Delaware Superior Court Excludes Coverage for Directors Acting in Dual Capacity as Investors

Directors and officers (“D&O”) liability insurance generally protects directors and officers against legal expenses and personal liability for acts and omissions taken in their capacity as directors and officers of the insured company.  In a recent case, coverage was excluded where directors also acted as investors of the company.

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Can English Law Insurance Policies Cover Fines Imposed Under GDPR?

Insurance Policy Documents

When the General Data Protection Regulation (“GDPR”) passed into English law on 25 May 2018, one of the headlines that heralded the new legislation was the Information Commissioner Office’s (“ICO”) new power to impose fines of up to €20million, or 4% of global turnover (whichever is the higher) on organisations that breach the GDPR.  Given the dramatic increase of the ICO’s power to impose fines, one of the questions asked by insurance market participants was whether these fines could be covered by insurance?

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Some Thoughts on Proving an Insurance Contract in Court

Insurance policy on a desk

Insurance companies often have their backs against the wall in any dispute.  Typically, in a coverage or premium action brought by the insurance company, it bears the burden of proving its insurance contract and any exclusionary endorsements.  In inter-company disputes that may be a bit easier and the rules may be a bit looser (e.g., reinsurance arbitrations), but in court, the policy has to be proven by the best evidence available.

Even if the dispute is just about one aspect of the policy, most courts require that the entire policy be proven, including all endorsements and other addenda.  That can be problematic when the “original” policy was issued through a broker or agent and delivered to the insured.  Often times, the “home office” copy may not contain all the pieces of the actual policy issued to the insured.

In this blog post, I will talk about a case we had many years ago and the challenges of proving an older, continuous policy, and a recent case in a New York intermediate appellate court where issues arose on appeal with the evidence presented about the policy.

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New York Appellate Court Upholds Title Insurance Kickback Regulation

Hand holding a letter

Last summer, a New York state motion court granted a petition by the title insurance industry challenging a New York State Department of Financial Services (“DFS”) regulation promulgated to prohibit certain practices affecting title insurance costs.  That order has now been modified by an appellate court and the petition has been denied except for two subsections of the regulation.

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Read Our Top 10 Blog Posts From 2018

Top 10Below are the top 10 blog posts from our Insurance & Reinsurance Disputes Blog for 2018.  These are the ones our readers viewed the most last year. The compilation is diverse as is the topic of insurance and reinsurance disputes.  Please enjoy this stroll down memory lane.

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New Arbitrability Decision from the Supreme Court

US Supreme Court Building Detail Close-up

A new arbitration decision was handed down by the U.S. Supreme Court on January 8, 2019.  My colleagues in our labor and employment practice swiftly blogged about the new decision so I won’t repeat their cogent analysis. The case has nothing to do with insurance or reinsurance. But the principles set forth by Justice Kavanaugh in his first opinion (unanimous at that) are relevant to insurance and reinsurance arbitrations because most insurance and reinsurance arbitrations come within the Federal Arbitration Act (“FAA”).

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Arbitration Awards and Confidentiality Revisited

Confidential Files

In reinsurance arbitrations, most parties agree to confidentiality and enter into a formal confidentiality order.  The confidentiality order typically applies to the final award as well as all materials generated in the arbitration.  Some insurance and reinsurance agreements have confidentiality provisions that lead to the same result.  The ARIAS-U.S. Rules for U.S. Insurance & Reinsurance Disputes presumes confidentiality (7.1 and 7.2) and ARIAS has a model confidentiality agreement.

In two previous blog posts, we discussed some of the issues with confidentiality in arbitration and whether arbitration awards and materials should be sealed when there is a petition to vacate or confirm the award.  In a recent case outside of the insurance and reinsurance world, a Missouri federal court addressed a similar question.

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As the Commercial Market Expands Government Terrorism Mechanisms Pull Back

In response to the terrorist attacks of the 2000s, a number of governments established insurance-like mechanisms to address the catastrophic effects of a terrorist attack.  One of the early state-backed facilities is the UK’s Pool Reinsurance Company, Ltd. (“Pool Re”), which was actually set up in the 1990s to address events sparked by the unrest in Northern Ireland.

The Pool Re scheme, which is explained on its website, is somewhat similar to the government-backed legislative mechanism in the US, the Terrorism Risk Insurance Program, often called by its original acronym, TRIA.  With the expansion of the commercial insurance and reinsurance market into terrorism coverage, the US and the UK have modified their programs.  This post discusses a new development at Pool Re, which reflects the growing ability of the commercial market to handle terrorism risks.

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LPTs and Existing Reinsurance Relationships

Elegant couple holding arms

Insurers have been using loss portfolio transfers (“LPTs”) for decades for a host of reasons.  An LPT is a great way to move a legacy book of business off the balance sheet.  What is often forgotten is the interplay between the LPT and existing reinsurance contracts.  This is especially so when the LPT is more retrocessional than reinsurance.


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Ninth Circuit Sends Conflict Between Representations of Authorized Insurer Agent and Certificate of Insurance to Washington Supreme Court

Industrial, Building, Antennas

Certificates of insurance are ubiquitous in construction projects and in many other industries.  But, as most jurisdictions hold, a certificate of insurance is not the functional equivalent of the insurance policy and cannot be used to amend, extend or alter coverage.  It is merely a piece of paper informing the recipients that insurance has been obtained.  But what happens when an authorized agent of an insurance company makes a representation in a certificate of insurance about whether a party is an additional insured and, at the same time, the certificate disclaims its authority and ability to expand coverage?  That is the question that the Ninth Circuit had before it and has certified to the Washington Supreme Court.

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