A federal judge has granted AXA Equitable Life Insurance Company’s motion to dismiss claims brought against it by insureds who alleged that AXA violated New York law by engaging in various “shadow insurance” transactions, [subscribers can access an enhanced version of this opinion: lexis.com | Lexis Advance ]. The Southern District of New York concluded that the plaintiff insureds failed to demonstrate...

The Summer 2015 Meeting of the National Association of Insurance Commissioners (the "NAIC") saw further developments on issues that Duane Morris has been following . We previously reported on the controversy over confidentiality of the details of the reports required by the Own Risk and Solvency Assessment in our Alert issued on August 27, 2015. This Alert discusses the NAIC's "certified reinsurer"...

The Summer 2015 Meeting of the National Association of Insurance Commissioners (the “NAIC”), which concluded on August 18, saw further developments on issues that Duane Morris has been following . This Alert discusses the controversy over confidentiality of the details of the reports required by the Own Risk and Solvency Assessment (“ORSA”) laws being adopted by the states. At the Financial...

Flooding is the most common and costly form of nature’s wrath, and its costs are likely to rise as the climate changes and sea levels rise. The federal government has attempted to address flooding through an insurance program aimed at effectively providing relief to those whose property is damaged by flooding and at incentivizing sound risk management. However, the federal insurance program subsidizes flood insurance...

Political Overview Republicans fared well in the election cycle that preceded the 2015 Florida Legislative Session. Despite a tight race, Republican Governor Rick Scott won re-election as did the other three GOP Cabinet members. Additionally, Republicans took six House seats from the Democrats, regaining the two-thirds, veto-proof majority (81 to 39); and, in the Senate, they maintained their 12-member majority...

Beginning in 2013, we have issued a series of Alerts on the controversy regarding the use of captive insurance companies to finance reserves for certain type of life insurance policies (so-called "XXX or AXXX reserves," which are widely believed to exceed reserves that are actually needed to pay claims under those policies). In our most recent Alert , " Latest Developments in Regulation XXX/AXXX Captives...

You Must Comply With California Regulations by September 1 Fair Claims Settlement Practices Regulations All insurers doing business in California must comply with the requirements of California Fair Claims Settlement Practices Regulations (the “Regulations”) or face the ire of, and attempts at financial punishment from the California Department of Insurance (“CDOI”). That punishment is now...

Pet insurance industry to reach $750 million by 2015 as Americans increase spending on veterinary care. Within California's economy, the pet insurance market is rapidly growing and expected to reach $750 million by next year. AB 2056 (Matt Dababneh), [ enhanced version available to lexis.com subscribers ], sponsored by California Insurance Commissioner Dave Jones, will add important consumer protections to pet...

By Chelsea V. Prince, Associate The West Virginia Insurance Commissioner recently issued Informational Letter No. 189 which interprets and clarifies those portions of the W.Va. Code of State Rules requiring delay letters during the investigation of a claim. Per the Commissioner, delay letters are required during the investigation of any component of a claim: coverage, liability, and/or damages. However, after suit...

The use by life insurance companies of captive reinsurance companies to finance XXX and AXXX reserves has been a significant and contentious issue in recent years.[1] Some members of the National Association of Insurance Commissioners (the "NAIC") are deeply opposed to captive-based financing transactions, whereas other regulators and many members of the life insurance industry support their use. Duane Morris...

The tectonic plates of insurance regulation are shifting – with reverberations across the industry. The industry is also faced with significant commercial pressures, including a flood of third-party capital; persistent historically low investment returns, which are driving insurers to search for yield and restructure their businesses; and a flurry of M&A activity, particularly cross-border acquisitions, as insurers...

Insurance agents, brokers and intermediaries may only sell insurance policies if they are licensed by the state. The licensing laws are designed to protect the public against unscrupulous agents and brokers. When the agent, broker or intermediary ignores orders of revocation and continues to sell insurance and deal with insurance clients, he or she faces the ire of the state regulator and the courts. Michael Dermody...

By John Goulios , Biswajit Chatterjee , Daniel Sharma, LL.M. , and Joywin Mathew The winter session of the India parliament concluded on December 20,2013. Against the backdrop of the slowing growth rate and demands from the investment community for economic reforms, one critical piece of legislation that was expected to be considered by the parliament was The Insurance Laws (Amendment) Bill, 2008 (the "Bill"...

Fred E. Karlinsky, Richard J. Fidei, Trevor B. Mask, and Benjamin J. Zellner of the law firm of Colodny, Fass, Talenfeld, Karlinsky, Abate & Webb have written an in-depth commentary comprised of a round-up of the ten most important developments in federal and state insurance regulation of 2013. Highlights include: 1) The Federal Insurance Office (“FIO”) released a report on how to modernize the insurance...

The California Department of Insurance has announced that along with other state insurance departments, they have reached a settlement with the Genworth Life Insurance Company over the insurer's use of the Social Security Administration's Death Master File database. The settlement ensures protection for policyholders and beneficiaries. "I am pleased with the outcome of this agreement as it is another success...

Introduction As the first step in the development of group-wide global insurance capital standards, the International Association of Insurance Supervisors (IAIS) released for public consultation its proposal on basic capital requirements (BCR) for global systemically important insurers (G-SIIs) on December 16, 2013. As announced jointly by the Financial Stability Board (FSB) and the IAIS on July 18, 2013, BCR will...

On May 20, 2013, the American Law Institute adopted some of the initial sections of its Principles of Liability Insurance. I’ll be honest. When I first heard about the ALI’s Principles Project – essentially a rule book for liability coverage issues -- I did not pay much attention. It sounded like the stuff of law professors, academic mumbo jumbo, and nothing I needed to know about. When I need to know...

During 2013 Governor Jerry Brown signed four bills that the California Department of Insurance (CDI) sponsored during the legislative year. The bills are: AB 32 (Chapter 608, Statutes of 2013) authored by Assembly Speaker John Pérez (D-Los Angeles). AB 32, [ enhanced version available to lexis.com subscribers ], will provide a financial boost to California's economy of more than $460 million between 2013...

On November 5, 2013, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the GSEs) will no longer reimburse their participating servicers for expenses arising out of captive reinsurance arrangements. Captive reinsurance occurs when the servicer purchases a lender-placed policy from the insurer and then issues reinsurance to the insurer through a subsidiary or affiliate. This past March...

On October 9, 2013, the International Association of Insurance Supervisors (IAIS) took a significant step toward developing a first-ever risk-based global insurance capital standard (ICS). The target date for development of the ICS is 2016, with full implementation beginning in 2019 after two years of testing and refinement. Peter Braumüller, chair of the IAIS Executive Committee, said: "[i]t is undeniable...

The National Association of Insurance Commissioners ("NAIC") 2013 Summer National Meeting, which was held in late August, saw a continuation of the debate over major insurance regulatory reforms. The first of these reforms involves supervision (regulation) of insurance and non-insurance entities that operate in global insurance groups. The NAIC, along with much of the domestic insurance industry, continues to...

By the Ballard Spahr LLP Insurance and Consumer Financial Services Groups The Superintendent of the New York State Department of Financial Services (DFS), Benjamin M. Lawsky, has informed his fellow state insurance regulators in the National Association of Insurance Commissioners (NAIC) that New York will no longer implement an arrangement developed by the NAIC for setting the amount of reserves that life insurance...

Insurance Commissioner Dave Jones announced today that the California Department of Insurance has, with other state insurance regulators, reached a settlement agreement with Aegon over the insurer's use of the Social Security Administration's Death Master File database to ensure policyholders and beneficiaries are protected. Aegon is the parent of Transamerica Insurance Company. Aegon has agreed to a number of...

The now iconic song of 1969 aptly describes the insurance regulatory activity we are seeing in the summer of 2013. During the last two weeks of July, the International Association of Insurance Supervisors (IAIS) announced new standards for regulation of G-SIIs, including releasing the initial list of insurance group G-SIIs; the National Association of Insurance Commissioners (NAIC) officially adopted a number of initiatives...

Conduct exam of a second insurer finds MassMutual using Death Master Database properly Insurance Commissioner Dave Jones has announced that the California Department of Insurance has, with other state insurance regulators, reached a settlement agreement with ING over the insurer’s use of the Social Security Administration’s Death Master database to ensure policyholders and beneficiaries are protected...