A “bandeja paisa”: recent trends in insurance law, rising litigation against brokers and a new Florida Bill that exempts certain parts of claims files

Insurance Broker Liability To Clients: Two Recent Multimillion-Dollar Cases May Signal A Growing Trend Toward Broker Liability, Geoff Fallon, 4 No. 21 Andrews Insurance Bad Faith Litig. Rep. 8, Andrews Insurance Bad Faith Litigation Reporter February 24, 2009
Geoff Fallon, a senior vice president of Risk Audit LLC, discusses two recent verdicts in favor of insureds against their brokers and the implications for broker liability. In the fourth quarter of 2008 two jury trials resulted in judgments of $24 million against Aon Corp. and $48.5 million against Marsh USA Inc., the nation's two largest insurance brokers. In both cases the insureds, i.e., the brokers' clients, sued their brokers after arbitrations with the insurance carriers found no coverage.

Claim against agent unrelated to coverage, ind. Fed. Judge says, Biernacki v. State Farm, 4 No. 21 Andrews Insurance Bad Faith Litig. Rep. 4, Andrews Insurance Bad Faith Litigation Reporter February 24, 2009
An Indiana federal judge has refused to dismiss a misrepresentation claim against an insurance agent but sent the case back to state court because the presence of the agent as a defendant defeats diversity jurisdiction. In 1988, the opinion says, Barbara and Leslie Biernacki bought a State Farm policy from agent Mick Gapen. The policy was in force when a fire caused more than $70,000 in damage to their home in Crown Point, Ind., on Sept. 3, 2007.When State Farm denied coverage, the Biernackis sued the agent.

New Orleans Doctor Covered For Shutdown Caused By Katrina, Yount v. Lafayette Ins. Co., 4 No. 22 Andrews Insurance Bad Faith Litig. Rep. 4, Andrews Insurance Bad Faith Litigation Reporter March 10, 2009
A Louisiana appeals court upheld a $70,000 award for a doctor forced out of her office suite by Hurricane Katrina, finding that she was entitled to lost income under her business-interruption policy. The 4th Circuit Court of Appeal said the interruption of Dr. Beverly Yount's practice was caused by damage from wind and rain, not floodwater, and thus covered by the policy.However, the court upheld a directed verdict in the insurer's favor on Yount's claim for statutory bad-faith penalties.

Civil Procedure, Class Actions, Commercial Law, Consumer Protection Law, Insurance Law Troyk v. Farmers Group, Inc. , California Case No. D049983, March 10, 2009
In a class action suit against Farmers Insurance, grant of plaintiff's motion for summary judgment is reversed where plaintiff did not carry his burden to show there is no triable issue of fact regarding the element of causation for his standing under the Business and Professions Code to prosecute the Unfair Competition Law cause of action on behalf of the class members. Defendant violated the Insurance Code's disclosure requirement, as the term "premium" includes a service charge imposed for the payment in full of the stated premium for policy's one-month term, which was not disclosed in the policy.

2009 Florida House Bill No. 961 111th Regular Session (SUMMARY - NETSCAN) Pub. Rec./Florida Insurance Guaranty Association; Provides exemption from public records requirements for specified claims files, medical records that are part of claims file, information relating to medical condition or medical status of claimant, & records pertaining to matters reasonably encompassed in privileged attorney-client communications of Florida Insurance Guaranty Association; provides for limited duration of exemption for claims files, etc. EFFECTIVE DATE: 07/01/2009 2009 FL H.B. 961 (NS)

Insurer May Rescind Life Policy After Discovering Untruths, Northwestern Mut. Life Ins. Co. v. Gil, 4 No. 21 Andrews Insurance Bad Faith Litig. Rep. 1, Andrews Insurance Bad Faith Litigation Reporter February 24, 2009
A federal judge in Connecticut has allowed an insurer that allegedly discovered numerous false statements on a life insurance application to rescind a murder victim's $15 million policy. The decision means the widow's counterclaims, including one for bad faith, were dismissed, and she will collect nothing under the policy.According to the opinion, Northwestern Mutual Life Insurance Co. issued a $15 million life insurance policy to Andrew Kissel. Kissel had a history of mental illness.

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