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TODAY'S TOP DEVELOPMENTS Friday, June 14, 2013

Industry news, expert analysis, and daily updates on the most significant insurance coverage legal developments—from the insurance and legal experts of The National Underwriter Company.


Commercial Lines
No Coverage for Sheriff’s Employees Who Allegedly Had Sex with Prisoner without Her Consent
A federal district court in Illinois has ruled that an insurer was not obligated to defend claims against employees of a county sheriff that they had sex with a prisoner without her consent and provided her with unlawful drugs and alcohol, ruling that the alleged acts were not within their scope of employment. The case is U.S. Specialty Ins. Co. v. Rhoads, No. 11–CV–2217 (C.D. Ill. June 4, 2013). Read More

Employee Benefits
Court Denies Motion to Compel Insurer to Produce Document Cited in Privilege Log
A federal district court in Colorado has denied a motion to compel an insurer to produce a document cited in its privilege log, finding it protected by the attorney–client privilege. The case is Wellinger Family Trust 1998 v. Hartford Life and Accident Ins. Co., No. 11–cv–02568–CMA–BNB (D. Colo. June 5, 2013). Read More

Professional Liability Insurance
NY: Having Breached Duty to Defend, Liability Insurer May Not Cite Policy Exclusions to Escape Duty to Indemnify Insured for Judgment
New York’s highest court, the Court of Appeals, has held that, when a liability insurer has breached its duty to defend its insured, the insurer may not later rely on policy exclusions to escape its duty to indemnify the insured for a judgment against the insured. The court ruled that an insurance company that had disclaimed its duty to defend, “may litigate only the validity of its disclaimer,” and stated that if “the disclaimer is found bad, the insurance company must indemnify its insured for the resulting judgment, even if policy exclusions would otherwise have negated the duty to indemnify. This rule will give insurers an incentive to defend the cases they are bound by law to defend, and thus to give insureds the full benefit of their bargain. It would be unfair to insureds, and would promote unnecessary and wasteful litigation, if an insurer, having wrongfully abandoned its insured’s defense, could then require the insured to litigate the effect of policy exclusions on the duty to indemnify.” Read More

Court Refuses to Dismiss Claim Seeking Coverage for Alleged Loss of Dozens of Pallets of Chemicals at Warehouse
A federal district court in Louisiana has refused to dismiss a complaint against an insurance company seeking coverage for the alleged loss of several dozen pallets of bulk chemicals from a warehouse, finding that three exclusions in the policy did not clearly bar coverage.  Read More

View All Case Law Developments

Alternative Risk and Captives

Transparency Surrounding “Shadow Insurance” is Challenged in NY Report
The New York State Department of Financial Services did not give high grades to insurance companies regarding the disclosures they make about their involvement with “shadow insurance.”  Read More

Alternative Risk and Captives
Shadow Insurance: The Specifics in the New York Report
After an 11 month investigation by the New York State Department of Financial Services, it has issued a report that asserts that insurers use “shadow insurance” in large measure “to do an end–run around higher reserve requirements that states established for certain term and universal life insurance policies.” A table in the DFS report that summarizes what it characterizes as “the artificial boosts in capital realized from the transactions involving non–New York–based affiliates utilizing parental guarantees,” as reported by nine New York–based insurers, found increases in risk–based capital (“RBC”) for those affiliates ranging from 0 percent to 794 percent in the aggregate (excluding what the DFS said was “one outlier reporting negative changes”). The average increase in RBC: about 248 percent. Read More

View All Legislative/Regulatory Developments
Steven A. Meyerowitz, ESQ.

Director, FC&S Legal
60px_newSpears Victoria Prussen Spears, ESQ.
Associate Director, FC&S Legal

FC&S Legal
Editorial Advisory Board

Mitchell J. Auslander, Willkie Farr & Gallagher LLP
Carrie Cope, Schuyler, Roche & Crisham, P.C.
Anjali C. Das, Wilson Elser
John F. Finnegan, Chadbourne & Parke LLP
Michele L. Jacobson, Stroock & Stroock & Lavan LLP
Timothy P. Law, Reed Smith LLP
Donald S. Malecki, Malecki, Deimling, Nielander & Associates, LLC
Cort T. Malone, Anderson Kill & Olick, P.C.
D. Milone, Kelley Drye & Warren LLP
Joseph P. Monteleone, Tressler LLP
Anne M. Murray, Rivkin Radler LLP
Jerold Oshinsky, Kasowitz, Benson, Torres & Friedman LLP
Seth B. Schafler, Proskauer Rose LLP
David D. Thamann, The National Underwriter Company
Distracted Driving’s Dangers Highlighted in New AAA Study Read More

The Appearance of Coverage Read More

Generali to Sell Its Stakes in Mexico to Banorte for $857.5 Million Read More
ACE Launches New Contractors Pollution Liability Coverage for Health Care Industry Construction Projects Read More
Ecclesiastical Insurance Announces Changes to Senior Leadership Team Read More

View All Industry News
Insurance Forms & Resources

Club Member Injured Through Advice of Insured
June, 2013


Browse our entire library of over 2,500 resources and forms.

Employment Practices Liability Insurance Read More

HarrisMartin’s Superstorm Sandy Insurance Coverage Litigation Conference Read More

Asbestos Claims & Litigation  
Read More

View Full Calendar


Focus On: Inadvertent Omission of Exclusion Created Only the Appearance of Coverage, Circuit Finds in Upholding Decision Overturning Jury Verdict in Insured’s Favor  Read More

State Responses to Superstorm Sandy and Other Natural Disasters: Implications for Ceding Companies and their Reinsurers  Read More

Insurance Certificates and Evidence of Insurance for Lease Transactions  Read More

View Entire June Insurance Coverage Law Report
View Insurance Coverage Law Report Archives


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