Archive for June, 2009

New Mandatory Medicare Secondary Payer Reporting Provisions Begin To Take Effect

Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (P.L. 110-173) added new mandatory secondary payer reporting requirements for liability insurance, no-fault insurance, and workers’ compensation and for group health insurance.  See 42 U.S.C. Section 1395y (b) (7) and (8).  Although the implementation plans for liability insurance, no-fault insurance, and workers’  compensation [...]

June 29, 2009   Posted in: Blog  Comments Closed

Criminal Restitution Statute Does Not Bar Civil Action by Insurer Assigned Victim’s Claim

In Vigilant Insurance Co. v. Chiu, No. B209550 (June 29),  Division Three of the Second Appellate District held that the victim’s crime insurer, to which the victim had assigned its claims, could pursue a civil action against a criminal who is  subject to a Penal Code Section 1202.4 criminal restitution order.  The case involved almost [...]

June 29, 2009   Posted in: Blog  Comments Closed

Commissioner Announces Evaluation of Insurer Investments in Iran

Insurance Code Section 1241.1, which became effective on January 1, prohibits domestic insurers from acquiring any investment “respecting” a foreign jurisdiction, or any investment denominated in the currency of such jurisdiction, if that jurisdiction is designated a state sponsor of terrorism by the U.S.  Secretary of State under federal law.  Acting under this new authority, [...]

June 29, 2009   Posted in: Blog  Comments Closed

State Farm Not Liable For Intentional Acts or Purportedly Negligent Conduct Related To Such Acts

State Farm General Insurance Co. v. Mintarsih, No. B202888 (June 25), a decision by Division Three of the Second Appellate District, is a basically conventional application of California intentional acts law to a false imprisonment case with some useful and novel guidance on ancillary defense duty issues.  Mintarsih sued Dennis and Dina Lam, for whom [...]

June 25, 2009   Posted in: Blog  Comments Closed

Commissioner Releases Revised Pay-Drive (Usage Based Auto Insurance) Regulations

On October 20, 2008, the Commissioner held a public hearing on his proposed Pay-Drive (Usage Based Auto Insurance) regulations.  Yesterday he issued a revised version of same.  The revisions focus on the various methodologies that may be employed including verified odometer readings, odometer readings obtained by automobile repair dealers or smog check stations, and technological [...]

June 25, 2009   Posted in: Blog  Comments Closed

Second Appellate District Holds Co-Insurers Received Adequate Notice and Were Therefore Liable To Contribute to Defense Costs

In OneBeacon America Insurance Co. v. Fireman’s Fund Insurance Co., et al, No. B209526 (June 24), Division One of the Second Appellate District, affirming in part and reversing in part a trial court judgment, considered the issue of the notice required to trigger an equitable defense costs contribution claim against other insurers by an insurer [...]

June 24, 2009   Posted in: Blog  Comments Closed

Ninth Circuit Upholds Centre Insurance Company Claim Against Superior National Insurance Group Bankruptcy As Properly Revived Following Post-Petition Preference Action

SNTL Corp. et al v. Centre Insurance Company, No. 08-60001 (June 23), arose out of the bankruptcy of Superior National Insurance Group (SNIG) and its non-insurance affiliates.  SNIG had guaranteed the performance of its insurance affiliates’ obligations to Centre.  Following their defaults, the insurance affiliates paid Centre $163.4 million in satisfaction of a $180 million [...]

June 23, 2009   Posted in: Blog  Comments Closed

Second Appellate District Explains Rules of Contract Interpretation in Upholding Insurers’ Position As to Meaning of “Occurrence ” in Excess Workers’ Compensation Insurance Dispute

Supervalu, Inc. v. Wexford Underwriting Managers, Inc., et al, No. B206501 (June 3; ordered published June 22), involves the interpretation of the term “occurrence” in excess workers’ compensation insurance policies provided to Supervalu by TIG Insurance Company, Continental Casualty Company, and Wexford.  Supervalu contended that the term, consistent with its purported understanding of industry usage, [...]

June 22, 2009   Posted in: Blog  Comments Closed

Insurance Agent Not Liable When Coverage Requested Was Obtained

In an unpublished opinion upholding a summary judgment, the Fourth Appellate District has held, in Plowy v. R. W. O’Neal Insurance Agency, No. E045153 (June 17), that an insurance agency which obtained, as requested,  a guaranteed replacement policy for a homeowner and had no subsequent involvement with that homeowner’s coverage is not responsible when the [...]

June 17, 2009   Posted in: Blog  Comments Closed

Surety With Contingent Claim Against Debtor Has Standing To Seek Relief from Automatic Bankruptcy Stay

In Kronemyer v. American Contractors Indemnity Co., BAP No. CC-08-13543-DMkPa (May 27), a bankruptcy appellate panel considered a case in which the bankruptcy court had granted relief from the automatic stay to allow both American Contractors’ objection to the final accounting of the debtor, David Kronemyer, to whom American Contractors had issued two fiduciary bonds [...]

June 15, 2009   Posted in: Blog  Comments Closed

Insurer Hit With $6 Million Bad Faith Verdict After Withdrawing Construction Defect Case Defense

In Hodge v. Lincoln General Insurance Company, No. 8:08-cv-00288 (C.D. Ca., filed March 14, 2008), an Orange County federal court jury hit an insurer with a $6 million verdict arising out of a construction defect case.  According to published reports, the plaintiffs paid $2.9 million for a custom home built by Kirkpatrick Development, Inc.  Following [...]

June 12, 2009   Posted in: Blog  Comments Closed

Pacific Specialty Wins Misrepresentation/Rescission Defense In HO Fire Claim

Sanchez v. Pacific Specialty Insurance Co., Orange County Superior Court Case No. 07CC06934 (May 8), involved a successful defense based on misrepresentation by Pacific Specialty of a homeowners’ insurance claim following a fire.  According to published reports of the trial, plaintiff Servando Sanchez purchased a home in Indio in 1997, and, a year later, homeowners’ [...]

June 12, 2009   Posted in: Blog  Comments Closed

New York Life Not Responsible For Agent’s Acts As An Independent Contractor

Oravecz v. New York Life Insurance Co., No. B206066 (May 11; ordered published, June 9), is a comprehensive and helpful review, by a generally liberal Division One of the Second Appellate District, of a principal’s responsibility for alleged wrongs committed by an agent/registered representative given his capacity as a non-employee independent contractor.  Paul Oravecz sued [...]

June 9, 2009   Posted in: Blog  Comments Closed

Updates on AB 802 (Duvall) and AB 1521 (Jones): Gutted and Amended

In our March 27 blog post, we reported on AB 802 (Duvall), which would have amended Insurance Code Section 758.5 to protect insurers disclosing repair shop alternatives to claimants.  In our March 30 and April 20 blog posts, we discussed AB 1521 (Jones)’s impact on agent/broker law.  Both bills were subsequently “gutted and amended”, and [...]

June 9, 2009   Posted in: Blog  Comments Closed

AB 470 (Niello) Legislation to Speed Up Insurance Claims Settlements Moves to Senate

AB 470 (Niello), which would amend Insurance Code Section 791.13(s) to allow insureds’ lawyers direct access to police reports if their clients have a right to such access, passed the Assembly unanimously on May 14,  and has now moved to the Senate.  It is scheduled to be heard in the Senate Banking, Finance & Insurance [...]

June 8, 2009   Posted in: Blog  Comments Closed

Hospital Lien Act Inapplicable To Injured Party’s First Party UM Insurer

In Weston Reid, LLC v. American Insurance Group, Inc., No. E044892 (June 4), the Fourth District Court of Appeal upheld the dismissal of a claim brought by a hospital’s assignee against its patient’s first party uninsured motorists insurer.  AIG’s insured was severely injured in an automobile accident and subsequently treated at Mercy General Hospital.  Under [...]

June 5, 2009   Posted in: Blog  Comments Closed

The Next Big UCL Issue: Are Damages Enough To Establish Proposition 64 Standing For UCL Injunctive Relief?

In our March 21 blog post, we mentioned briefly Maystruk v. Infinity Insurance Co., No. B209404, a case now before the Second Appellate District after a trial court dismissal founded on Moradhi-Shalal v. Fireman’s Fund Insurance Co. (1988) 36 Cal 3rd 287, which held that there is no private cause of action by a purportedly [...]

June 4, 2009   Posted in: Blog  Comments Closed

Commissioner Proposes New Health Insurance Underwriting/Rescission Regulations

At the height of the California Supreme Court’s dominance by appointees of Governor Edmund G. “Pat” Brown in the late 1960′s and early 1970′s, the Court  issued opinions insisting on insurer underwriting investigations and insureds’ appreciation of the “significance” of their application answers as prerequisites to insurer rescissions on the basis of alleged misrepresentations.  See [...]

June 3, 2009   Posted in: Blog  Comments Closed

Commissioner Releases “Top Down” Review of Workers’ Compensation Insurance Rating Bureau

The Commissioner released today his special examiner’s “top down” review of the operations of the Workers’  Compensation Insurance Rating Bureau (WCIRB).  Among the recommendations are collection of detailed, transaction-level data for better analysis of the impacts of external events and trends, mandatory submission of aggregate financial call reports electronically, remedial action against insurer data submitted [...]

June 2, 2009   Posted in: Blog  Comments Closed

Commissioner To Hold HO and Fair Plan Hearings in Los Angeles and Santa Barbara

The Commissioner announced today that he will hold hearings in Los Angeles and Santa Barbara to discuss community concerns about the availability of private homeowners insurance and the Fair Plan.  The hearing for Sayre and Freeway Complex Fire survivors will take place on August 19 in Los Angeles.  The hearing for Tea Fire survivors will [...]

June 2, 2009   Posted in: Blog  Comments Closed

Commissioner Issues Annual Financial Reporting Regulations

On July 22, the Commissioner will hold a public hearing in Los Angeles to address proposed annual financial reporting regulations.  The proposed regulations aim at improving the Department’s financial surveillance capacity by requiring an annual audit of insurers’ financial statements reporting insurers’ financial position and operations, communications of control related matters noted in an audit, [...]

June 1, 2009   Posted in: Blog  Comments Closed