full story on

Mississippi Adopts Controversial Policyholder Bill Of Rights
Mississippi Department of Insurance Regulation No. 2007- 1 (2007) Mississippi Homeowner Insurance Policyholder Bill Of Rights Full story on

Texas Applies Building Code Standards In Catastrophe Areas
28 Tex. Admin. Code ?? 1.5.E.5.4010, 5.4011 (2007) Applicable Building Code Standards In Designated Catastrophe Areas Full story on

Delaware Updates Proof Of Insurance, Coordination Of Benefits Rules
18 DE Admin. Code 1307 (2007) Group Coordination Of Benefits Effective Date: June 11, 2007 SUMMARY Full story on

New York Bill Imposing Prejudice Rule, Allowing Direct Actions Vetoed
ALBANY, NY - The governor of New York on Aug. 1 vetoed legislation that would have prohibited insurers from denying coverage based on late notice of claims unless they could demonstrate resulting "material prejudice" and allowed claimants to file direct actions against insurers. Full story on

Seal Lifted In Case Alleging Insurers Fraudulently Overcharged Government For Katrina Claims
GULFPORT, Miss. - A federal judge on Aug. 1 unsealed a lawsuit that accuses insurers and adjusters and engineering firms of fraud for overcharging the U.S. government for Hurricane Katrina claims that the insurers should have allegedly paid (United States of America ex rel. Cori Rigsby and Kerri Rigsby v. State Farm Insurance Co. et al., No. 06-433, S.D. Miss.). Full story on

5th Circuit: No Coverage Owed For Flooding Caused By Levee Breaches
NEW ORLEANS - Policyholders in Louisiana are not entitled to insurance coverage for flood damages caused by breaches of New Orleans' levees during Hurricane Katrina, the Fifth Circuit U.S. Court of Appeals said Aug. 2, explaining that regardless of the cause of the flood, coverage for all water damage resulting from a flood is unambiguously excluded under the policies (In re: Katrina Canal Breaches Consolidated Litigation, No 07-30119, 5th Cir.). Full story on

Insureds' Hurricane Damage Claims Predicated On Valued Policy Law Cannot Be Sustained
NEW ORLEANS - Insureds' claims for damages caused by Hurricanes Katrina and/or Rita and predicated on Louisiana's Valued Policy Law (VPL) cannot be sustained because the VPL does not apply when a total loss is not caused by a covered peril, the Fifth Circuit U.S. Court of Appeals said Aug. 6 in affirming a federal judge's ruling (Chauvin, et al. v. State Farm Fire and Casualty Co., et al., No. 06-30946, 5th Cir.). Full story on

Homeowners, Insurer Debate Whether Anti-Concurrent Cause Clause Is Ambiguous
NEW ORLEANS - The Fifth Circuit U.S. Court of Appeals heard oral arguments Aug. 6 between Mississippi homeowners seeking coverage for Hurricane Katrina damages and their insurer regarding whether an anti-concurrent causation clause is ambiguous and whether it renders a flood exclusion unenforceable (Paul and Julie Leonard v. Nationwide Mutual Insurance Co., Nos. 06-61130 & 06-61131, 5th Cir.). Full story on

Class Action Against Brokers, Lloyd's Syndicates Alleges Manipulation Of U.S., London Markets
MIAMI - In a class action complaint filed July 16 by some of the leading plaintiffs' attorneys in the insurance brokerage antitrust multidistrict litigation, two companies allege that insurance brokers conspired with certain Lloyd's, London underwriters to "manipulate the market for commercial insurance in the United States through both the U.S. and London markets" by accepting undisclosed contingent commissions to steer customers and the resulting premiums to the paying insurers (Lincoln Adventures, LLC, et al. v. Those Certain Underwriters at Lloyd's London, et al., No. 07-60991 S.D. Fla.). Full story on

2nd Bid-Rigging Class Action Targets Lloyd's Syndicates
NEW YORK - A Michigan company on July 25 became the second company to file a class action suit alleging that insurance brokers conspired with certain Lloyd's of London underwriters to manipulate the market for commercial insurance in the United States "through both the U.S. and London markets" (Supreme Auto Transport LLC v. Certain Underwriters of Lloyd's of London, et al., No. 07-CV-6703 [PAC] S.D. N.Y.). Full story on

Statute Does Not Encompass Allegations Of Unfair Practices In Soliciting Purchase Of Policy
PITTSBURGH - The Pennsylvania Supreme Court affirmed on July 18 that Pennsylvania's bad faith statute does not encompass allegations by an insured that an insurer engaged in unfair or deceptive practices in soliciting the purchase of a policy and that the insured whose Unfair Trade Practices and Consumer Protection Law claims establish a fraud in the execution of a contract claim is not precluded from establishing the element of justifiable reliance (Georgina Toy v. Metropolitan Life Ins. Co. and Bob Martini, Nos. 33 & 34 WAP 2005, Pa. Sup., West. Dist.; 2007 Pa. LEXIS 1463). Full story on

NAIC Encourages Participation In Pandemic Exercise
KANSAS CITY, Mo. - The National Association of Insurance Commissioners (NAIC) is encouraging the insurance industry to participate in a multiweek, U.S. financial services sector pandemic exercise to take place this fall. The test will assess risk and gauge the preparedness of the entire financial services industry. The NAIC is a member of the Financial and Banking Information Infrastructure Committee, which - along with the Financial Services Sector Coordinating Council for Critical Infrastructure Protection and Homeland Security and the Securities Industry and Financial Management Association - is sponsoring the nationwide exercise. Full story on

State Farm Pays $29.8 Million On Katrina Claim Re-evaluations
JACKSON, Miss. - Insurance Commissioner George Dale announced Aug. 13 that State Farm Insurance Co., which in April agreed to voluntarily re-evaluate Hurricane Katrina slab cases, has paid more than $29.8 million in claims payments since the re-evaluation process was undertaken. Full story on

NAIC Releases 20th Edition Of IDRR
KANSAS CITY, Mo. - State insurance departments effectively manage their available resources to meet the challenge of regulating an increasingly complex and competitive industry. For the past 20 years, the National Association of Insurance Commissioners (NAIC) has published the Insurance Department Resources Report (IDRR) to help the states assess these resources in comparison to other states. The 2006 edition of the report, which contains key statistics on state insurance department resources and regulatory activities, is now available. Full story on

Missouri Enhances Speed-To-Market For All Insurance Lines
JEFFERSON CITY, Mo. - With the implementation of electronic filing procedures in Missouri, the state's Insurance Market Regulation Division announced July 31 that paper copies of life, health, property and casualty filings will no longer be retained by the Insurance Department. Full story on

New Jersey Levies Nearly $9.5M In Penalties Against Aetna Health
TRENTON, N.J. - On July 23, the New Jersey Department of Banking and Insurance filed an administrative order levying $9,475,000 in fines against Aetna Health Inc. for refusing to appropriately cover certain services provided by out-of-network health care providers - including emergency treatment - in violation of New Jersey rules and regulations. Full story on

Washington Amends Rules On Use Of Credit Scoring
Wash. Admin. Code ?284- 24A-001 et seq. (2007) Credit History And Insurance Scores Effective Date: August 1, 2007 Full story on

Oklahoma Modifies Producer And Adjuster Licensing Rules
Okla. Admin. Code ? 365:25- 3-1, -3, -4, -8, -9, -10, -12, -14 and -16 (2007) Okla. Admin. Code ? 365:25-3-17-8 (2007) Full story on

Oklahoma Amends Continuing Education Forms For Surplus Lines
Okla. Admin. Code ? 365:1- 9-5, -11, -12.1, -14, -15.1 (2007) Administrative Operations Effective Date: July 14, 2007 Full story on

Florida Creates Insurance Capital Build-Up Incentive Program
Fla. Admin. Code Ann. r. 19-15.001 (2007) Insurance Capital Build-Up Incentive Program Effective Date: June 3, 2007 Full story on

Oklahoma Removes Accelerated Benefits Life Expectancy Limits
Okla. Admin. Code ?? 365:10-5-100 through 365:10-5-110 (2007) Accelerated Benefits Effective Date: July 14, 2007 Full story on

Oklahoma Amends Rules For Discount Medical Plan Organizations
Okla. Admin. Code 365:10-23-3, -4 (2007) Discount Medical Plan Organizations Effective Date: July 14, 2007 Full story on

MDL Judge Approves $29.9M Fees And Expenses Payment In Zurich Settlement
NEWARK, N.J. - The insurance brokerage antitrust multidistrict litigation judge on June 5 granted class counsel's motion for a $29.9 million award for fees, expenses and incentive award payments for the named plaintiffs in connection with the settlement reached with the Zurich insurers (In Re Insurance Brokerage Antitrust Litigation, No. 04-5184, D. N.J.; 2007 U.S. Dist. LEXIS 40729). Full story on

Zurich, Attorneys Sanctioned $1.25M For Withholding WTC Policy
NEW YORK - A New York federal judge on June 18 sanctioned Zurich American Insurance Co. and two law firms $1.25 million for withholding an insurance policy that extended coverage to the owner and leaseholder of the World Trade Center (WTC) (In Re: September 11th Liability Insurance Coverage Cases, No. 03-332, S.D. N.Y.). Full story on

Insured Property Owners Cannot Collect Statutory Penalties, Judge Says
NEW ORLEANS - Insured property owners are not entitled to collect statutory penalties for an insurer's delay in paying a Hurricane Katrina claim because issues of fact exist regarding whether the insurer's delay was justifiable, a federal judge said July 2 (Shadow Lake Management Co. Inc. and Relais Esplanade L.L.C., v. Landmark American Insurance Co., No. 06-4357 c/w 06-4358, 06-4359, 06-4360, 06-4428, E.D. La.; 2007 U.S. Dist. LEXIS 47816). Full story on