Category(s): Colorado - 11/06/2020

In the 2020 Legislative Session, Colorado’s General Assembly enacted legislation (House Bill 20-1290) placing additional barriers to asserting the failure to cooperate defense in litigation between an insured and its insurer. The new statute, C.R.S. §10-3-1118, went into effect on September 14, 2020.  It establishes five steps an insurer must take to be eligible to use the failure to cooperate defense:

An insurer must request information from the insured in writing.
The information requested must not otherwise be available to the insurer without the assistance of the insured.
The written request must allow at least 60 days to respond.
The request must be for information a “reasonable person” would determine the insurer needs to adjust the claim or to prevent fraud.
And finally, the insurer must allow the insured an opportunity to cure any defect by informing the insured in writing of the defect within 60 days and allowing the insured 60 days from receipt to cure the defect.

Daniel Furman, Esq. - HALL & EVANS, LLC, (303) 628-3483 , furmand@hallevans.com

Category(s): Florida - 11/06/2020

In late September, the Florida Department of Financial Services (DFS) announced  it had activated the emergency adjuster license application. The application is only available in the event of an emergency which impacts the state of Florida, determined by the DFS. When available, Florida-licensed insurance companies and adjusting firms may apply via their MyProfile  account.

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

Category(s): Florida - 11/06/2020

The Florida Hurricane Catastrophe Fund (FHCF) scheduled a rule development workshop to discuss proposed amendments to Rule 19-8.029, F.A.C., Insurer Reporting Requirements and Responsibilities, regarding insurer exposure and loss reporting requirements for the 2021-2022 contract year and insurer responsibilities. The Notice of Development of Rulemaking can be read in full here .

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

Category(s): Florida - 11/06/2020

On September 22, 2020, the Florida Cabinet approved requests  from the Florida Office of Insurance Regulation (OIR) for publication and final adoption of multiple insurance rules. These rules were in development  throughout 2020 and will be formally adopted if no member of the public timely requests a rule hearing or if a hearing is requested and no notice of change is needed.  The respective notices for the proposed rules are as follows:

69O-137.008 Filing of Statistical and Quarterly Reports for Individually Rated Risks and Excess Rates 
69O-142.015 Standardized Requirements Applicable to Insurers After Hurricanes or Natural Disasters 
69O-143.0465 Group-wide Supervision of Internationally Active Insurance Groups 
69O-143.0466 Contents of Corporate Governance Annual Disclosure 
69O-149.006 Actuarial Memorandum 
69O-171.010 Insurer Assignment Agreement Reporting – Calendar Year Experience 
69O-191.055 Actuarial Memorandum and Definitions 

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

Category(s): Florida - 11/06/2020

On September 4, 2020, Governor Ron DeSantis issued Executive Order 20-213  to extend the state of emergency declared for the entire state due to COVID-19.  The order extends the state of emergency declared in Executive Order 20-52  for another 60 days, until November 3, 2020.

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

Category(s): Florida - 11/06/2020

On September 29, 2020, the Florida Office of Insurance Regulation (OIR) issued a Notice of Development of Rulemaking  to update Chapter 69O-199, F.A.C., Home Warranty Associations. The preliminary text can be found here . If requested in writing and not deemed unnecessary by the agency head, a rule development workshop will be scheduled. Questions or comments regarding the proposed rule development can be directed to Michael Lawrence, Jr., Chief Legal Counsel, Michael.LawrenceJr@floir.com, (850)413-4112.

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

Category(s): Georgia - 11/06/2020

In Henry’s Louisiana Grill v. Allied Ins. Co. of America (Civil Action No. 1:20-CV-2939-TWT), decided October 6, 2020, Georgia’s Northern District Court (Atlanta Division) granted the insurer’s motion to dismiss the business interruption insurance coverage claim of the restaurant and denied its motion seeking to have the Georgia Supreme Court weigh-in on an certified question of law. Like many other courts around the country, the federal court held that the eatery did not experience a “direct physical loss of or damage to property” because of the Georgia Governor’s March 14, 2020 COVID-19 related Public Health State of Emergency executive order, which did not impose any physical change on the covered premises. Also, the court did not find the policy’s language ambiguous.  Likewise, the civil authority coverage under the insurance policy at issue was not triggered because the executive order did not prohibit patrons from accessing the restaurant and was at most a stay-at-home advisory order, recognizing an already present public health threat. As a result, the court declined to exercise its discretion to certify the question of what is the meaning of “direct physical loss of or damage to property”, rejecting the plaintiff insured’s argument that there is a “substantial doubt regarding the status of state law” on the issue, which is requirement for certifications of questions of law to the state’s supreme court.

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

Category(s): Georgia - 11/10/2020

The Georgia Court of Appeals reversed the trial court’s denial of the insurer’s motion for summary judgment on its denial of insurance coverage under a farm owners insurance policy for a claim based on the total destruction of a residence due to a fire in American Reliable Ins. Co. v. Lancaster (Case Number: A20A0869, October 2, 2020).  The Lancasters purchased an initial insurance policy for their farm from insurance agent Macie Yawn, who worked for the Charles Robinson Insurance Agency. She collected the insurance premiums paid by the Lancasters for that initial policy. Towards the end of the period of the initial policy, American Reliable sent a policy renewal notice to the Lancasters instructing them to pay the premiums due for the renewal policy through a website or by mailing a check directly to American Reliable; payment of premiums to Charles Robinson Insurance Agency was not listed as an available premium payment method. After not having received the premium payment for the policy’s renewal period, American Reliable sent a notice of cancellation for the policy that included notice that the premium could be paid online, by phone or by mailing a check directly to American Reliable. The policy lapsed five months before the fire loss occurred, and during that period the Lancasters had paid premiums to agent Yawn who did not remit them to American Reliable. In reversing the lower court’s denial of American Reliable’s motion for summary judgement on the Lancasters’ bad faith denial of insurance coverage claim, the Court of Appeals found that agent Yawn, who later pled guilty to 10 counts of insurance fraud for pocketing insurance premiums paid by her customers, did not have apparent authority to collect premiums from the Lancasters on behalf of American Reliable for the renewal policy, which never became effective because Yawn never paid those premiums to American Reliable. Because the policy’s renewal and cancellation notices clearly stated that the renewal policy was a direct bill, not an agency bill, policy, there was no justifiable reliance by the Lancasters on the prior course of conduct for how they had paid the premiums for the initial policy to Yawn.

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

Category(s): Georgia - 11/06/2020

Last month, the Eleventh Circuit Court of Appeals certified three novel questions of law involving bad faith insurance claims to the Georgia Supreme Court in Whiteside v. GEICO Indemnity Co. (D.C. Docket No. 4:16-cv-00313-CDL):

When an insurer has no notice of a lawsuit against its insured, does O.C.G.A. § 33-7-15 and a virtually identical insuring provision relieve the insurer of liability from a follow-on suit for bad faith?
If the notice provisions do not bar liability for a bad-faith claim, can an insured sue the insurer for bad faith when, after the insurer refused to settle but before judgment was entered against the insured, the insured lost coverage for failure to comply with a notice provision?
Does a party have the right to contest actual damages in a follow-on suit for bad faith if that party had no prior notice of or participation in the original suit?

In this case, Bonnie Winslett, while driving her friend’s auto, hit cyclist Terry Guthrie. GEICO had insured the auto at the time. Guthrie received medical treatments following the accident. GEICO notified Winslett (not the GEICO policyholder) that GEICO would handle the injury directly with the cyclist’s attorney. Guthrie’s attorney sent a demand letter to GEICO requesting $30,000, the policy’s limit, in response to which GEICO offered $12,000. GEICO never received a response to its counter off. Unbeknownst to GEICO, Guthrie sued Winslett, six days after GEICO sent its counteroffer. Winslett did not notify GEICO of the lawsuit, never responded to it and had a $2.9 million default judgment entered against her. GEICO was unsuccessful in setting aside the default judgment. Guthrie then forced Winslett into an involuntary Chapter 7 bankruptcy proceeding, and Guthrie’s bankruptcy attorney became the trustee of Winslett’s bankruptcy estate. Winslett’s bankruptcy trustee, being represented by her insurance coverage counsel, then sued GEICO for bad faith for failure to accept Guthrie’s original settlement demand. GEICO lost in the trial court, arguing that (i) it was relieved of liability under Georgia’s notice statute (O.C.G.A. § 33-7-15) because it never received notice of the original lawsuit, (ii) it was not the proximate cause of the default judgment because of its lack of notice and (iii) it would be unfair and unconstitutional to use the default judgment as the measure of damages for GEICO’s liability because it had no opportunity to contest the damages in the default judgment proceeding. O.C.G.A. § 33-7-15 requires an insured to send to its insurer, as soon as practicable after receipt thereof, a copy of every summons or other process relating to the coverage under the policy and to cooperate otherwise with the insurer in connection with the defense of any action or threatened action covered under the policy, and if the insured fails to do, such failure is a breach of the insurance contract which, if prejudicial to the insurer, relieves the insurer of its obligation to defend its insured under the policy and of any liability to pay any judgment or other amount on behalf of its insured. The Georgia Supreme Court will next decide how the notice statute interacts with the tort of bad-faith failure to settle.

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

Category(s): Washington - 11/06/2020

The Washington State Insurance Commissioner issued a cease & desist order to General Motors, LLC on October 23, 2020 to stop selling its Extended Limited Warranty. Order 20-0785 includes allegations that General Motors, LLC is acting in Washington as an unlicensed vehicle contract service provider and must immediately stop the alleged unlicensed activity. Click here  to read Order 20-0785 on state’s website.

Steven Beeghly, Esq. - BEEGHLY RICOY LAW GROUP, Serving the Pacific Northwest, (206) 618-6110 , sb@BeeghlyRicoy.com