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Bad Faith in Liability Insurance - New Appleman on Insurance Law Library Edition, Chapter 23

Chapter 23 begins by recounting the origins of a liability insurer's duty to protect its insured from exposure to a judgment in excess of limits by settling within limits. The fact that the insurer's duty to indemnify extends only to a limited amount creates a well-known conflict of interest...

Dead Soldiers' Parents Sue Insurer Over Benefits

SPRINGFIELD, Mass. - (AP) The parents of six deceased U.S. soldiers accuse Prudential Financial of paying paltry interest on military life insurance benefits and keeping more generous interest earnings for itself. Five plaintiffs joined the original plaintiff Monday in a lawsuit that was filed in...

Ashkenazi v. AXA Equitable Life – Policies Procured by Fraud

By Stephan Leimberg and Howard Zaritsky "life insurance is designed to replace or preserve wealth or income that is lost due to an insured's death, rather than create wealth or income." Ashkenazi v AXA Equit. Life Ins. Co., 2009 NY Slip Op 33111U (N.Y. Sup. Ct. Dec. 16, 2009) , provides...

SNR Denton on Sanderson v. American Family Insurance Co.: “Fair Debatability” Not Threshold Defense in Colorado?

By William T. Barker & Ronald D. Kent, Partners, SNR Denton Sanderson v. American Family Insurance Co. [1] affirmed summary judgment for an insurer on bad faith, but asserted that the fact that the claim was “fairly debatable” was not (as the trial court had thought) a threshold defense...

Revisiting the Three Rs: Risks, Rewards, and Rescission

By Mary McCutcheon and Amanda Hairston, Attorneys, Farella Braun + Martel LLP In their article appearing in the May/June 2011 issue of Coverage , "Revisiting the Three Rs: Risks, Rewards, and Rescission," Mary McCutcheon and Amanda Hairston observe that insurers' claims that they are...

U.S. Supreme Court Denies Insurer's Motion To Stay Reinstated $92.9 Million Judgment

WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on Jan. 31 denied an insurer's motion to stay pending the filing and disposition of a petition for a writ of certiorari of a $92.9 million judgment that was reinstated against it in a class action lawsuit arising from hurricanes Katrina and...

Receivership – New Appleman on Insurance Law Library Edition, Chapter 99

By Douglas Hertlein Abstract * * * Chapter 99 analyzes all forms of insurer receiverships. When a commissioner’s regulatory powers, including the power to issue supervision orders, prove to be insufficient to address financial or other operational difficulties of an insurer, state law...

Rehabilitation Of Insurers – New Appleman on Insurance Law Library Edition, Chapter 100

By Patrick H. Cantilo, Mark F. Bennett, Arati Bhattacharya Abstract *** This chapter addresses the rehabilitation of insurers. In general, upon the advent of receivership proceedings (for purposes of this chapter, any proceeding through which state insurance regulatory officials or their...

Liquidation – New Appleman on Insurance Law Library Edition, Chapter 101

By Katherine Billingham Abstract Liquidation of an insurance company is the equivalent of a Chapter 7 bankruptcy and is the remedy of last resort for an insurer in financial difficulty. This chapter examines the timing, purpose and grounds for liquidation, as well as the process of the liquidation...

Consequences of Insurer Insolvency – New Appleman on Insurance Law Library Edition, Chapter 102

By Bruce Baty and Jodi Adolf Abstract * * * Chapter 102 discusses the consequences of an insurer insolvency for the policyholders, agents, excess insurers and reinsurers of the insolvent insurer. The chapter begins in Section 102.01 with a general discussion of the liquidation process...

Insurance as an Asset in the Estate – New Appleman on Insurance Law Library Edition, Chapter 108

By Susan N. K. Gummow Abstract *** Having reviewed the basic elements and concepts of bankruptcy law in Chapter 107 above, Chapter 108 focuses on how insurance functions as an asset of the debtor’s bankruptcy estate. Section 108.01 begins by examining the relationship between the...

Impact Of Bankruptcy On Insurance Matters – New Appleman on Insurance Law Library Edition, Chapter 109

Abstract *** Having considered the bankruptcy process generally in Chapter 107 and undertaken an inquiry into how insurance functions as an asset of the bankruptcy estate in Chapter 108 above, this chapter turns to the impact of bankruptcy on insurance-related matters and addresses issues that...

Bankruptcy Issues Arising For Specific Kinds of Insurance – New Appleman on Insurance Law Library Edition, Chapter 110

By James M. Lawniczak Abstract *** Chapter 110 covers insurance issues that often arise in federal bankruptcy cases. Due to their nature, certain types of insurance policies are implicated more often in bankruptcy proceedings than others. For example, probably the most discussed type of insurance...

High Court Hands Excess Insurers A Big Bad Faith Stick Against Primaries

There is nothing out of the ordinary about suits by excess insurers, against an underlying primary insurer, alleging that the primary had an opportunity to settle a claim within its limit, did not do so, and, as a consequence, there was later a verdict that reached, but should not have, the excess insurer’s...

7th Circuit Rules That Title Insurer Is Not Liable for Construction Liens Resulting From Lender’s Failure to Fund

The 7th Circuit has ruled that a lender is not insured by a title company for liens that arise after a construction loan became significantly out of balance and the lender stopped funding. In BB Syndication Services, Inc v. First American Title Insurance Company , decided March 12, 2015 by the Unites...

Supreme Court Allows Excess Insurer’s Bad Faith Claim Against Primary

Tapas: Small Dishes of Insurance Coverage News & Notes The Supreme Court of Hawaii held that “an excess liability insurer can bring a cause of action, under the doctrine of equitable subrogation, against a primary liability insurer who in bad faith fails to settle a claim within the limits...

New York: Claimant Entitled to Approval Nunc Pro Tunc Where Inactivity on Part of Insurer Lulled Claimant Into Believing Carrier’s Lien Had Been Waived

Where an injured worker settled a third-party action against an alleged tortfeasor for $800,000, with the workers’ compensation insurer having previously paid some $71,000 in benefits, the worker was entitled to an order approving a settlement of the tort claim nunc pro tunc under N.Y. Workers’...

Duty to Defend Triggered by Extrinsic Evidence Showing Insurer-Insured Relationship Existed

By Matthew E. Hedberg Last month, the Oregon Court of Appeals issued another decision that rejects a rigid application of the four-corners rule to determining the duty to defend. Previously, in Fred Shearer & Sons, Inc. v. Gemini Ins. Co. , 237 Or App 468, 476, 240 P3d 67 (2010), [subscribers...