Archive for April, 2009

Court Allows Pre-Certification Discovery to Find New Class Representative in Insurance Code Section 1861.02(c) Persistency Discount Case

In Safeco Insurance Co. v. Superior Court (Lisa Karman), No. B213044 (April 30), a unanimous Division 3 of the Second Appellate District (Justice Croskey writing) upheld the trial court’s decision to allow pre-class certification discovery by a designated potential class representative without standing for the purposes of finding a new class representative.  The substantive claims [...]

April 30, 2009   Posted in: Blog  Comments Closed

Commissioner Calls On WCIRB To Withdraw Claims Cost Benchmark Increase

As we reported in our March 18 blog post, the Commissioner held a hearing yesterday on medical cost inflation issues associated with the Workers Compensation Insurance Rating Bureau (WCIRB) request for what the Commissioner now describes as a 23.7 percent increase in the the claims cost benchmark.  The Commissioner has asked the WCIRB to withdraw [...]

April 29, 2009   Posted in: Blog  Comments Closed

Time for DOI to Clarify Policy on Use of Credit-Scoring to Determine Installment Billing Options

The use of an insured’s credit score to determine his or her automobile insurance premium is famously not a permissible rating factor under Insurance Code Section 1861.02 (a).  However,  since Proposition 103 was passed and the mandatory and optional rating factors promulgated, credit-scoring has been used periodically by insurers to determine an insured’s eligibility for [...]

April 28, 2009   Posted in: Blog  Comments Closed

Insurer Estopped To Assert Failure to File Timely Probate Claim Bars Negligence Action

Estate of Prindle v. Harris, No. C055832 (April 20), is an appellate decision from the Third District involving (1) a probate action; (2) a negligence action against the estate of the deceased, Angela Prindle, alleging she negligently failed to warn Jessica Harris, her sister, that her estranged husband, David Prindle, would return to the former [...]

April 23, 2009   Posted in: Blog  Comments Closed

CA Supreme Court Says CLRA Does Not Apply to Life Insurance, But Declines to Opine On Other Lines

In our March 5 blog post, we reported briefly on the oral argument in Fairbanks v. Superior Court (Farmers New World Life Insur. Co.), No. S157001, a case in which the Court of Appeal had held that the Consumer Legal Remedies Act (CLRA) does not apply to insurance.  Today the Supreme Court unanimously affirmed, as [...]

April 20, 2009   Posted in: Blog  Comments Closed

AB 1521 (Jones) Amended and Moves Forward: Does It Present An Opportunity to Revisit Post-Krumme Agent/Broker Law?

AB 1521 (Jones), discussed in our March 30 blog post, was amended by its author and then passed out of the Assembly Health Committee.  It is scheduled to be heard in the Assembly Insurance Committee on April 22.  The amendments toned down the “fiduciary” language in the prior version to a duty “of honesty, good [...]

April 20, 2009   Posted in: Blog  Comments Closed

Claims Administrator Owes Duty of Care to Protect Plan Member from Physical Injury

In Mintz v. Blue Cross of California, No. B207405 (April 16), Division 8 of the Second Appellate District reversed a dismissal of a complaint brought by Superior Court Judge David Mintz arising out of the denial of coverage for treatment deemed “investigational.”  Mintz was a member of PERS Choice, a medical plan funded by the [...]

April 16, 2009   Posted in: Blog  Comments Closed

Husband Has No Personal Claim Against Spouse’s Health Insurer

In The Mega Life and Health Insurance Co. v. Superior Court (Christopher Clossen), No. E045969 (April 14), the Fourth Appellate District, reversing a trial court’s denial of a motion for summary adjudication, decided on a petition for a writ of mandate that Mega was entitled to summary adjudication of Christopher Clossen’s fraud cause of action, [...]

April 14, 2009   Posted in: Blog  Comments Closed

Court Erroneously Imposed Sanctions Against NonParty Insurer for Settlement Conference Conduct

Vidrio v. Hernandez (Mercury Insurance Company, Objector and Appellant), No. B207391 (April 13) involves an appeal by Mercury of a trial court’s $1,857.50 sanctions order arising out of the alleged failure of Mercury’s adjuster and retained counsel to participate in good faith at a settlement conference.  The Second Appellate District held that neither Code of [...]

April 13, 2009   Posted in: Blog  Comments Closed

Prop.103 Didn’t Repeal California Binding Law

The Department of Insurance periodically questions insurers’ rejections of bound automobile insurance applications on the basis that such rejections don’t comply with Insurance Code Section 1861.03 (c), setting forth three exclusive grounds for “cancellation or nonrenewal of a policy of automobile insurance”: nonpayment, fraud or material misrepresentation, and substantial increase in the hazard insured against.  [...]

April 13, 2009   Posted in: Blog  Comments Closed

Commissioner Proposes Final Title Marketing Representative Regulations

In our March 30 blog post, we referenced the Commissioner’s enhanced authority over title marketing representatives.  This authority arises out of SB 133 (Aanestad), enacted last year, which mandates that title marketing representatives hold a certificate of registration from the Department of Insurance.  On May 26, the Commissioner will hold a public hearing on proposed [...]

April 13, 2009   Posted in: Blog  Comments Closed

Low Cost Auto Plan of Operations Adopted

The Insurance Commissioner has approved, and incorporated by reference into Exhibit E to CCR Section 2498.6, a separate plan designated California Automobile Insurance Low Cost Program Plan of Operations effective June 19, 2001 with amendments and effective dates through May 11, 2009.  The document is the statutorily-required plan for apportionment among insurers required to participate [...]

April 10, 2009   Posted in: Blog  Comments Closed

Ninth Circuit Certifies Severability of Interests Clause Issue to CA Supreme Court

The Ninth Circuit, in Minkler v. Safeco Insurance Co., No. 07-56689 (April 8), has certified to the California Supreme Court an unresolved liability insurance policy issue relating to the interaction of a standard intentional acts exclusion with a standard severability of interests clause found in many homeowners and other liability policy forms.  Scott Minkler sued [...]

April 9, 2009   Posted in: Blog  Comments Closed

Can Auto Insurers Be Forced to Cover Unlicensed 13-Year Olds?

Department of Insurance market conduct examinations regularly ding insurers for soliciting named driver exclusion forms for unlicensed and underage household residents. Insurers, particularly those selling “family” automobile policies in which coverage for resident relatives is automatic, argue that a refusal to provide such an exclusion is a “substantial increase in the hazard insured against” because [...]

April 7, 2009   Posted in: Blog  Comments Closed

Different Definitions of Flood in Primary and Excess Policies Do Not Render Excess Policy Ambiguous

Northrop Grumman Corp. v. Factory Mutual Insurance Co., No. 07056760 (9th Circ. August 14, 2008; amended April 2) arose out of Factory Mutual’s appeal of a summary judgment against it after Factory Mutual denied coverage under an excess policy  for water damage at Northrop’s Mississippi subsidary caused by Hurricane Katrina.  A primary policy, in which [...]

April 3, 2009   Posted in: Blog  Comments Closed