Absolute Liquor Liability Exclusion Is Not Illusory

General liability policies sometimes contain exclusions that preclude coverage for losses that relate to the business insured.  Whether that renders the policy coverage illusory is a question for the courts.  In a recent case, the 11th Circuit addressed an Absolute Liquor Liability Exclusion involving a night club.

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Phishing and Fraudulent Instructions Under a Commercial Crime Policy

Warnings are plentiful about phishing schemes where a bad actor pretends to be an officer of a company and directs an employee to wire transfer funds to a foreign bank.  Despite these warnings, employees regularly fall for these phishing schemes and wire funds to off-shore accounts never to be seen again.  Companies that fall victim to these phishing attacks often turn to their insurance policies for a recovery.  Among the insurance policies that might provide coverage is the commercial crime policy, which provides coverage for losses directly related to fraudulent instructions.  In a recent case, the 11th Circuit was asked to determine whether coverage existed as a matter of law.

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Who Decides Consolidation Issue? A New Arbitration Panel or the Old One?

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It is pretty well settled under modern arbitration law, including reinsurance arbitrations, that procedural issues like consolidation are questions for the arbitrators and not the courts.  But what happens if there are multiple arbitration panels?  Which panel decides the consolidation application?  And what if one arbitration has been completed and a motion to consolidate is made to join the second arbitration to the first one?  Which panel decides the consolidation question?  The Third Circuit took a crack at this issue in a recent not precedential decision.

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Liquidator Compelled to Arbitrate Hurricane Reinsurance Disputes

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The federal policy favoring arbitration sometimes bumps up against state-based receivers where the receiver would rather the receivership court address reinsurance disputes than have the matter arbitrated.  In the aftermath of Hurricanes Irma and Maria, which devastated Puerto Rico, reinsurance disputes arose over a cedent’s allocation between the hurricanes and other aspects of the many claims ceded to reinsurers.  In an anticipated ruling, the question of whether these disputes will be arbitrated or resolved in the receivership court has been answered.

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Post-Trial Motions Denied in Hard-Fought Reinsurance Dispute

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Reinsurance disputes are rarely tried to a jury.  They are typically arbitrated.  When they are tried to a jury–just like any jury trial–there are often post-trial motions made to seek to overturn the jury verdict or modify the judgment.  Motions like that are difficult to win, especially when key facts are left to the jury to determine and there is sufficient evidence in the record to support the jury’s findings.  This was the case in a recent reinsurance jury trial that ended up with a judgment in favor of the cedent on its reinsurance allocation of asbestos settlements.

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December 2019 Reinsurance Newsletter

In our December 2019 Reinsurance Newsletter we discuss non-signatories being bound by arbitration clauses, a case involving who decides arbitrability questions, a functus officio case, a remand to an arbitration panel to clarify an arbitration award, and an update on TRIA.  A number of other case developments are digested as well.  Please enjoy.  Feedback is always welcomed.

Another Federal Court Denies Application to Seal Arbitration Award

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Nearly every US reinsurance arbitration includes a Confidentiality Agreement.  The vast majority of those confidentiality agreements are based on the ARIAS•U.S. Confidentiality Agreement and Protective Order model form.  Most confidentiality agreements provide that disclosure may be made “as is necessary in connection with court proceedings relating to any aspect of the arbitration, including but not limited to motions to confirm, modify, vacate or enforce an award issued in this arbitration.”  Most also provide that “[i]n connection with any disclosures pursuant to [court proceedings], the parties agree, subject to court approval, that all submissions of Arbitration Information to a court shall be sealed and/or redacted so as to limit disclosure of Arbitration Information.”  So how well do these provisions hold up in court when a motion to seal is made?

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Unique Arbitration Clause Does Not Prevent Granting of Motion to Compel Arbitration

Whether a motion to compel arbitration will be granted depends on, among other things, whether the arbitration provision is broad or narrow and whether the dispute falls within the scope of the arbitration provision.  In a recent case, a California federal court construed unique language in an arbitration provision in a reinsurance agreement, granted the motion to compel arbitration and stayed the litigation.

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Eleventh Circuit Holds That Face Value of Policies Establishes the Amount-In-Controversy for Equitable Claims

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The life insurance industry has seen a significant number of class actions brought against it for allegedly wrongful conduct in increasing the cost of insurance (“COI”) component of the policy premium.  In many of these cases, the life insurance company will remove a state case to federal court under the Class Action Fairness Act (“CAFA”).  In a recent case, the Eleventh Circuit was asked to determine whether the amount-in-controversy jurisdictional requirement of the CAFA was met based on the face value of the policies or whether the face value was not the proper measure.

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New York Court of Appeals Clarifies No Private Right of Action Against Insurers Who Report Possible Professional Misconduct

Insurance fraud is a big deal and costs all of us plenty in the way of increased insurance premiums.  When automobile liability insurers see claims where they question whether the medical provider is acting appropriately, they may choose to report their findings to the state medical disciplinary authority.  If the disciplinary authority declines to impose discipline, can the medical provider sue the insurance company?  The New York Court of Appeals just answered that question.

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