Category(s): Arizona - 02/08/2018

On January 11, 2018, Arizona Interim Insurance Director Leslie Hess resigned her position effective as of the close of business on January 26. The Governor’s Office has not yet named a replacement for Ms. Hess but is expected to make an announcement in the near future.

S. David Childers, Esq.

Category(s): Florida - 02/08/2018

On December 6, 2017, the Florida Office of Insurance Regulation (OIR) established the 2018 personal and commercial property insurance rates for Citizens Property Insurance Corporation (Citizens).  OIR’s rate filing review process for Citizens was delayed due to Hurricane Irma and the subsequent Emergency Order OIR issued to assist consumers recovering from that storm.  In developing the new rates, OIR considered testimony it received during a public rate hearing it held on August 23, 2017, in Miami, Florida, and also considered comments it received via email.  The Orders establishing the new rates can be accessed here: Personal Property Order, Commercial Property Order.  The effective date (for both new and renewal rates) is no earlier than May 1, 2018.  For additional information, please refer to the OIR's Press Release.

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

Category(s): Florida - 02/08/2018

On December 7, 2017, Florida Senator Greg Steube introduced Senate Bill 1168, which would amend certain sections of the Florida Insurance Code to provide, in pertinent part, that certain attorney fees and costs paid by property insurers may not be included in the property insurer’s rate base and may not be used to justify a rate increase or rate change.  The bill would further amend the Code to provide that personal lines residential and commercial residential property insurance policies may not restrict the assignment of post-loss benefit.  Importantly, under the new statutory language proposed by the bill, an agreement to assign post-loss benefits of a residential homeowner’s property insurance is not valid unless specified conditions are met.  For additional information, please refer to the Florida Senate’s webpage.

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

Category(s): Georgia - 02/08/2018

Allstate Insurance Company v. Airport Mini Mall LLC, WL42800628 (N.D. Ga. 2017)

On September 26, 2017, the United States District Court for the Northern District of Georgia ruled that Airport Mini Mall could not avoid an Allstate Insurance Company’s commercial general liability insurance policy’s notice requirement based on Airport Mini Mall’s subjective belief that it was not liable to third party claimants and that cease and desist letters sent to Airport Mini Mall were sufficient to trigger the insured’s duty to provide notice to Allstate.

Allstate had issued a commercial general liability insurance policy to Airport Mini Mall.  The mall was raided by the Department of Homeland Security, and counterfeit items were seized and some of the mall’s tenants were arrested.  Subsequent to the raid, Airport Mini Mall received cease and desist letters from a retailer alleging trademark violations related to the sale of sunglasses at the mall and then filed a lawsuit against the mall alleging contributory trademark violations by Airport Mini Mall.  Airport Mini Mall did not notify Allstate of the lawsuit until almost two months after it had been filed.  Allstate sought a declaratory judgment that Airport Mini Mall had failed to comply with the notice provisions contained in the commercial general liability insurance policy issued to Airport Mini Mall which required it to notify Allstate of an occurrence or an offense which may lead to a claim “as soon as practicable.”  Both parties filed motions for summary judgment in the declaratory judgment action.  Allstate argued that Airport Mini Mall’s delay in providing notice to Allstate had prejudiced its ability to investigate the claim, consider pre-suit settlement and adequately prepare a defense. Airport Mini Mall argued that it did not notify Allstate of the claim until after the lawsuit was filed, because it did not believe it could be held responsible for the sale of counterfeit goods by its tenants.

The United States District Court for the Northern District of Georgia granted Allstate’s motion for summary judgment ruling that the insured’s failure to comply with a proper notice provision bars insurance coverage under Georgia law, because the notice provision is a proper condition precedent to coverage.  The District Court further noted that Georgia courts have interpreted “as soon as practicable” in notice provisions as requiring immediate notice based on the reasonable diligence of the insured.  Finally, the District Court ruled that an insured cannot avoid the notice provisions in an insurance policy based upon the subjective belief by the insured that it may not be liable for a particular claim; and that in the instant case, the cease and desist letters provided the insured with sufficient information to trigger its duty to provide notice to Allstate.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com
David M. Green, Esq. - LOCKE LORD LLP, (404) 870-4657 , david.green@lockelord.com

Category(s): Georgia - 02/08/2018

Hughes v. First Acceptance Insurance Company of Georgia, Inc.  Civil Case A17A0735 (Ga. App. 2017)

On December 1, 2017, the Georgia Court of Appeals reversed summary judgment granted to First Acceptance’s claims, but affirmed the denial of summary judgment to Robert Hughes, as administrator of Ronald Jackson’s estate, on Hughes’ claims alleging First Acceptance failed to properly settle insurance claims, because genuine issues of material fact remained.  In addition the Court affirmed the grant of summary judgment to First Acceptance on Hughes’ claims for bad faith and punitive damages.

The lawsuit arose out of an automobile accident caused by Jackson which resulted in Jackson’s death and injuries to Julie An and her minor child, Jina Hong.  Jackson had an automobile insurance policy with First Acceptance with liability insurance limits of $25,000 per person and $50,000 per accident.  Counsel for An and Hong contacted First Acceptance and sent two letters to counsel for First Acceptance.  Forty-one days after sending the letters, counsel for An and Hong asserted to counsel for First Acceptance that the letters had constituted an offer to settle their claims and set a thirty day deadline for response.  Counsel for An and Hong then filed a lawsuit against Jackson’s estate and sent counsel for First Acceptance another letter withdrawing the settlement offer.  First Acceptance later offered to settle both An and Hong’s claims for $50,000, but counsel for An and Hong rejected the offer.  The lawsuit proceeded to a jury trial and a final judgment was entered in favor of An and Hong, including a jury award of $5,334,200 for Hong’s injuries.  Hughes then filed a lawsuit against First Acceptance claiming that First Acceptance had negligently or in bad faith failed to settle Hong’s claim.  First Acceptance had tendered $25,000 as payment for Hong’s judgment; and thus, Hughes sought to recover the remaining unpaid portion of the judgment, plus punitive damages and attorney’s fees from First Acceptance.

The Georgia Court of Appeals found that the trial court erred in granting summary judgment to First Acceptance on Hughes’ claim for failure to settle.  Specifically, the Georgia Court of Appeals determined that First Acceptance had knowledge of the letters from An and Hong’s counsel and genuine issues of material fact existed as to whether Hong had offered to settle her claims within First Acceptance’s insurance policy limits.  The Georgia Court of Appeals further determined that genuine issues of material fact existed as to whether First Acceptance acted reasonably in responding to such offer by Hong to settle.  However, the Georgia Court of Appeals determined that the trial court properly granted First Acceptance’s motion for summary judgment on Hughes’ claim for punitive damages and attorney’s fees on the grounds that Hughes failed to present any evidence of bad faith or willful or wanton conduct by First Acceptance.  Finally, the Georgia Court of Appeals confirmed the denial of Hughes’ motion for summary judgement on the failure to settle claim, finding that genuine issues of material fact existed as to whether there was a time limited settlement offer and whether First Acceptance acted as a reasonably prudent insurer would in responding to any such offer.

Brian T. Casey, Esq. - LOCKE LORD LLP, (404) 870-4638 , bcasey@lockelord.com

Category(s): Illinois - 02/08/2018

Illinois DOI Director Jennifer Hammer recently asked the United States Court of Appeals for the Federal Circuit in Washington D.C. to require the federal Centers for Medicare and Medicaid Services (CMS) to honor its statutory and contractual obligations to Land of Lincoln Mutual Health Insurance Company (LLH) under the federal Risk Corridor Program. LLH is in liquidation in part due to the failure of CMS to pay such obligations.

Daniel A. Cotter, Esq. - Dickinson Wright PLLC, (312) 423-8170 , DCotter@dickinson-wright.com

Category(s): Nebraska - 02/08/2018

Matt Holman has been appointed General Counsel of the Nebraska Department of Insurance. He succeeds Christine Neighbors who resigned to join Ameritas.

Lawrence F. Harr, Esq. - LAMSON, DUGAN & MURRAY, LLP, (402) 397-7300 , lharr@ldmlaw.com

Category(s): New York - 02/08/2018

On December 12, 2017, New York DFS Superintendent Maria T. Vullo announced the ten appointees who will constitute New York’s first State Insurance Advisory Board (SIAB).  See DFS Press release: Superintendent Maria T. Vullo Announces Formation of New State Insurance Advisory Board. The Board consists of seven representatives of domestic insurers, one insurance producer, and two consumer representatives. Id.; New York Insurance Law § 201. 

 The initial Assembly bill, from which NYIL § 201 is derived, called for a seventeen-person board that would have included “five representatives of foreign insurance companies,” and one representative each for consumers and producers.   Governor Andrew Cuomo intervened and the Chair of the Senate Insurance Committee proposed several amendments to the Assembly bill, including the elimination of representatives of foreign insurers doing business in New York State, a reduction in the required number of annual meetings, and other changes, including a change that allows the SIAB  to comment on proposed regulations only at the Superintendent’s request.

James Veach, Esq., (201) 927-0759

Category(s): Tennessee - 02/08/2018

The Tennessee Department of Commerce and Insurance (TDCI) has issued a Bulletin (17-03) requiring domestic stock insurance companies to provide both electronic and hard copy notice to TDCI’s Financial Affairs Section prior to payment of ordinary and extraordinary dividends.  The dual notice requirement is effective as of January 1, 2018, with the electronic notice to be submitted via email to NoticeTo.TDCI@tn.gov .

T. Stephen C. Taylor, Esq. - BASS, BERRY & SIMS, PLC, (615) 742-7758 , staylor@bassberry.com
Robins H. Ledyard, Esq. - BASS, BERRY & SIMS, PLC, (615) 742-6259

Category(s): Virginia - 02/08/2018

Scott White, formerly Deputy General Counsel—Financial Services of the Virginia State Corporation Commission, was appointed to serve as the Virginia Commissioner of Insurance on January 1, 2018, replacing Commissioner Jackie Cunningham, who retired.  Commissioner White, who has nearly 20 years of experience at the Commission, is expected to maintain continuity but also bring change to the Virginia Bureau of Insurance, which is the largest division of the Commission.  Commissioner White brings extensive experience in navigating the changing health insurance landscape, while also having a broader understanding of financial services, given his previous work with the banking and securities divisions at the Commission.  Commissioner White, educated at the University of Virginia and University of Missouri School of Law, will lead the Bureau’s legislative efforts at the Virginia General Assembly, which commenced on January 10, 2018.

Duke de Haas, Esq. - Allianz Global Assistance, (804) 281-6707 , duke.dehaas@allianz.com