Category(s): Connecticut - 02/01/2011

The Connecticut Insurance Department (the “CID”) has amended Conn. Agencies Regs. § 38a-8-103, which outlines the standards the Connecticut Insurance Commissioner (the “Commissioner”) may consider in determining whether the continued operation of an insurer transacting business in Connecticut might be deemed hazardous to policyholders, creditors and the general public.  The amendment revises several existing standards and adds new standards that the Commissioner is now permitted to consider, including a catch-all provision permitting the Commissioner to consider “any other finding determined by the Commissioner to be hazardous to the insurer’s policyholders, creditors or general public.” 

The CID also amended related Conn. Agencies Regs. § 38a-8-104 to provide the following additional remedial measures that the Commissioner may require of an insurer that he or she determines to be in hazardous financial condition: (1) correct corporate governance practice deficiencies; (2) provide a business plan to the Commissioner; and (3) adjust rates for non-life insurance products.

The amendments, which were promulgated in order to bring Conn. Agencies Regs. §§ 38a-8-103 and 104 into consistency with the NAIC model regulations on-point, became effective December 8, 2010.

Alan J. Levin, Esq. - LOCKE LORD LLP, (212) 912-2777 , alan.levin@lockelord.com
Michael T. Griffin, Esq. - ACCEL LAW GROUP P.C., (860) 761-8550 , mgriffin@accelcompliance.com

Category(s): Florida - 02/01/2011

In an October 18, 2010 order, a federal judge denied a Defendants' motion to dismiss a putative class action alleging that Lloyd's of London property insurance policies violate Florida law by omitting the existence of separate deductibles for hurricane damage.  In the case, the Plaintiffs sought to represent a class of policyholders who submitted claims for hurricane damage to Lloyd's under surplus lines policies that did not contain Florida statutory language requiring property insurance policies to include a consumer warning about the existence of a separate hurricane deductible in 18-point or larger boldface type.  The Lloyds Defendants asserted that the Plaintiffs' Fifth Amended Complaint should be dismissed, since section 626.913(4), F.S. states that "Except as may be specifically stated to apply to surplus lines insurers, the provisions of chapter 627 do not apply to surplus lines insurance authorized under ss. 626.913-626.937, the Surplus Lines Law."  The statute, which was amended in 2009 to include the above provision, makes it applicable to all lawsuits filed after May 15, 2009.  The Court, however, determined that in the instant case, the Fifth Amended Complaint related to the prior litigation, which was commenced in 2008.  Hence, the legislative change did not prohibit the Plaintiffs' cause of action.   To view the October 18 order, click here.

Richard J. Fidei, Esq. - GREENBERG TRAURIG LLP, (954) 592-5530

Category(s): Florida - 02/01/2011

The Florida Hurricane Catastrophe Fund ("FHCF") has published coverage selections and premium calculations as of December 31, 2010 for the 2010/2011 FHCF Contract Year.  To view this information, click here.  Coverage selections and premium calculations for the FHCF's 2006/2007, 2007/2008, 2008/2009 and 2009/2010 Contract Years, updated as of December 31, 2010, are accessible by clicking here.  To view 2010/2011 FHCF Contract Year payout multiples for mandatory and Temporary Increase in Coverage Limits coverage, click here.

Richard J. Fidei, Esq. - GREENBERG TRAURIG LLP, (954) 592-5530

Category(s): Florida - 02/01/2011

In the recent case of Frederick W. Kortum, Jr. v. Alex Sink, the Florida First District Court of Appeal issued an opinion holding unconstitutional section 626.854(6), Florida Statutes (2008), which barred solicitation initiated by public adjusters for a period of 48 hours after the occurrence of an event that may be the subject of a claim under an insurance policy. The Circuit Court for Leon County had previously upheld the ban.  In reversing, the Court set forth that the statutory provision regulates commercial speech and is protected by the First Amendment.  As such, the matter was governed by the U.S. Supreme Court decision in Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557 (1980).

The Court ultimately held the statutory provision unconstitutional because it determined that it was more extensive than necessary to serve the asserted governmental interest.  The decision hinged on whether the statute contained a complete ban on all solicitation for 48 hours, or prohibited face-to-face and telephonic solicitation, while still allowing for written and email solicitations.  After a lengthy discussion, the Court determined that it had no evidence to suggest the limitation did not include all public adjuster-initiated contact, whether electronic, written or oral.  The Court pointed out that there is no legislative history to support a limiting interpretation, and the plain language of the statute is all-encompassing.  On a positive note, the Court seems to have left the door open for legislative action limiting the statutory ban to only in-person and telephonic conduct initiated by public adjusters.  

To view a copy of the opinion, click here.

Fred E. Karlinsky, Esq. - GREENBERG TRAURIG, P.A., (954) 768-8278 , karlinskyf@gtlaw.com

Category(s): New Mexico - 02/01/2011

On October 18, 2010, the New Mexico Supreme Court issued a pair of slip opinions regarding the requirements for insurers to obtain valid rejections of uninsured motorist/underinsured motorist (“UM/UIM”) coverage in New Mexico.   In Progressive Northwestern Ins. Co. v. Weed Warrior Services, the Court held that the New Mexico Motor Vehicle Code, specifically NMSA 1978, § 66-5-301, requires an insurer to offer UM/UIM coverage in an amount equal to the liability limits of the policy and that the choice of the insured to purchase any lower amount functions as a rejection of the maximum amount of coverage statutorily possible.  The court held that the offer of UM/UIM coverage must include the maximum amount statutorily available in order to effectuate the policy of the Legislature.   In Jordan v. Allstate Ins. Co., the Court held that the rejection of UM/UIM coverage equal to the liability limits in an automobile insurance policy must be made in writing and must be made a part of the insurance policy that is delivered to the insured.  In order to honor these requirements effectively, insurers must provide the insured with the premium charges corresponding to each available option for UM/UIM coverage so that the insured can make a knowing and intelligent decision to receive or reject the full amount of coverage to which the insured is statutorily entitled.  If an insurer fails to obtain a valid rejection, the policy will be reformed to provide UM/UIM coverage equal to the limits of liability.

Gary Kilpatric, Esq. - MONTGOMERY & ANDREWS, P.A., (505) 982-3873
J. Brent Moore, Esq. - Moore Law, PC, (505) 870-7496 , jbm@moorelawpc.com

Category(s): Ohio - 02/01/2011

On January 10, 2011, newly elected Ohio Lt. Governor, Mary Taylor was appointed Ohio Superintendent of Insurance. She will hold both jobs at the same time.  Ms. Taylor is a CPA and was most recently Auditor of the State of Ohio.  She previously was a state representative from Northeastern Ohio.

Alan F. Berliner, Esq. - THOMPSON HINE LLP, (614) 469-3268 , Alan.Berliner@ThompsonHine.com

Category(s): Rhode Island - 02/01/2011

Insurance Regulation 11, governing surplus lines brokers, was recently amended to: 1) allow a non-resident surplus lines broker to apply for a non-resident surplus lines broker's license without first obtaining a resident property and casualty insurance producer’s license; 2) increase the tax from 3% to 4% on gross premiums for policies effective on or after July 1, 2011; 3) maintain the 3% tax on gross premiums for policies effective prior to July 1, 2010; and 4) require brokers to include written notice in applications and policies about the unavailability of benefits under Rhode Island’s Insurers Insolvency Fund.  The amended regulation became effective January 14, 2011.

Jennifer R Cervenka, Esq.
Melissa E Darigan, Esq - PARTRIDGE SNOW & HAHN LLP, med@psh.com
John J. Partridge, Esq. - PARTRIDGE SNOW & HAHN LLP, (401) 861-8200