Insurance News & Commentary: You Should Read…

For your convenience, here’s a quick roundup of news and legal advisories covering a broad range of corporate insurance matters.  From the emerging trend of cyber insurance to life settlement provider licenses to COBRA considerations and pig farm odors, we think you should read (and watch):

Negotiating the New World of Cyber Insurance (Pillsbury):

“Companies in the financial services, health care, retail and hospitality, communications, media and technology sectors have tended to be early adopters of cyber insurance, for the obvious reason that they possess large amounts of private customer data and are attractive targets for data thieves. In addition, a company that manufactures or sells an extremely popular consumer product may be more likely to face hacking attempts. The same is true for companies whose leadership is high-profile, or especially outspoken on controversial issues…” Read on>>

Insurance Implications of Online Terms and Conditions (Zelle Hofmann):

“As you read this sentence, someone is accepting — without thought — online terms and conditions to purchase the latest version of Angry Birds. Online terms and conditions are not limited to $1.99 application purchases, however, and are increasingly incorporated by reference into a variety of contracts. Indeed, as a number of courts across the country are using traditional contract principles to enforce online terms and conditions incorporated by reference into contracts, there may be surprising effects on insurers…” Read on>>

Benefit News of Note For Human Resources and Finance Departments (Poyner Spruill):

“Some of the nation’s largest consulting firms (Aon Hewitt and Mercer), as well as other companies in the insurance business, are rolling out private health insurance exchanges for employers.  With a private health insurance exchange, a company provides its employees with a lump sum and then lets the employees choose from an array of insurance products that can be offered by more than one insurance company.  This type of arrangement may appeal to companies that wish to provide their employees with more flexibility…” Read on>>

Contract Language on Pension Withdrawal Liability Does Not Violate Public Policy (Franczek Radelet):

“The court of appeals rejected the union’s public policy argument and affirmed the district court judgment. The court analogized the indemnification language to a section of the Multiemployer Pension Plan Amendments Act which permits a fiduciary to purchase insurance to cover withdrawal liability. In the court’s opinion, ‘[t]here is no logical difference between contracting with an insurance company…and negotiating an indemnification provision …with the Union. Under the agreement, the Union is the entity analogous to the insurance company….'” Read on>>

The NAIC Releases Draft ORSA Model Act for Public Comment (Sutherland)

“The ORSA Model Act requires all insurers meeting certain size thresholds and their ‘insurance groups’ (which are defined to include those insurers and affiliates in an insurance holding company system) to conduct an ORSA, in accordance with the NAIC ORSA Guidance Manual, annually. The NAIC adopted its ORSA Guidance Manual (which provides insurers and regulators with guidance on what an ORSA should entail and what an ORSA Summary Report should address) during the NAIC’s 2011 Fall National Meeting. An insurer’s ORSA must be appropriate to its ‘nature, scale and complexity’…” Read on>>

State of the States: Health Insurance Exchanges (McKenna Long & Aldridge):

“Even with all eyes focused on the Supreme Court’s consideration of the Affordable Care Act, there was plenty of activity in the states this week on the exchange front. In particular, Democratic governors had a rough week moving exchange legislation forward, and in some cases, are now threatening to use Executive Orders to create exchanges…” Read on>>

California Department of Insurance Imposing Strict Standards on Applicants for Life Settlement Provider Licenses (Barger & Wolen):

“The California Department of Insurance has issued “Intent to Deny” letters to at least four applicants for life settlement provider licenses based upon a “lack of financial stability.” Ironically, at the same time the Department held a pre-notice hearing to discuss its plans to seek to promulgate regulations that will set forth financial stability standards…” Read on>>

Global HR Hot Topics: Expatriates, US Tax Withholding, US Social Security Contributions—And COBRA (White & Case):

“When a US taxpayer working abroad participates in foreign medical insurance plans—plans ‘maintained outside the US primarily for the benefit of non-resident aliens’—then ERISA does not apply: ERISA explicitly excepts these plans. Terminated American expats, therefore, get no medical insurance continuation rights under COBRA/ERISA if they participated only in foreign medical insurance plans. (Indeed, as a practical matter, a US employer would have a tough time extending COBRA benefits under a foreign employee medical insurance plan—foreign plans tend to require that beneficiaries be current employees.)…” Read on>>

Once Bitten, Twice Shy: COBRA Excise Tax Audits May Add to COBRA’s Bite (Littler):

“The advent of Health Care Reform has not lessened the importance of complying with existing Employee Retirement Income Security Act (ERISA) and Internal Revenue Code requirements for employer-provided group health plans, such as COBRA, which requires covered health plans to provide certain notices and the opportunity to elect continued coverage to covered persons (qualified beneficiaries) who would otherwise lose coverage because of certain “qualifying events” such as termination of employment, loss of dependent status, and others…” Read on>>

Pennsylvania Court Holds Pollution Exclusion Applies to Pig Farm Odor Claim (Traub Lieberman):

“The insured operated commercial pig farms in several states, including a facility in Indiana that contained some 2,800 sows and their babies.  The facility collected the pig excrement into a large, cement pit that eventually drained through a drag line.  The drag line, in turn, deposited the waste onto nearby fields for use as fertilizer.  The insured and other entities were sued by several neighbors who alleged that the facility produced “harmful and ill-smelling odors, hazardous substances and contaminated wastewater” that resulted in personal injury and property damage…” Read on>>


[Video] The Benefits of WRAP Insurance on Large Construction Projects [Allen Matkins):

“WRAP insurance in a single “WRAP insurance program” can cover all players in a construction project. These programs are typically either owner controlled or contractor controlled. These WRAP programs can often save significant project costs due to reduced premiums and reduced costs of potential litigation…” Go to the video>>

Additional Insurance Law news and updates? You know where to find them.