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Insurance


Overview

Our clients are active in every sector of the insurance industry, including life and financial lines, property and casualty, reinsurance, and title insurance. On their behalf, we handle complex litigation and class action defense, and offer corporate and regulatory guidance.

 
  • Life Insurance and Financial Lines
    We serve the needs of the life insurance industry in connection with life, annuity, pension, and credit insurance businesses. We have represented life insurance companies throughout the United States in national, “bet the company” class action and complex commercial litigation cases. Our attorneys are not just “litigators,” but experienced trial lawyers with the depth to efficiently and creatively defend against both traditional and new issues raised by plaintiffs’ lawyers under state and federal law. Our firm’s securities, tax, ERISA and state regulatory lawyers have established national reputations for development and counseling on all forms of life insurance and annuity products in the individual and qualified plan markets. We bring an integrated approach to servicing our life insurance clients by drawing on the collective experience of our business, regulatory, and litigation attorneys. Learn more about our life insurance and financial lines capabilities.
  • Property and Casualty

    Carlton Fields represents leading insurers in the U.S. and Pan-American, London and European, and world markets. Our services include coverage analysis and litigation; claims, underwriting, business practices litigation (including class actions); counseling on regulatory compliance and interacting with regulators; defending insureds in litigation; and representing insurers in mergers, acquisitions, and restructuring transactions. 

    We handle matters involving diverse businesses and coverages within the insurance industry, and insurance matters affecting a broad range of industries. That experience, together with our lawyers’ collective experiences working with and in industry law departments, give us a deep understanding of our clients’ priorities and needs. Our clients gain valuable advantages from our understanding when faced with complex disputes, negotiations, and working with regulators and legislators. Learn more about our property and casualty insurance capabilities.

  • Representation and Warranty Insurance
    Carlton Fields represents property and casualty insurers in a wide range of transactional matters, including mergers and acquisitions. As part of our comprehensive M&A practice, we have extensive experience with representation and warranty insurance (RWI), a tool increasingly used by both buyers and sellers to decrease their exposure in M&A transactions. Learn more about our representation and warranty insurance capabilities.
  • Reinsurance

    Our experience with many insurance and financial products also strengthens our ability to serve our clients in reinsurance dispute resolution, reinsurance transactions, reinsurance counseling, and regulatory matters.

    We provide property and casualty insurers with a broad range of services relating to their ceding of risks through reinsurance transactions. These services include representing ceding insurers in catastrophe bonds; negotiating and documenting reinsurance transactions; reviewing reinsurance contracts; advice and counsel on fronting arrangements; forming and counseling captive insurers; evaluating and arbitrating reinsurance claims; and representing reinsurers in insurer insolvency proceedings.

    Our lawyers are experienced in counseling both reinsurers and ceding companies as to their rights and obligations under reinsurance treaties and facultative reinsurance contracts. We have represented reinsurers and ceding companies in reinsurance arbitration proceedings involving both domestic and international insurers and reinsurers. Learn more about our reinsurance capabilities.

  • Financial Services Regulatory

    We advise and counsel insurers in the courtroom, regulatory arena, and legislature. Our experience covers all regulatory practice areas, including highly specialized fields such as design, registration and approval of new insurance products, ratemaking, market conduct, and solvency.

    We routinely assist insurance clients with corporate transactions, including formation or acquisition of insurance companies, insurance company mergers and acquisitions, corporate restructuring, portfolio transfers, sales or transfers due to insolvency proceedings, joint venture arrangements, sales of insurance agencies and brokerage firms, reinsurance arrangements, and separate account transfers, reorganizations, and deregistrations.

    We also advise insurance clients on regulatory financial matters concerning surplus notes, administration of deposits, and the status of insurer assets, liabilities, and investments under state insurance statutory accounting statutes. Learn more about our financial service regulatory capabilities.

  • Title Insurance

    We handle a wide range of matters for title insurers and their insureds. We have served as lead counsel in complex title matters in 17 states, and have handled claims for every major title insurer in Florida and Georgia. Our lawyers analyze, negotiate, and litigate complex coverage issues. We have represented underwriters in cutting-edge impact litigation, including Florida’s Butler premium rebate litigation a decade ago, and today’s reissue rate premium class actions in Florida, Pennsylvania, Ohio, New York, and Michigan.

    Our representation includes underwriters in major regulatory matters and market conduct examinations related to title agent defalcations, and in closing protection letter claims and litigation. We regularly represent title insurance companies on coverage questions, disputes between different title insurance companies, actions against title agents and their insurers, and title agent defalcations. Learn more about our title insurance capabilities.

  • Cyber Coverage and Disputes
    Carlton Fields’ coverage team has been at the forefront of counseling and litigating “cyber” coverage disputes for insurers since long before data breaches made news, or standalone “cyber” coverages were developed. Carlton Fields’ coverage lawyers have handled some of the most high-profile and high-dollar cyber coverage disputes. We have counseled insurers regarding coverage for data breaches, malware attacks, political hactivism, social engineering/phishing/spoofing schemes, and misappropriation of intellectual property. We have analyzed “cyber” coverage issues under traditional coverages, including CGL and fidelity policies (and particularly the “computer systems fraud” rider), as well as newer “cyber” specific package policies, that include first-party coverages, such as data restoration and replacement, business interruption, and breach response costs, as well as third-party liability coverages, including security and privacy liability, derivative vendor and contractual liability, and internet media liability.  Learn more about our cyber coverage and disputes capabilities.
     

All Insights

Reinsurance

Reinsurance

December 1, 2018

Second Circuit Finds Factual Issues Regarding Whether Limit of Liability in Reinsurance Agreements Include Loss Adjustment Expenses

Is It Time to Harvest the NAIC Suitability in Annuity Transactions Model Regulation?

Is It Time to Harvest the NAIC Suitability in Annuity Transactions Model Regulation?

November 26, 2018

At the NAIC Fall 2018 National Meeting, state regulators continued plowing through the Suitability in Annuity Transactions Model Regulation (Model 275) (Suitability Model).

SEC Proposes Summary Prospectus Option and Modernized Disclosure for Variable Insurance Products

SEC Proposes Summary Prospectus Option and Modernized Disclosure for Variable Insurance Products

October 31, 2018

On October 31, the SEC took the first step toward allowing variable annuities providers to streamline disclosure by issuing summary prospectuses similar to those used by mutual funds. This article discusses the SEC’s proposed summary prospectus option and modernized disclosure for variable insurance products.

Suitability Working Group Stirs Ingredients for Suitability Model Potion

Suitability Working Group Stirs Ingredients for Suitability Model Potion

October 25, 2018

On October 22 and 23, the NAIC Annuity Suitability (A) Working Group (Suitability WG) held an interim meeting to review comments received on the Suitability in Annuity Transactions Model Regulation (Model 275) (Suitability Model).

Florida Insurance Commissioner Issues Hurricane Michael Emergency Order

Florida Insurance Commissioner Issues Hurricane Michael Emergency Order

October 17, 2018

On October 15, 2018, Florida Insurance Commissioner David Altmaier issued an Emergency Order affecting insurers writing insurance in Bay, Calhoun, Franklin, Gadsden, Gulf, Hamilton, Holmes, Jackson, Jefferson, Leon, Liberty, Madison, Suwannee, Taylor, Wakulla, and Washington Counties (the “Counties”), which were impacted by Hurricane Michael.

As Students Return to School, Regulators Continue Their Study of the NAIC’s Suitability in Annuity Transaction Model Regulation

As Students Return to School, Regulators Continue Their Study of the NAIC’s Suitability in Annuity Transaction Model Regulation

October 1, 2018

At the 2018 NAIC Summer National Meeting, regulators continued their efforts to define the standard of care that applies to recommendations.

Court Invalidates California Unclaimed Property Law Regulations

Court Invalidates California Unclaimed Property Law Regulations

October 1, 2018

A California state court recently enjoined the state from enforcing two rules adopted by the Office of the State Controller without compliance with the California Administrative Procedure Act (APA) concerning the state’s Unclaimed Property Law (UPL).

Dodd-Frank Rollback Benefits Insurers

Dodd-Frank Rollback Benefits Insurers

October 1, 2018

The Economic Growth, Regulatory Relief, and Consumer Protection Act (Public Law 115-174 or the Act) was signed into law on May 24. The Act can benefit life insurance companies or their affiliates in a number of ways.

Even Disclaiming ‘Magic Words’ Won’t Save Plaintiffs from SLUSA Preclusion

Even Disclaiming ‘Magic Words’ Won’t Save Plaintiffs from SLUSA Preclusion

October 1, 2018

In 2016, a putative class action lawsuit was filed in California state court on behalf of all persons over the age of 60 who were issued a variable annuity policy by defendants within the state.

FINRA Targets Variable Annuity Practices

FINRA Targets Variable Annuity Practices

October 1, 2018

FINRA’s reported enforcement actions as to certain variable annuity practices increased in 2018.

In California, a New Era in U.S. Privacy

In California, a New Era in U.S. Privacy

October 1, 2018

In June, California passed a sweeping new privacy law that will impact an estimated 500,000 businesses in the United States.

Louisiana Appeals Court Affirms Class Certification in Lingering Litigation Against Department of Insurance

Louisiana Appeals Court Affirms Class Certification in Lingering Litigation Against Department of Insurance

October 1, 2018

A Louisiana appeals court recently affirmed class certification in consolidated lawsuits, pending since 1991, against Louisiana’s Department of Insurance, other related state entities, and the state’s excess insurance carriers.

NAIC Summer National Meeting Spotlights Innovation and Insurtech

NAIC Summer National Meeting Spotlights Innovation and Insurtech

October 1, 2018

In response to the accelerating pace of change, the NAIC’s Summer National Meeting in Boston focused on innovation and insurtech.

NIST Provides Guide and Example Solution for IT Asset Management

NIST Provides Guide and Example Solution for IT Asset Management

October 1, 2018

On September 7, the National Cybersecurity Center of Excellence (NCCoE) and the National Institute of Standards and Technology (NIST) published Special Publication 1800-5 – IT Asset Management Practice Guide (the Guide) to help financial services companies tackle challenges in managing both the hardware and software components of their information technology assets.

Protecting At-Risk Seniors from Financial Exploitation

Protecting At-Risk Seniors from Financial Exploitation

October 1, 2018

Financial exploitation of senior citizens and other vulnerable adults results in substantial losses each year. This article discusses two of the many recent legislative and regulatory actions targeting this abuse.

SEC ‘Investor Experience Initiative’ Expressly Includes Variable Insurance Products

SEC ‘Investor Experience Initiative’ Expressly Includes Variable Insurance Products

October 1, 2018

The SEC, on June 5, announced that it would be exploring “modernization of the design, delivery and content of fund disclosures” in order “to improve the investor experience and help investors make more informed investment decisions.”

SEC Proceedings Face Uncertainty After Supreme Court Holds ALJs Unconstitutional

SEC Proceedings Face Uncertainty After Supreme Court Holds ALJs Unconstitutional

October 1, 2018

After much anticipation, the U.S. Supreme Court ruled on the constitutionality of the Securities and Exchange Commission’s (SEC or Commission) Administrative Law Judges (ALJs). In Lucia v. SEC, Dkt. No. 17–130, the Supreme Court held that ALJs are “Officers of the United States” subject to the Appointments Clause of the U.S. Constitution, rather than mere federal employees.

SEC Proposes New Rule Impacting ETFs

SEC Proposes New Rule Impacting ETFs

October 1, 2018

On June 28, the SEC proposed new rule 6c-11 to allow open-end exchange-traded funds that satisfy certain conditions to operate without obtaining an SEC exemptive order.

SEC: Ether and Bitcoin Are Not Securities

SEC: Ether and Bitcoin Are Not Securities

October 1, 2018

Cryptocurrency investors were concerned following the SEC’s July 2017 investigative report on digital token sales by a virtual organization known as “The DAO.”

Second Circuit Affirms Summary Judgment for Bona Fide Purchaser in STOLI Action

Second Circuit Affirms Summary Judgment for Bona Fide Purchaser in STOLI Action

October 1, 2018

In a June 8, ruling in AEI Life v. Lincoln Benefit Life Co., the Second Circuit upheld the District Court for the Eastern District of New York’s application of New York’s two-year incontestability period to a STOLI policy.

XBRL Amendments Have Limited Impact on Insurance Products

XBRL Amendments Have Limited Impact on Insurance Products

October 1, 2018

On June 28, the SEC amended existing requirements for public operating companies and mutual funds regarding the use of eXtensible Business Reporting Language (XBRL) for financial statement information and risk/return summaries.

SEC Regulation Best Interest: Charting a Course for Securities and Annuity Sales

SEC Regulation Best Interest: Charting a Course for Securities and Annuity Sales

September 5, 2018

In June, we circulated our fifth article on the continuing saga regarding the standard of conduct for sales of securities and annuities — and the efforts of federal and state regulators to impose new conditions on the existing standards. Our earlier articles focused on the potential for regulatory and litigation issues arising under the Department of Labor’s fiduciary rule adopted in 2016, which was struck down by the Fifth Circuit Court of Appeals.

Guiding FEMA Through Groundbreaking CAT Bond Reinsurance Transaction

Guiding FEMA Through Groundbreaking CAT Bond Reinsurance Transaction

August 15, 2018

The bond is a first-of-its-kind for the federal government; it is the first flood-only CAT bond and the only CAT bond issued on behalf of the NFIP.

New York Federal Court Awards Damages for Reinsurance Payments in Lawsuit Against Iran Related to Se

New York Federal Court Awards Damages for Reinsurance Payments in Lawsuit Against Iran Related to Se

August 6, 2018

The Southern District of New York recently granted a motion for damages by insurance plaintiffs in a multidistrict litigation case against Iran stemming from the September 11, 2001 terrorist attacks.

Professional Services Exclusion Precludes Coverage for False Claims Act Suit

Professional Services Exclusion Precludes Coverage for False Claims Act Suit

August 3, 2018

It is not unusual for a directors and officers liability policy to have an exclusion for professional services. A such, a question often arises regarding whether the claimed wrongful conduct involved the rendering or failure to render professional services in a particular context.

Rhode Island Amends Laws to Permit Voluntary Restructuring of Insurers Using Protected Cells with Co

Rhode Island Amends Laws to Permit Voluntary Restructuring of Insurers Using Protected Cells with Co

August 2, 2018

Rhode Island has amended its laws related to voluntary restructuring of insurers and protected cell companies to allow for domestic insurance companies to enter into a voluntary restructuring, including the use of a protected cell, with the approval of the commissioner.

Eleventh Circuit Reverses NLRB Order, Enforcing Individualized Arbitration Clause in Employee Agreem

Eleventh Circuit Reverses NLRB Order, Enforcing Individualized Arbitration Clause in Employee Agreem

August 1, 2018

A pizza delivery driver employed by Domino’s Pizza franchisee Cowabunga Inc. filed a collective action under the Fair Labor Standards Act with the National Labor Relations Board.

Court Orders Compliance with Arbitral Subpoenas, Deferring to the Panel’s Assessment of the Value of

Court Orders Compliance with Arbitral Subpoenas, Deferring to the Panel’s Assessment of the Value of

July 31, 2018

In a case that had been filed and then stayed in a New York federal district court in connection with an ongoing arbitration involving alleged violations of federal securities laws, the plaintiffs filed a motion to enforce two subpoenas issued by the arbitrators.

Two Federal Appellate Courts Decline to Find “Evident Partiality” Due to Trivial Omissions in Arbitr

Two Federal Appellate Courts Decline to Find “Evident Partiality” Due to Trivial Omissions in Arbitr

July 30, 2018

In two separate appellate decisions, two circuit courts of appeal declined to overturn orders enforcing arbitration awards where the appellants had challenged the respective awards based on “evident partiality” under the FAA.

An Absolute Pollution Exclusion: Reading the ‘Fine’ Print

An Absolute Pollution Exclusion: Reading the ‘Fine’ Print

July 27, 2018

A federal judge recently relied on a pollution exclusion to find that Great American Insurance Company was not obligated to cover losses associated with the unintended distribution of rock fines into New Jersey’s Spruce Run reservoir.

Although Largely Deflated, IUL Illustration Statute Lawsuit Rolls On

Although Largely Deflated, IUL Illustration Statute Lawsuit Rolls On

July 27, 2018

Almost a year ago, the U.S. Court of Appeals for the Ninth Circuit ruled that an alleged violation of California’s illustration statutes could serve as a predicate for liability under the California Unfair Competition Law.

In the Duty of Care Race, the NAIC Is in the Chase with New Proposed Revisions to Its Annuity Suitability Model

In the Duty of Care Race, the NAIC Is in the Chase with New Proposed Revisions to Its Annuity Suitability Model

July 27, 2018

On July 24, in preparation for its August 4 meeting at the NAIC 2018 Summer National Meeting, the Annuity Suitability (A) Working Group released a working draft of proposed revisions to the Suitability in Annuity Transactions Model Regulation (#275). This alert discusses the significant proposed changes, comments, and suggestions for discussion at the Summer National Meeting.

The Docket: Indiana Court Addresses Insured's Negligent Misrepresentation Claim

The Docket: Indiana Court Addresses Insured's Negligent Misrepresentation Claim

July 26, 2018

Chris Smart provides a review of a ruling by an Indiana appellate court, which upheld a trial court’s decision in favor of an underwriter accused of negligent misrepresentation and bad faith.

U.S. Tax Court Finds Captive Insurer Is Not an “Insurance Company” Under the Internal Revenue Code

U.S. Tax Court Finds Captive Insurer Is Not an “Insurance Company” Under the Internal Revenue Code

July 26, 2018

The U.S. Tax Court held that Reserve failed to qualify as an insurance company for federal income tax purposes under the Internal Revenue Code section 501 (a), (c)(15), which provides for the tax-exempt treatment of income received by insurance companies that meet certain criteria.

California Federal Court Finds Defendant Did Not Wave Right to Arbitrate Despite Delay in Initiating

California Federal Court Finds Defendant Did Not Wave Right to Arbitrate Despite Delay in Initiating

July 25, 2018

Plaintiff argued that Defendant’s basis for removal was not applicable because Defendants waived their right to arbitration or because the case is not related to the agreement containing an arbitration provision.

First Circuit Holds Online Mandatory Arbitration Agreement is Unenforceable

First Circuit Holds Online Mandatory Arbitration Agreement is Unenforceable

July 24, 2018

The First Circuit recently held that an arbitration clause contained in the online contract of the ride sharing app, Uber Technologies, Inc., is unenforceable under Massachusetts law.

New York Federal Court Finds Section 1782 Petition Can Reach Documents Abroad

New York Federal Court Finds Section 1782 Petition Can Reach Documents Abroad

July 23, 2018

In a petition brought under 28 U.S.C § 1782, petitioner sought discovery of documents outside the United States.

New Opinions From Second and Sixth Circuit Courts Rock Phishing Loss Coverage Landscape

New Opinions From Second and Sixth Circuit Courts Rock Phishing Loss Coverage Landscape

July 16, 2018

On July 6, the Second Circuit Court of Appeals set off some fireworks in the insurance coverage litigation field when it found coverage for a “social engineering”/phishing scheme loss, bucking the trend among its sister courts.

COI Litigation Update

COI Litigation Update

June 25, 2018

Life insurers that defend challenges to their exercises of discretion to adjust cost of insurance (COI) rates on universal life insurance policies continue to seek opportunities to narrow the scope of the claims through early dispositive motions.

FINRA Moves Toward SEC Anti-Churning Proposal

FINRA Moves Toward SEC Anti-Churning Proposal

June 25, 2018

On April 18, the SEC voted to propose major rule changes to reconcile and clarify the standards of conduct that apply to broker-dealers and investment advisers.

FINRA Proposes to Ease Regulation of Outside Business Activities

FINRA Proposes to Ease Regulation of Outside Business Activities

June 25, 2018

FINRA has proposed a major paradigm shift for regulating outside business activities (OBAs) and private securities transactions (PSTs) of broker-dealer personnel.

New York Pushes Mutual Fund Active Share Disclosure

New York Pushes Mutual Fund Active Share Disclosure

June 25, 2018

New York’s Attorney General issued a report on its recent investigation of fees charged by actively managed equity mutual funds and a metric known as "Active Share."

Ninth Circuit: Face Amount Controls Amount-in-Controversy Questions Where Policy’s Validity is Disputed

Ninth Circuit: Face Amount Controls Amount-in-Controversy Questions Where Policy’s Validity is Disputed

June 25, 2018

In March, the Ninth Circuit provided clarity on a key and recurring issue relevant to a district court’s ability to exercise subject matter jurisdiction in actions involving the validity of life insurance policies.

Recalls of Loaned Securities by Insurance Dedicated Funds

Recalls of Loaned Securities by Insurance Dedicated Funds

June 25, 2018

In March, the SEC sanctioned the investment advisers of two funds supporting variable insurance contracts for inadequate disclosure about the funds’ recalls of loaned portfolio securities in advance of the securities’ dividend record dates.

SEC Warns About Third-Party Destruction of Broker-Dealer Records

SEC Warns About Third-Party Destruction of Broker-Dealer Records

June 25, 2018

The SEC staff issued an April 12 letter addressing broker-dealer contracts with third-party recordkeeping service providers under which the service provider can delete or discard records of a broker-dealer who fails to pay fees due under the recordkeeping agreement, among other scenarios.

Supreme Court Set to Rule on Constitutionality of SEC’s ALJs

Supreme Court Set to Rule on Constitutionality of SEC’s ALJs

June 25, 2018

In April, the U.S. Supreme Court heard oral argument in Lucia v. SEC to resolve the federal circuit court split on whether the SEC’s administrative law judges (ALJs) are "inferior officers" of the United States who must be appointed in accordance with the Appointments Clause of the U.S. Constitution, and not mere employees whose hiring is not required to meet constitutional standards.

To Preempt or Not to Preempt - Courts Issue Competing SLUSA Rulings

To Preempt or Not to Preempt - Courts Issue Competing SLUSA Rulings

June 25, 2018

During two weeks in April, two different courts — the Second Circuit and the New Jersey Superior Court — considered nearly identical allegations regarding variable products and reached diametrically opposed conclusions about the extent to which the claims were barred by the Securities Litigation Uniform Standard Act (SLUSA).

Unclaimed Life Insurance Benefits: The First Half of 2018 in Review

Unclaimed Life Insurance Benefits: The First Half of 2018 in Review

June 25, 2018

The pace of developments in the unclaimed life insurance benefits space remained active in the first six months of 2018, with new judicial decisions and state legislative enactments making an impact.

Which Thoroughbred Will Win the Standards of Care Derby?

Which Thoroughbred Will Win the Standards of Care Derby?

June 25, 2018

The NAIC and the State of New York continue racing as each is revising its suitability regulation to incorporate enhanced standards of care. Only time will tell which version will gallop to victory.

Win for MassMutual in Rare Class Action Trial

Win for MassMutual in Rare Class Action Trial

June 25, 2018

A California jury recently returned a verdict in favor of MassMutual following a 12-day trial in a state-court class action that claimed the insurer failed to pay dividends owed to policy owners.

Expect Slower SEC Processing of Investment Company Filings

Expect Slower SEC Processing of Investment Company Filings

June 24, 2018

The SEC has reported to Congress that it expects the Division of Investment Management (IM) to provide comments at a slower pace during the 2018 and 2019 fiscal years.

South Carolina First State to Adopt NAIC Insurance Data Security Model Law

South Carolina First State to Adopt NAIC Insurance Data Security Model Law

June 24, 2018

On May 3, Governor Henry McMaster signed the South Carolina Insurance Data Security Act, making South Carolina the first state to adopt the NAIC Insurance Data Security Model Law.

SEC Regulation Best Interest: Charting a Course for Securities and Annuity Sales, Avoiding Collision and Potential Regulatory and Litigation Issues

SEC Regulation Best Interest: Charting a Course for Securities and Annuity Sales, Avoiding Collision and Potential Regulatory and Litigation Issues

June 12, 2018

During the past two years, we have written about potential litigation arising under the Department of Labor’s, first proposed, then adopted fiduciary rule. This article is the first of several we will write on the potential impact of these events on the recommendation and sale of securities generally, with particular emphasis on insurance company annuities.

Several Teams Compete to Reach NAIC Suitability Model Finals

Several Teams Compete to Reach NAIC Suitability Model Finals

June 5, 2018

Several teams competed over proposed revisions to the Suitability in Annuity Transactions Model Regulation (#275) at the in-person meeting of the NAIC Annuity Suitability Working Group.

Client Alert: Eleventh Circuit Affirms No Coverage Under Computer Fraud Provision of Insurance Policy

Client Alert: Eleventh Circuit Affirms No Coverage Under Computer Fraud Provision of Insurance Policy

May 10, 2018

Both insurers and insureds alike must recognize the need to laser focus on the precise terms employed in these policies to determine the scope of coverage.

Almost There!  South Carolina on Course to Become First State to Adopt NAIC Insurance Data Security Model Law

Almost There! South Carolina on Course to Become First State to Adopt NAIC Insurance Data Security Model Law

May 2, 2018

South Carolina’s law is substantially similar to the NAIC Model, and would take effect January 1, 2019.

THE NAIC Moves to Facilitate the Implementation Of Portions of the Covered Agreement

THE NAIC Moves to Facilitate the Implementation Of Portions of the Covered Agreement

May 1, 2018

The NAIC has started to take steps to facilitate the implementation of the reinsurance collateral provisions of the Covered Agreement entered into by the United States and European Union.

Changes to New York Insurance Regulation 187: Are They April Showers Bringing May Flowers, or Are June Bugs on the Way?

Changes to New York Insurance Regulation 187: Are They April Showers Bringing May Flowers, or Are June Bugs on the Way?

April 30, 2018

If issued, the updated proposed first amendment will take effect on March 1, 2019.

9th Circ. Assesses Insurance For Social Engineering Scams

9th Circ. Assesses Insurance For Social Engineering Scams

April 27, 2018

Every company in the market for insurance coverage should inquire specifically about coverage for social engineering schemes.

Reinsurance / Follow-the-Fortunes

Reinsurance / Follow-the-Fortunes

April 20, 2018

Court denies reinsurer's post-trial motions, holding that the jury had sufficient evidence to conclude that a reinsurer breached a reinsurance agreement, and that the claims of the reinsured were not barred by a late notice defense.

SEC Proposes New Standards of Conduct for Broker-Dealers and Investment Advisers

SEC Proposes New Standards of Conduct for Broker-Dealers and Investment Advisers

April 19, 2018

On April 18, the SEC voted four to one to propose new standards of conduct for broker-dealers (BDs) and investment advisers (IAs).

New York Trial Court Finds Lexington Has No Duty to Provide Coverage for Damages Stemming from an Insured’s Knowing and Intentional Conduct

New York Trial Court Finds Lexington Has No Duty to Provide Coverage for Damages Stemming from an Insured’s Knowing and Intentional Conduct

April 13, 2018

The Supreme Court of the State of New York, Suffolk County, recently granted summary judgment to Carlton Fields’ client, Lexington Insurance Company, in a suit brought by its insured seeking coverage for damages stemming from the insured’s breach of a lease agreement with a third-party.

Notice of a Claim Pursuant to Florida’s Pre-Suit Notice of Construction Defect Statute, Chapter 558, May Trigger an Insurer’s Duty to Defend

Notice of a Claim Pursuant to Florida’s Pre-Suit Notice of Construction Defect Statute, Chapter 558, May Trigger an Insurer’s Duty to Defend

April 9, 2018

Commercial general liability (CGL) insurance policies are necessary for construction projects of all types. Contractors and insurers often have different views on what exactly triggers an insurer’s duty to defend.

An Illustration Saga Continues in California

An Illustration Saga Continues in California

March 31, 2018

As we previously reported, the Ninth Circuit in March 2017 held that violation of California’s illustration statutes could serve as a predicate for an Unfair Competition Law (UCL) action, partially reversing the trial court’s decision in Walker v. Life Ins. Co. of the Southwest on the plaintiff’s UCL claims following a jury verdict for the insurer.

Another Bout in the NAIC Best Interest Standard Title Fight

Another Bout in the NAIC Best Interest Standard Title Fight

March 31, 2018

In response to the National Association of Insurance Commissioners’ (NAIC) Annuity Suitability Working Group’s (Suitability WG) proposed revisions to the "Suitability and Best Interest Standard of Conduct in Annuity Transactions Model Regulation" (Model), 23 comment letters were submitted by regulators, consumer groups, industry groups, and companies (the Contenders).

CAFA’s Local Controversy Exception Requires Class Claims Against Local Defendant

CAFA’s Local Controversy Exception Requires Class Claims Against Local Defendant

March 31, 2018

As we previously reported, in September 2017, a federal district court in Louisiana dismissed with prejudice as time-barred putative class action RICO and state racketeering claims related to alleged wrongful conduct by an agent in connection with annuities issued by Sun Life.

Court Rejects Insurer’s Spokeo-Based  Standing Challenge to TCPA Action

Court Rejects Insurer’s Spokeo-Based Standing Challenge to TCPA Action

March 31, 2018

In a February 20 ruling, the Northern District of Illinois cleared the way for a plumbing company’s putative class action against Allstate Insurance Company and an insurance agency co-defendant by denying the defendants’ motions to dismiss, which were inspired by recent U.S. Supreme Court decisions, including Spokeo v. Robins in 2016.

Enforcement of DOL’s New Best Interest Contract Exemption’s Anti-Arbitration Condition is Enjoined

Enforcement of DOL’s New Best Interest Contract Exemption’s Anti-Arbitration Condition is Enjoined

March 31, 2018

A number of lawsuits have been brought challenging aspects of the United States Department of Labor’s "fiduciary rule," which expanded the definition of "fiduciary" of an employee benefit plan or individual retirement account as a result of giving investment advice for compensation to retirement investors.

Fifth Circuit Vacates DOL Fiduciary Rule

Fifth Circuit Vacates DOL Fiduciary Rule

March 31, 2018

On March 15, the Fifth Circuit, in Chamber of Commerce, et. al. v. United States Department of Labor, a 46-page opinion, reversed the district court’s ruling upholding the Department of Labor (DOL) fiduciary rule and vacated the rule.

FINRA Requires Order Taker Registration

FINRA Requires Order Taker Registration

March 31, 2018

In late 2017, FINRA pronounced in Regulatory Notice 17-30 that, "Beginning on October 1, 2018, unregistered persons cannot accept an order from a customer under any circumstances.

Illinois Federal Court Rejects Twin Suits Challenging Dividend Payment Practices

Illinois Federal Court Rejects Twin Suits Challenging Dividend Payment Practices

March 31, 2018

Challenges to mutual life insurers’ discretion in setting dividend scales date back over 100 years. Earlier this year, in Anderson v. Country Life Insurance Company and Ochoa v. State Farm Life Insurance Company, a federal court in Illinois dismissed twin putative class action lawsuits filed against a pair of insurers.

Implementation Delay and Q&As for Fund Liquidity Rule

Implementation Delay and Q&As for Fund Liquidity Rule

March 31, 2018

On February 21, the SEC approved a six-month extension for mutual funds to comply with the classification (bucketing) requirements and related elements of its new liquidity rule.

Insurers Keep Providing Corporate Governance Disclosures Without Complaint—Yet

Insurers Keep Providing Corporate Governance Disclosures Without Complaint—Yet

March 31, 2018

Following the financial crisis, the NAIC undertook a solvency modernization initiative (SMI) to update insurance regulators on insurance companies’ regulatory frameworks.

Investment Adviser Fee Table on the Table

Investment Adviser Fee Table on the Table

March 31, 2018

On February 7, the Massachusetts Securities Division asked for public comment on a fee table requirement for Massachusetts-registered investment advisers.

NAIC Disclosure Developments

NAIC Disclosure Developments

March 31, 2018

Annuity Illustration Standard Changes: On March 2, the Annuity Disclosure (A) Working Group of the National Association of Insurance Commissioners agreed to recommend the adoption of a revision to the NAIC’s Annuity Disclosure Model Regulation illustration standards.

Nonpayment of an Insurance Claim is Not Elder Abuse

Nonpayment of an Insurance Claim is Not Elder Abuse

March 31, 2018

Does the failure to pay an insurance claim constitute elder abuse?

Plaintiffs’ Notice That the ‘Taxman Cometh’ Was Sufficient to Trigger Statute of Limitations

Plaintiffs’ Notice That the ‘Taxman Cometh’ Was Sufficient to Trigger Statute of Limitations

March 31, 2018

In a November 16, 2017 ruling, a California appellate court affirmed a summary judgment ruling in favor of several financial advisors, and insurer American General Life Insurance Company, holding that plaintiffs’ fraud and negligence based claims relating to alleged faulty financial planning advice were time-barred.

SDNY Ruling Narrows Claims in COI Suit

SDNY Ruling Narrows Claims in COI Suit

March 31, 2018

In EFG Bank AG, Cayman Branch v. AXA and The Duffy 2004 LLC v. AXA, in a February 14 ruling, AXA Equitable Life Insurance Company earned a sweet victory on its motion for partial dismissal of the complaints in two consolidated proceedings actions challenging its COI rate increases.

SEC Issues Cybersecurity Disclosure Guidance

SEC Issues Cybersecurity Disclosure Guidance

March 31, 2018

On February 21, the SEC published interpretive "Guidance" to help public operating companies prepare disclosures about cybersecurity risks and incidents.

SEC Sidelines Funds Focused on Cryptocurrencies

SEC Sidelines Funds Focused on Cryptocurrencies

March 31, 2018

In a January 18 letter to two of the fund industry’s leading advocacy groups, the staff of the SEC’s Division of Investment Management advised fund sponsors not to initiate registration of funds that intend to invest substantially in cryptocurrency and related products until the staff’s questions, which the letter identified, are satisfactorily addressed.

State Suitability, Fiduciary Duty and Disclosure Initiatives Roundup

State Suitability, Fiduciary Duty and Disclosure Initiatives Roundup

March 31, 2018

States are stampeding to impose additional duties on those who provide financial advice or make recommendations to consumers.

Supreme Court Denies Insurer’s Petition to Review Standing in Data Breach Class Actions

Supreme Court Denies Insurer’s Petition to Review Standing in Data Breach Class Actions

March 31, 2018

In recent years, the insurance and financial services industries have been targets of high profile data breaches.

When Innovation Meets Regulation: InsurTech and State Licensing Laws

When Innovation Meets Regulation: InsurTech and State Licensing Laws

March 31, 2018

The rise of InsurTech — which brings technological innovations to the business of insurance — is having a significant impact on the insurance industry, including through advancements in cybersecurity tools, the introduction of blockchain, and the use of big data for underwriting and claims.

SEC Targets Variable Insurance Products

SEC Targets Variable Insurance Products

March 30, 2018

Once again, the SEC’s Office of Compliance Inspections and Examinations (OCIE) has made variable insurance products an exam priority.

AIG Won’t Have to Defend Carfax in $50 Million Antitrust Suit

AIG Won’t Have to Defend Carfax in $50 Million Antitrust Suit

March 5, 2018

On March 1, a New York appeals court ruled that American International Group, Inc. (AIG) need not defend Carfax, Inc. against a $50 million suit alleging the company monopolized the vehicle history report market.

Florida Supreme Court Answers Certified Question in Altman v. Crum

Florida Supreme Court Answers Certified Question in Altman v. Crum

March 1, 2018

Is the notice-and-repair process set forth in Chapter 558, Florida Statutes, a “suit” within the meaning of the CGL policies issued by Crum & Forster to Altman Contractors?

Limit of Liability Provisions in Facultative Reinsurance Certificates Are Interpreted under New York Law Using the Standard Rules of Contract Interpretation

Limit of Liability Provisions in Facultative Reinsurance Certificates Are Interpreted under New York Law Using the Standard Rules of Contract Interpretation

February 2, 2018

The question sometimes arises as to whether the limit of a reinsurance contract limits the payment by the reinsurer of both indemnity and expenses, or just indemnity payments, with payment for expenses being outside and in addition to the stated limit of the reinsurance contract.

In California, Proposed Legislation to Increase Insureds’ Recoveries from Their Insurance Policies

In California, Proposed Legislation to Increase Insureds’ Recoveries from Their Insurance Policies

January 18, 2018

After devastating wildfires, California legislators proposed greater wildfire insurance protection, drafting a set of bills.

A Game Plan for Employers Facing Possible ACA Penalties

A Game Plan for Employers Facing Possible ACA Penalties

January 17, 2018

All employers are at risk of receiving a notice from the IRS that they are liable for a penalty under the Affordable Care Act for failing to offer enough employees insurance coverage, or for failing to offer particular employees insurance coverage. This alert offers a game plan to implement upon receipt of that notice.

New York Department of Financial Services Rings in the New Year with New Suitability Requirements for Insurance Companies

New York Department of Financial Services Rings in the New Year with New Suitability Requirements for Insurance Companies

January 1, 2018

New York’s Department of Financial Services (NY DFS) decided to bid farewell to 2017 and ring-in the new year by proposing to amend Suitability in Annuity Transactions, 11 NYCR 224 (the Annuity Suitability Rule).

Recent Developments in Property Insurance Coverage Litigation

Recent Developments in Property Insurance Coverage Litigation

January 1, 2018

Issues addressed in this white paper is relevant to hurricane claims and litigation, including causation, anti-concurrent causation language in exclusions, mold coverage, time element coverages, and the scope of appraisal.

Based on Principles of Fairness, Court Dismisses Putative Class Action RICO Claims Asserted Years After Initiation of Suit

Based on Principles of Fairness, Court Dismisses Putative Class Action RICO Claims Asserted Years After Initiation of Suit

December 29, 2017

In Robertson v. SunLife Financial, a federal district court in Louisiana dismissed with prejudice as time-barred an amended putative class action complaint alleging RICO and state racketeering claims related to alleged wrongful conduct by an agent related to annuities issued by SunLife.

COI Litigation Review – Early Dismissals Remain Elusive in Rate Increase Actions

COI Litigation Review – Early Dismissals Remain Elusive in Rate Increase Actions

December 29, 2017

Suits challenging insurers’ cost of insurance (COI) rate increases continue to generate much activity. In recent months, this activity has included transfers, consolidations, several actions that are inching closer to trial-readiness, and even a plaintiff’s jury verdict in an individual action.

Delicate FINRA Balancing Act: To Self-Report or Not?

Delicate FINRA Balancing Act: To Self-Report or Not?

December 29, 2017

FINRA Rule 4530(a) requires member firms to promptly report certain enumerated events. Rule 4530(b) is less specific, with supplemental guidance advising that a firm should report when it concludes or reasonably should have concluded that conduct or events will result in "widespread or potential widespread impact to the member,

Denial of Reinstatement of Lapsed Life Insurance Policy Affirmed Due to Failure to Satisfy Required Underwriting Standard

Denial of Reinstatement of Lapsed Life Insurance Policy Affirmed Due to Failure to Satisfy Required Underwriting Standard

December 29, 2017

In European Pensions Management Limited v. Columbus Life Insurance Co., a pension benefit plan that had purchased a life insurance policy on the secondary market and then permitted it to lapse for non-payment of premiums sued the insurer Columbus Life, alleging breach of contract and bad faith.

Did Santa Give the Insurance Industry a Lump of Coal or a Diamond in the Rough?

Did Santa Give the Insurance Industry a Lump of Coal or a Diamond in the Rough?

December 29, 2017

The Proposed Suitability and Best Interest Standard of Conduct in Annuity Transactions Model Regulation

Major Disruption in the Use of Technology and Trademarks in the Insurance Industry

Major Disruption in the Use of Technology and Trademarks in the Insurance Industry

December 29, 2017

A major study recently emerged regarding insurance industry brands.

Preparing for New York Regulation 210’s Effective Date

Preparing for New York Regulation 210’s Effective Date

December 29, 2017

The Preamble to New York’s Regulation 210 (the "Regulation") contains a March 19, 2018 effective date.

Regulators Continue to Scrutinize Initial Coin Offerings

Regulators Continue to Scrutinize Initial Coin Offerings

December 29, 2017

As reported in the most recent issue of Expect Focus, the SEC issued an investigative report in July cautioning market participants that distributed ledger (blockchain) technology-based offers and sales of digital "tokens" or "coins" in a so-called initial coin offering (ICO) may be subject to federal securities laws, depending on the circumstances.

SEC Committee Advocates for Summary Mutual Fund Shareholder Reports

SEC Committee Advocates for Summary Mutual Fund Shareholder Reports

December 29, 2017

On December 7, the Investor Advisory Committee of the Securities and Exchange Commission (SEC) adopted a recommendation that the SEC seriously explore the development of a summary disclosure document for mutual fund companies to use to satisfy their shareholder report delivery requirements.

SEC Exam Staff: “Surprise, We’re Back”

SEC Exam Staff: “Surprise, We’re Back”

December 29, 2017

In August, Kevin Kelcourse, the associate director for examinations at the SEC’s Boston Regional Office, confirmed that his office has been making "surprise" examination visits to registered advisers in the region.

SEC Whistleblower Awards to Insurance Department Employees?

SEC Whistleblower Awards to Insurance Department Employees?

December 29, 2017

Many federal, state, and local governmental employees may be eligible for awards pursuant to the SEC’s whistleblower program under the Dodd-Frank Act.

The Continuing Representation Doctrine Does Not Apply to Fraud Allegations

The Continuing Representation Doctrine Does Not Apply to Fraud Allegations

December 29, 2017

In Messmer v. KDK Fin. Serv. Inc., an individual action involving alleged fraud in connection with the sale and surrender of deferred annuities to a senior, the Indiana Court of Appeals refused to extend the doctrine of continuous representation to cases involving fraud and brokers of financial services.

The Ghosts of Christmas Past, Present, and Future Haunt Insurers’ Use of Big Data and Algorithmic Tools

The Ghosts of Christmas Past, Present, and Future Haunt Insurers’ Use of Big Data and Algorithmic Tools

December 29, 2017

Watching as legislators, regulators, and policymakers’ consider what changes, if any, are necessary for insurers’ use of big data and algorithmic tools, is like being visited by the Ghosts of Christmas Past, Present, and Future.

The Impact of the EU Requirement to ‘Unbundle’ Research Costs

The Impact of the EU Requirement to ‘Unbundle’ Research Costs

December 29, 2017

A recent European Union (EU) directive prohibits certain investment managers from receiving securities research whose cost is "bundled" together with broker-dealers’ costs of effecting securities transactions directed by the investment managers.

The NAIC Says Aloha

The NAIC Says Aloha

December 29, 2017

The National Association of Insurance Commissioners held its Fall National Meeting December 2-4 in Hawaii, saying aloha to 2017 and aloha to 2018.

Third Time Is the Charm: Class Certified in DMF-Related Shareholder Suit

Third Time Is the Charm: Class Certified in DMF-Related Shareholder Suit

December 29, 2017

In City of Westland Police & Fire Retirement System v. MetLife, the plaintiffs allege that the insurer overstated its earnings because it did not hold sufficient reserves for death benefit claims on group life insurance policies that were incurred but not reported.

When Innovation Meets Regulation

When Innovation Meets Regulation

December 29, 2017

The rise of InsurTech — which brings technological innovations to the business of insurance — has recently had a significant impact on the insurance industry, including through advancements in cybersecurity tools, the introduction of blockchain, and the use of big data for underwriting and claims.

Treasury Department Urges SEC to Act on Life Company Products

Treasury Department Urges SEC to Act on Life Company Products

December 28, 2017

The U.S. Department of the Treasury published an October 2017 report, "A Financial System That Creates Economic Opportunities — Asset Management and Insurance" in response to President Trump’s Executive Order 13772 on "Core Principles for Regulating the United States Financial System."

The DOL Fiduciary Rule: Charting a Course, Avoiding Collisions & Potential Litigation Q&A #4

The DOL Fiduciary Rule: Charting a Course, Avoiding Collisions & Potential Litigation Q&A #4

December 4, 2017

This article continues the discussion of potential litigation issues under the “revised temporary” DOL Rule involving the offer and sale of annuities in the IRA market.

The DOL Fiduciary Rule: Charting a Course, Avoiding Collisions & Potential Litigation Q&A #3

The DOL Fiduciary Rule: Charting a Course, Avoiding Collisions & Potential Litigation Q&A #3

October 1, 2017

Potential litigation issues under the "revised temporary" DOL Rule involving the offer and sale of annuities in the IRA market, including class action exposure and ERISA distributions.

A Ticking Clock: New York’s Pending Non-Guaranteed Elements Rule for Life Insurance and Annuity Products

A Ticking Clock: New York’s Pending Non-Guaranteed Elements Rule for Life Insurance and Annuity Products

September 26, 2017

The clock is ticking on the New York Department of Financial Services’ issuance of new Regulation 210 "Life Insurance and Annuity Non-Guaranteed Elements" (the Rule).

Certified Financial Planner Board Proposes Fiduciary Obligations for All CFP Financial Advice

Certified Financial Planner Board Proposes Fiduciary Obligations for All CFP Financial Advice

September 26, 2017

In June, the Certified Financial Planner (CFP) Board released proposed revisions to its standards of professional conduct that would require CFPs to adhere to a fiduciary standard at all times when providing any "financial advice" to a client.

Communications With Auditors and Audit Committees May Change

Communications With Auditors and Audit Committees May Change

September 26, 2017

The SEC has proposed for comment major revisions in the disclosures auditors are required to make in their reports on financial statements audited pursuant to Public Company Accounting Oversight Board (PCAOB) standards.

Dismissal of Individual Claims Cap Insurer’s Winning Streak in Action Challenging FIA Product Features

Dismissal of Individual Claims Cap Insurer’s Winning Streak in Action Challenging FIA Product Features

September 26, 2017

In May, the Southern District of California handed ING a win in a case involving allegations that the company targeted seniors with annuities that hid an embedded derivative structure that made them worth less than promised.

Eleventh Circuit Affirms Summary Judgment or Insurer in STOLI Case

Eleventh Circuit Affirms Summary Judgment or Insurer in STOLI Case

September 26, 2017

In Sun Life Assur. Co. of Canada v. U.S. Bank Nat. Ass’n, the Eleventh Circuit recently clarified that where a life insurance policy lacks an insurable interest at its inception and is thus void ab initio, prejudgment interest accrues from the date of payment.

NAIC Big Data Working Group Update

NAIC Big Data Working Group Update

September 26, 2017

Regulators are hard at work considering insurers’ use of big data and analytics. The Big Data (Ex) Working Group, chaired by Oregon Commissioner Laura Cali Robison, adopted three charges for 2017.

NAIC Cybersecurity Working Group Votes to Approve Insurance Data Security Model Law

NAIC Cybersecurity Working Group Votes to Approve Insurance Data Security Model Law

September 26, 2017

The National Association of Insurance Commissioners (NAIC) Cybersecurity (EX) Working Group (Cybersecurity WG) approved Version 6 (Finalized) of its Insurance Data Security Model Law (Model) on August 7 at the NAIC Summer 2017 National Meeting in Philadelphia.

Nevada Securities Act Amendments – What’s Next?

Nevada Securities Act Amendments – What’s Next?

September 26, 2017

Over the summer, much was written about amendments to the Nevada Securities Act provisions governing financial planners, which became effective July 1, after being signed by the Governor on June 2.

New Partnership Audit Rules – Plan Ahead Before the Tax Bill Arrives

New Partnership Audit Rules – Plan Ahead Before the Tax Bill Arrives

September 26, 2017

A new set of rules for partnership audits (New Audit Rules), which generally take effect January 2018, fundamentally alter the manner in which the Internal Revenue Service (IRS) will conduct audits of partnerships, multi-member LLCs, and certain unincorporated organizations, including joint ventures, treated as partnerships for federal income tax purposes (collectively, Partnership).

OCIE Lessons From Cybersecurity 2 Initiative

OCIE Lessons From Cybersecurity 2 Initiative

September 26, 2017

On August 7, the SEC’s Office of Compliance Inspections and Examinations (OCIE) issued a risk alert containing observations from its Cybersecurity 2 Exam Initiative. As a follow-up to the 2014 Cybersecurity 1 initiative, the Cybersecurity 2 Initiative examined the cybersecurity preparedness of 75 SEC-registered broker-dealers, investment advisers, and investment companies (funds) for the period of October 2014 through September 2015. In its report, OCIE identified issues of continuing concern, and articulated some best practices recommendations.

Pennsylvania Court Holds Fiduciary Duty Exists Only Where Consumer Cedes Decision-Making Control to the Fiduciary

Pennsylvania Court Holds Fiduciary Duty Exists Only Where Consumer Cedes Decision-Making Control to the Fiduciary

September 26, 2017

The Pennsylvania Supreme Court recently held in Yenchi v. Ameriprise Financial, Inc. that a financial adviser owed no fiduciary duty to a couple who purchased a life insurance policy based on the adviser’s advice where they did not cede all of their decision-making control to him.

Plaintiffs Survive Standing-Based Challenge to California Senior Notice and Financial Elder Abuse Claims

Plaintiffs Survive Standing-Based Challenge to California Senior Notice and Financial Elder Abuse Claims

September 26, 2017

In California, actions predicated on alleged senior notice requirement violations and financial elder abuse continue to challenge life insurers.

New Jersey Enacts Unclaimed Life Insurance Benefits Law

New Jersey Enacts Unclaimed Life Insurance Benefits Law

September 26, 2017

New Jersey became the latest state to enact legislation governing unclaimed life insurance benefits.

SEC Cautions on Use of Distributed Ledger/Blockchain Technology to Raise Capital

SEC Cautions on Use of Distributed Ledger/Blockchain Technology to Raise Capital

September 26, 2017

In July, the SEC issued a report addressing the applicability of U.S. federal securities laws to the offer and sale of securities by "virtual corporations or capital raising entities that use distributed ledger or blockchain technology to facilitate capital raising and/or investment."

SEC Investor Advocate’s 2018 Objectives Target Key Issues for Life Insurers

SEC Investor Advocate’s 2018 Objectives Target Key Issues for Life Insurers

September 26, 2017

On June 29, the SEC’s Office of the Investor Advocate released a report that prioritizes addressing the inconsistency in the standard of care applicable to broker-dealers (a suitability standard) versus investment advisers (a fiduciary standard) in fiscal year 2018.

SEC Scrutinizes Multi-Manager Arrangements

SEC Scrutinizes Multi-Manager Arrangements

September 26, 2017

Many mutual funds implement their investment strategies through "multi-manager" (also called "manager of manager") arrangements, particularly funds used to support variable life insurance and annuity products.

SEC Stays Approval of Quadruple-Leveraged ETF

SEC Stays Approval of Quadruple-Leveraged ETF

September 26, 2017

In July, MetLife obtained a win in the Northern District of Illinois when the court granted summary judgment in its favor on a claim that it had breached the duty of good faith and fair dealing in setting interest rates for a retirement plan.

Sticking Firmly to Contract Terms, Court Dismisses Premium and COI Overcharge Claims

Sticking Firmly to Contract Terms, Court Dismisses Premium and COI Overcharge Claims

September 26, 2017

In July, in Hancock v. Americo Financial Life & Annuity Co., Americo achieved a total victory on its motion to dismiss a putative class action in the Eastern District of North Carolina that challenged its premium and COI charges. Hancock v. Americo Financial Life & Annuity Co.

Summary Judgment Win for Insurer in “Stable Value” Interest Rate Setting Case

Summary Judgment Win for Insurer in “Stable Value” Interest Rate Setting Case

September 26, 2017

In July, MetLife obtained a win in the Northern District of Illinois when the court granted summary judgment in its favor on a claim that it had breached the duty of good faith and fair dealing in setting interest rates for a retirement plan.

The Fiduciary Rule Status Update

The Fiduciary Rule Status Update

September 26, 2017

On April 8, the Department of Labor published the so-called "Fiduciary Rule." It defines who is an employee benefit plan’s "fiduciary" for purposes of the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code as a result of giving compensated investment advice regarding assets of a plan or individual retirement account.

Adjusting Claims in Florida Following Hurricane Irma

Adjusting Claims in Florida Following Hurricane Irma

September 25, 2017

As the waters recede from Hurricane Irma, property insurers have many issues to consider as they adjust claims in Florida. This alert discusses a few of those issues.

New York DFS Tightens Cybersecurity Gaps

New York DFS Tightens Cybersecurity Gaps

September 19, 2017

Equifax takes no deposits and makes no loans, but New York now says that it, as well as all other consumer reporting agencies, must protect consumer data to the same degree as banks and other financial institutions.

Assignment of Benefits Legislation in Florida

Assignment of Benefits Legislation in Florida

September 15, 2017

The practice known as the Assignment of Benefits (AOB) is a big problem for Florida property insurers. AOBs have been driving up the cost of property insurance claims in the state for several years.

Business Continuity and Disaster Recovery Checklist

Business Continuity and Disaster Recovery Checklist

September 6, 2017

Conducting a risk assessment and putting a business continuity plan in place now might mean the difference between hours out of operation and days out of operation.

The Uncertainties of Prognostications of the Impact of Hurricanes Harvey and Irma on Catastrophe Bonds and the Reinsurance Market

The Uncertainties of Prognostications of the Impact of Hurricanes Harvey and Irma on Catastrophe Bonds and the Reinsurance Market

September 1, 2017

Much is being written about the extent to which catastrophe bonds (or traditional reinsurance) are "exposed" to or may be called upon to pay losses from Hurricanes Harvey and Irma, and the impact that those storms may have on the ILS market.

DOL Announces New Enforcement Policy on BIC Arbitration Limitation Class Actions

DOL Announces New Enforcement Policy on BIC Arbitration Limitation Class Actions

August 31, 2017

In order for fiduciaries to receive compensation that varies based on their investment advice or from third parties in connection with their advice, they must comply with a prohibited transaction exemption.

Labor Department Extends Applicability Date of BIC Exemption and PTE 84-24 an Additional 18 Months

Labor Department Extends Applicability Date of BIC Exemption and PTE 84-24 an Additional 18 Months

August 30, 2017

The Labor Department has proposed extending the applicability date of the Best Interest Contract Exemption, the Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries, and certain amendments to Prohibited Transaction Exemption 84-24 from January 1, 2018 until July 1, 2019.

Hurricane Harvey: Insurance Statutes and Regulations

Hurricane Harvey: Insurance Statutes and Regulations

August 24, 2017

Hurricane Harvey: Links to relevant statutes, regulations, and claims adjusting standards in Louisiana and Texas.

The DOL Fiduciary Rule: Charting a Course, Avoiding Collisions & Potential Litigation Q&A #2

The DOL Fiduciary Rule: Charting a Course, Avoiding Collisions & Potential Litigation Q&A #2

August 24, 2017

Last month, we wrote about potential litigation issues under the “revised temporary” DOL Rule involving the offer and sale of annuities in the IRA market. This paper continues that discussion.

Big Data: Insurance Innovation Regulation

Big Data: Insurance Innovation Regulation

August 17, 2017

The use of big data and analytics, and other innovative technologies, is transforming the way the insurance business is being conducted. This article describes some of the changes that are occurring and how regulators are attempting to keep pace with them.

NAIC Cybersecurity Working Group Votes to Approve Insurance Data Security Model Law

NAIC Cybersecurity Working Group Votes to Approve Insurance Data Security Model Law

August 13, 2017

Version 6 of the Model incorporates significant changes from the first version released on March 2, 2016, including the narrowed purpose of establishing "standards for data security and standards for the investigation of and notification to the Commissioner of a Cybersecurity Event applicable to Licensees…"

The War Between PAGA and Arbitration in California Continues - This Time Employers Win

The War Between PAGA and Arbitration in California Continues - This Time Employers Win

August 4, 2017

This decision reinforces the importance of employers utilizing arbitration agreements coupled with class action waivers in their employment agreements.

Update on the Status of the Covered Agreement

Update on the Status of the Covered Agreement

August 2, 2017

This article provides guidance with respect to the implementation of the Covered Agreement negotiated and entered into by the Obama Administration with the European Union in January 2017.

California Vacation Vesting Ruling Highlights Importance of Clear Policy Language

California Vacation Vesting Ruling Highlights Importance of Clear Policy Language

August 1, 2017

In Minnick v. Automotive Creations, Inc., the court reaffirmed an employer’s right to have a policy whereby a worker’s entitlement to vacation pay does not vest until after their first anniversary of employment.

Financial Elder Abuse Litigation Against Insurers

Financial Elder Abuse Litigation Against Insurers

August 1, 2017

Based on an analysis of life insurance and annuity cases involving claims of elder abuse, some common themes emerge: the cases are easy to plead and difficult to dismiss, the “type” of allegation might be outcome determinative at summary judgment, and claims of financial elder abuse add little to a court’s analysis of class certification.

Unanimous California Supreme Court Gives Green Light to Plaintiffs to Discover Employee Contact Information

Unanimous California Supreme Court Gives Green Light to Plaintiffs to Discover Employee Contact Information

July 13, 2017

In a big blow to employers, the California Supreme Court unanimously held that plaintiffs and their lawyers must be given access to companywide employee contact information—including addresses and phone numbers—at the onset of a lawsuit and without first establishing a prima facie showing their case has merit.

Florida Adopts New Life Insurance Notice Requirement for Changes in Policy

Florida Adopts New Life Insurance Notice Requirement for Changes in Policy "Status"

July 10, 2017

On June 26, 2017, a new Florida Statute (Section 626.99292) was signed into law, effective immediately, which imposes problematic policyholder notice requirements on life insurers.

New York DFS Requests Information on Use of External Consumer Data and Information Sources in Life Insurance Underwriting

New York DFS Requests Information on Use of External Consumer Data and Information Sources in Life Insurance Underwriting

July 5, 2017

The New York DFS initiated an investigation into the use of external consumer data or information sources in connection with underwriting by issuing a Section 308 information request to all New York authorized life issuers.

Insurers and Brokers May Face UCL Liability for Violations of Insurance Statutes

Insurers and Brokers May Face UCL Liability for Violations of Insurance Statutes

July 1, 2017

The opinion was a beacon of hope for insurers and brokers doing business in California who often face disappointing early rulings and frequently settle.

Chief Compliance Officers Beware

Chief Compliance Officers Beware

June 23, 2017

In recent years, financial regulators have increasingly taken enforcement action against chief compliance officers (CCOs) and others in compliance oversight roles, rather than just against their employers.

Colorado Set to Regulate Cybersecurity Practices of Broker-Dealers and  Investment Advisers

Colorado Set to Regulate Cybersecurity Practices of Broker-Dealers and Investment Advisers

June 23, 2017

On May 15, Colorado became the latest state to publish major regulations tackling cybersecurity in the financial services industry when the Colorado Division of Securities released amendments to existing division rules previously proposed in late March 2017.

Eighth Circuit Affirms Dismissal of RICO Claim in So-Called Shadow Insurance Suit

Eighth Circuit Affirms Dismissal of RICO Claim in So-Called Shadow Insurance Suit

June 23, 2017

In Ludwick v. Harbinger Group, the U.S. Court of Appeals for the Eighth Circuit affirmed the dismissal under the McCarran-Ferguson Act of a federal RICO claim against Fidelity & Guaranty (and its owner and several affiliates) alleging that F&G had engaged in statutory accounting fraud to create a false impression of capital adequacy.

Eleventh Circuit to Weigh in on ‘Business Email Compromise’ Coverage Under Fidelity Bond

Eleventh Circuit to Weigh in on ‘Business Email Compromise’ Coverage Under Fidelity Bond

June 23, 2017

Banks have historically been at the forefront of technological advances in commerce. So it should be no surprise that they and other financial institutions were also among the first to suffer losses related to computer fraud and hacking.

FINRA Issues New Guidance on Social Media and Digital Communications

FINRA Issues New Guidance on Social Media and Digital Communications

June 23, 2017

In April, FINRA issued Regulatory Notice 17-18, which reiterates previous rules and provides additional guidance regarding the application of several key rules governing communications with the public to digital communications

FINRA Moves to Protect Seniors and Other Vulnerable Persons

FINRA Moves to Protect Seniors and Other Vulnerable Persons

June 23, 2017

FINRA has taken another step to protect against what it calls "financial exploitation of vulnerable individuals or individuals with diminished capacity."

FINRA Proposes to Loosen Restrictions on Performance Projections

FINRA Proposes to Loosen Restrictions on Performance Projections

June 23, 2017

The proposed exception would permit broker-dealer firms to provide clients with customized hypothetical investment planning illustrations that include the projected performance of an "asset allocation or other investment strategy."

FINRA Public Offering Proposal Excludes All Insurance Contracts

FINRA Public Offering Proposal Excludes All Insurance Contracts

June 23, 2017

For the first time since 2004, FINRA has proposed major amendments to its requirements that govern the terms of the underwriting arrangements for most public offerings of securities and mandate that such arrangements be submitted to FINRA for review.

More Fund Companies Sanctioned for Misusing Fund Assets for Distribution

More Fund Companies Sanctioned for Misusing Fund Assets for Distribution

June 23, 2017

The SEC recently settled enforcement actions against William Blair and two Calvert companies for using mutual fund assets to pay distribution-related expenses in violation of Investment Company Act Rule 12b-1 and for certain other misconduct.

Mutual Fund Advisers Win Again on Section 36(b) Claims

Mutual Fund Advisers Win Again on Section 36(b) Claims

June 23, 2017

Following a four-day bench trial, New Jersey District Judge Renee Bumb granted judgment to defendant Hartford mutual fund advisers on "excessive fee" claims brought by fund shareholders under Section 36(b) of the Investment Company Act of 1940.

Recent Ninth Circuit Rulings Uphold Plaintiffs’ Efforts to Predicate Claims on Alleged Insurance Code Violations — Likely More to Come

Recent Ninth Circuit Rulings Uphold Plaintiffs’ Efforts to Predicate Claims on Alleged Insurance Code Violations — Likely More to Come

June 23, 2017

Recent rulings suggest insurers face increased risk of suits predicating breach of contract and state unfair trade practices claims on alleged violation of state insurance laws, notwithstanding the lack of an express private right of action.

SEC Guidance Seeks Enhanced Disclosures by Robo-Advisers

SEC Guidance Seeks Enhanced Disclosures by Robo-Advisers

June 23, 2017

In February, the SEC staff issued a guidance update focusing on "robo-advisers," i.e., registered investment advisers (RIAs) who provide online, automated investment advice, through the use of an algorithmic program.

SEC Seeks Public Comments on Standards of Conduct for Investment Advisors and Broker-Dealers

SEC Seeks Public Comments on Standards of Conduct for Investment Advisors and Broker-Dealers

June 23, 2017

On June 1, SEC Chairman Jay Clayton issued a statement seeking comments from interested parties regarding the standards of conduct for investment advisers and broker-dealers providing investment advice to retail investors.

Special Purpose National Bank Charter for FINTECH Firms

Special Purpose National Bank Charter for FINTECH Firms

June 23, 2017

The draft makes clear that FINTECH special purpose banks will not be permitted to engage in any activity that is prohibited for other national banks and will be required to engage in at least one "core banking activity" such as lending money or paying checks.

Summary Judgment for Insurer in Annuity Sales Practices Action

Summary Judgment for Insurer in Annuity Sales Practices Action

June 23, 2017

Like many of the bonus annuity class actions brought in the mid-2000s, the plaintiff in Chambers claimed that the insurer misrepresented the terms of the bonus, that there were no "sales fees," and that the interest adjustment applied to partial surrenders.

The DOL Fiduciary Rule: Charting a Course, Avoiding Collisions & Potential Litigation

The DOL Fiduciary Rule: Charting a Course, Avoiding Collisions & Potential Litigation

June 23, 2017

"From a litigation perspective, this change to a fiduciary status for the sales agent is substantial and in many cases will afford litigants unhappy with investment results, or the ultimate characteristics of a particular form of annuity, the opportunity to second-guess the original decision applying a significant range of issues."

McCarran-Ferguson Act. Reverse Preemption Bars RICO Claims Alleging That Reinsurance Transactions by an Annuity Issuer with Affiliates Were a Sham, Resulting in the Material Misrepresentation of its F

McCarran-Ferguson Act. Reverse Preemption Bars RICO Claims Alleging That Reinsurance Transactions by an Annuity Issuer with Affiliates Were a Sham, Resulting in the Material Misrepresentation of its F

June 22, 2017

Plaintiff sued an annuity issuer and other companies, alleging violation of RICO as a result of alleged “sham” reinsurance transactions with affiliates that resulted in a material and serious misstatement of the financial condition of the annuity issuer, and in the value of an annuity purchased from that annuity issuer being less than represented and paid for.

Georgia Federal Court Finds Policy’s Broad Firearms Exclusion Bars Coverage

Georgia Federal Court Finds Policy’s Broad Firearms Exclusion Bars Coverage

June 15, 2017

The U.S. District Court for the Northern District of Georgia granted summary judgment in favor of AIG Specialty Insurance Co. in a case involving the application of the firearms exclusion in Powe v. Chartis Specialty Insurance Co., No. 1:16-CV-01336.

Catching Up on the Changing Landscape Regarding “Micro” Captive Insurance Companies and the IRS’s Strategy for Curbing Perceived Abuse

Catching Up on the Changing Landscape Regarding “Micro” Captive Insurance Companies and the IRS’s Strategy for Curbing Perceived Abuse

June 14, 2017

Starting with the 2015 iteration of its annual “Dirty Dozen” list, the IRS began an unprecedented crack down on suspected tax shelters using captive insurance companies.