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BT Policyholder Protection Blog
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13 Jul 2015 Texas Supreme Court to Decide Key Coverage Question on Policyholders’ Rights

In recognition of the opening of our Dallas, Texas, office, this week’s blog focuses on an important Texas Supreme Court decision anticipated by policyholders and insurers to define the manner in which policyholders may resolve disputes with claimants after an insurer wrongfully denies a defense and coverage.   Seger, et al. v. Yorkshire Ins. Co., Ltd. And Ocean Marine Ins. Co., Ltd. (Case No. 13-0673)  is currently pending before the Texas Supreme Court for decision.  Oral argument has been set for Sept. 15, 2015.  Amicus curiae briefs have been filed by the American Insurance Association, the Property Casualty Insurance Association of America, Lloyd’s America, Inc., the Texas Insurance Coverage League and the Texas Civil Justice League.  Both sides of this dispute have weighed in heavily on…

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27 Apr 2015 HOW DO HISTORICALLY LOW REINSURANCE RATES AFFECT HISTORICALLY LOW POLICYHOLDER SATISFACTION?

An article published on March 12, 2015, in the Risk Management Monitor reported on a recent worldwide policyholder survey demonstrating that insurance customer satisfaction with claims management is at an all-time low. At the same time, reinsurance rates are also being reported as the lowest in many years, contributing to the continuing “soft” market.  A “soft” market is typically good for policyholders who are buying or renewing insurance programs, so why the worldwide, pervasive dissatisfaction?   When reinsurance rates are low due to the historically high capacity in London, Bermuda and elsewhere, the cost of doing a primary and excess insurance business remains much lower than average. No major named hurricanes hit the U.S. in 2014. These factors contribute to the “softness” in the market…

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13 Feb 2015 Eleventh Circuit Decision Epitomizes the Differing Standards of Justice Received by Insureds in State Versus Federal Courts

The unpublished opinion of the Eleventh Circuit in Wellons Inc. v. Lexington Insurance Company 2014 WL 1978412 (11th Cir. 2014) is yet another federal court decision which ignores the insured’s substantive insurance rights under state law. The great divide between “State Court Justice” and “Federal Court Justice” continues to widen and thereby frustrates our constitutional system.   In Wellons, the Eleventh Circuit was asked to decide whether a series of prior, general reservation of rights letters by Lexington (AIG) preserved Lexington’s right to deny coverage after a lawsuit was filed and Lexington undertook the defense. The Wellons claim involved the construction of a dryer energy thermal oxidation system to produce heat for production of oriented strand board (OSB), customarily used in home construction and flooring….

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23 Jan 2015 “1-23-15 ALERT: VERMONT SUPREME COURT STRIKES DOWN AMBASSADOR IN LIQUIDATION’S 12/31/13 BAR DATE!

Today, the Vermont Supreme Court issues its opinion in the Ambassador in Liquidation case striking down the estate’s previously-published 12/31/13 bar date for final Proofs of Claim. The Ambassador Ins. Co. liquidation has been in process since 1987.  After the estate obtained over $300,000,000 in reinsurance and settlement proceeds from its former auditing firm, the estate essentially became “solvent”—paying Priority Four claims at 100 percent (plus interest). Seeking to bring the estate to a close, the liquidator set a final Proof of Claim date of 12/31/13 to require claimant-insureds to settle their underlying claims and submit them to the Ambassador estate. Many of the insureds have long-tail liabilities which are still developing and could not be resolved by the 2103 bar date. NICO, successor to…

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24 Nov 2014 SOFT INSURANCE MARKET

For those policyholders approaching year end renewals, bear in mind that the insurance, and importantly the reinsurance, markets remain soft. A lack of major 2014 hurricane activity and other catastrophic casualty losses have left the insurance market soft and driven down the internal costs of insurance (such as the cost of reinsurance premiums). Casualty insurers are posting major profits and are actively seeking new policyholder markets.   At renewal, policyholders should be presented with multiple, competitive options for casualty insurance by their brokers. Keep in mind that policyholders are in a strong position to negotiate terms and conditions of their insurance, including choice of their own defense counsel and scope of D&O coverage in particular. As the financial claims fallout from the recession has essentially…

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11 Jul 2014 Reliance Insurance Co. Liquidation Claims: Recent Offers To Convert Claims To Cash

  For corporate policyholders with Reliance Insurance Company insurance policies, recent developments have created opportunities to sell or reevaluate the financial value of claims against the policies. First, some background. Reliance Insurance Company was placed in liquidation on Oct. 3, 2001, by Order of the Commonwealth Court of Pennsylvania. The Reliance liquidation was, and still is, one of the largest insurance company liquidations in U.S. history. Reliance is paying its liabilities through a court-appointed Liquidator, namely, the Insurance Commissioner of Pennsylvania. Many insurance liquidations take decades to resolve (such as Ambassador, Midland, Home and others), and it is probable that Reliance will take at least 20 years to run-off all of its liabilities and pay the various classes of claimants until the assets are finally…

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13 May 2014 Jim Leonard presents “Converting Legacy Insurance Policies to Cash”

  Jim Leonard of Barnes & Thornburg‘s Atlanta office presented to the national ABA TIPS 22nd Annual Insurance Coverage Litigation Committee Midyear Program.  He spoke on the topic of “Converting Legacy Insurance Policies to Cash” along with Stanley Richards of Georgia-Pacific, who helped to address the complex issues associated with making insurance claims for long-tail liabilities.   Identifying and locating insurance policies dating back decades can be challenging; but insurance archaeology specialists are experienced with reconstructing a company’s legacy insurance program from related and often-overlooked secondary sources.  Converting those old policies to cash requires true “detective” work.  Companies with significant long-tail exposures such as asbestos, pollution, and environmental claims should evaluate their insurance coverage available through ancient policies issued to corporate predecessors in an effort to…

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