A recent case pitted two State of Florida agencies involved in insurance regulation against one another, and resulted in a decision by the appellate court that the Insurance Commissioner could not be compelled to appear as a witness at trial or in deposition to answer hypothetical questions about regulatory decisions he might have made earlier in time if he had known certain information about the financial condition of particular insurance companies. Florida Office of ... Keep Reading »
Regulatory
Cyber Risk as a Regulatory Issue: Tales of Encryption
Spurred by the prescient reporting found in this space (and, just maybe, by the Anthem data breach, which occurred a week later), insurance regulators have recently engaged in a flurry of regulatory activity relating to cyber security issues. Very shortly after the Anthem breach was announced, the newly-formed Cybersecurity (EX) Task Force of the National Association of Insurance Commissioners (NAIC) called for a multi-state examination of Anthem's cybersecurity ... Keep Reading »
California Bans Use of Price Optimization
Yesterday California Insurance Commissioner Dave Jones became the latest voice in a growing chorus of state insurance regulators who condemn the use of "Price Optimization" as a mechanism for adjusting property-casualty insurance rates and pricing. In a Notice delivered to more than 750 P&C insurers, the Commissioner declared that "any use of Price Optimization in the ratemaking/pricing process or in a rating plan is unfairly discriminatory in violation of ... Keep Reading »
New York Statute Aims to Curb Abuse of Certificates of Insurance
A certificate of insurance ("COI") is a document issued by an insurer or broker that evidences the existence of insurance coverage under specific circumstances. On January 28, 2015, New York’s Governor Andrew Cuomo signed into law a bill (S.6545-A/A.9590-A) that establishes standards for the issuance of COIs by insurers and insurance producers. The new law also authorizes the state’s Department of Financial Services ("DFS") to impose penalties for violations. The COI ... Keep Reading »
Cyber Risk as a Regulatory Issue: A Connecticut Regulator Shares Her Insights
Even at Sony, cyber security was a hot topic before Kim Jong-un took an interest in Seth Rogen’s oeuvre. In 2011, hackers gained access to the personal and financial information Sony had collected on more than 100 million participants in its on-line gaming networks. The incident was the subject of more than 60 class actions, for which Sony announced a settlement last summer. Sony’s plight illustrates one facet of the interrelationship between cyber risk and ... Keep Reading »
Connecticut Insurers Get a Day in Court to Resolve Regulatory Investigations
As Hillary Clinton can attest,some government investigations tend to drag on, and they create problems for their targets as long as they last. In late 2011, the targets of a lingering investigation by the Connecticut Insurance Department tried to lift the cloud over their business, by filing a declaratory judgment action in Superior Court. The trial court dismissed their suit, on the ground that the Department's proceedings had not yet run their course. But last ... Keep Reading »
“Blinded By the Light of God and Truth and Right”: Constitutional Arguments Carry the Day Against Zealous Insurance Receiver
Insurance receivers have the unenviable job of liquidating failed insurance companies: collecting the insolvent insurers’ assets and paying claims against the failed insurers in accordance with a statutory claim priority regimen. Given what they see in their line of work, receivers often come to presume that every owner of a failed insurance company has been guilty of some sort of ethical or legal misconduct. Influenced by that preconception—and by the conviction that ... Keep Reading »
In Opposing Global Capital Standards for International Insurers, NCOIL Roils Domestic Industry
In July, the International Association of Insurance Supervisors (IAIS), a membership organization that represents insurance regulators and supervisors in more than 100 countries, released for public consultation a set of proposed basic capital requirements for “global systemically important insurers” (“G-SIIs”). Within days, the National Conference of Insurance Legislators (NCOIL), a nonprofit group that represents state legislators in Washington, adopted a ... Keep Reading »
Not So Fast: New York’s High Court Relieves Pressure on Liability Carriers to Disclaim Coverage “As Soon As Possible”
Under a New York statute, a liability insurer that denies coverage for a death or bodily injury claim must provide written notice of its decision “as soon as is reasonably possible.” Last year, in Long Island Lighting Co. v. Allianz Underwriters Ins. Co., 961 N.Y.S.2d 419 (1st Dep’t 2013), an intermediate appellate court applied that standard to an insurer’s denial of coverage for environmental damage claims involving the site of a manufactured gas plant (MGP). The ... Keep Reading »
CFPB Mortgage-Servicing Regulations will Impact Lender-Placed Insurance
Under Dodd-Frank, the Consumer Financial Protection Bureau (“CFPB”) is authorized to issue regulations that cover the servicing of consumer mortgage loans. In January, the CFPB issued new regulations (‘the “Final Rule”) that extensively amend the mortgage-servicing rules of both Regulation X (the regulation that implements the Real Estate Settlement Procedures Act of 1974 (“RESPA”)) and Regulation Z (which implements the Truth in Lending Act (“TILA”)). The Final Rule ... Keep Reading »