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Recently, in Mallek v. Allstate Indem. Co. No. 17-CV-5949-KAM-SJB, 2018 U.S. Dist. LEXIS 42171 (E.D.N.Y. Mar. 12, 2018), a federal magistrate in New York recommended that the Court deny a plaintiff’s motion to remand and suggested that removal was proper where the plaintiff “fraudulently” joined an insurance agent. Oftentimes, coverage actions involve a plaintiff suing a national insurance company, where neither are citizens of the same state, and therefore, the case may be eligible for removal under 28 U.S.C. § 1332. However, some plaintiffs have included local agents of the insurance company—like a claims professional who handled their claim—as named-defendants, along with the insurer, in an attempt to defeat complete diversity between a local plaintiff and a national insurance carrier.
Continue Reading Eastern District of New York Magistrate Recommends Denial of a Motion to Remand and Recognizes the Application of the Fraudulent Joinder Doctrine, Even in the Face of the “Forum Defendant Rule”

Recently, the Texas legislature acted to curb abusive lawsuits filed by insureds as a result of hailstorm and other property insurance claims.  According to the Executive Director of The Texas Coalition for Affordable Insurance Solutions (TCAIS), the sheer quantity of abusive lawsuits filed against insurers in Texas was affecting the “availability and affordability of homeowners insurance in [a] state where consumers suffer more loss from natural hazards on an ongoing basis than anywhere else in the country.”

In May of 2017, the Texas legislature voted to pass House Bill 1774, which provides a number of changes to the landscape for a broad range of property damage claims resulting from “forces of nature,” including “earthquake or earth tremor, a wildfire, a flood, a tornado, lightning, a hurricane, hail, wind, a snowstorm, or a rainstorm.”  The new law modifies Section 541.156(a) of the Texas Insurance Code (Settlement Offers), and adds a chapter (“Chapter 542A”) to Section 542.060 (Liability for Violation of Subchapter).  While the new law was not passed with Hurricane Harvey specifically in mind, the new law will undoubtedly be implicated in property damage claims arising from Hurricane Harvey and its aftermath, as it requires certain preconditions to filing a lawsuit against an insurer, and affects what types of damages an insured is entitled to recover.  A summary of some of the key changes imposed by Chapter 542A is provided below.
Continue Reading New Texas Insurance Code Chapter 542A, Effective September 1, 2017, May Reduce The Number of Harvey Lawsuits

The National Association of Insurance Commissioners’ (NAIC) Cybersecurity Task Force released a revised draft of the Insurance Data Security Model Law (Model Law) last week. The Model Law’s goal is to “establish exclusive standards… for data security and investigation and notification of a data breach” for “any person or entity licensed, authorized to operate, or registered” pursuant to state insurance laws. The first draft Model Law was released in April of this year and received over 40 comments from trade associations, market participants and regulators.

The first draft was started as a compilation of four previously released guidelines, with implementation of specific practices and penalties. The first draft incorporated elements of the Insurance Information and Privacy Protection Model Act and the Privacy of Consumer Financial and Health Information Regulation, and the Principles for Effective Cybersecurity: Insurance Regulatory Guidance and the NAIC Roadmap for Cybersecurity Consumer Protections. With the release of the first draft Model Law came many criticisms. NAIC members expressed concerns about:  (1) certain prescriptive security measures that insurance companies were expected to incorporate into their information security programs; (2) the requirement that insurance companies compel third-party service providers to agree by contract to certain data security provisions; (3) the timing, substance, and procedure for notifying consumers of a data breach; and (4) consumer remedies following a data breach, such as regulatory remedies and a private right of action.

Now, after reviewing the comments received in response to the first draft Model Law, the NAIC has released a revised draft after its NAIC National Summer Meeting, where the Task Force met with interested parties to discuss comments on this revised draft.  Written comments to the revised Model Law may be submitted by September 16, 2016.Continue Reading NAIC Releases Draft of Revised Insurance Data Security Model Law for Review

On November 4 and 5, a number of our Insurance and Reinsurance Practice Group members attended the 1st Annual Bad Faith Litigation Strategies ExecuSummit, which was held near New Haven, Connecticut. Deb Vennos and Greg Varga were panelists, and presented on the topic of Unfair Trade Practice Acts nationwide. The ExecuSummit was well-attended by…

Five members of Robinson & Cole’s Insurance Practice Group (Steve Goldman, Greg Varga, Kip Dwyer, John Malloy, and Ray DeMeo) attended the 83rd Spring Meeting & Educational Conference of the Loss Executives Association (LEA) in Boston, MA from June 11-13, 2014. The LEA is an organization dedicated to furthering the advancement and education of property…