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Oregon Ruling: Private Contractors Can be Sued
April 29, 2009
The Oregon Supreme Court has ruled that private contractors working for public agencies can be sued separately for liability claims.

In a unanimous decision, the court said a private company that contracts to perform services cannot avoid liability unless the public body could control the physical details of the conduct leading to the claim.

First Transit Inc. contracted with the Port of Portland for shuttle services between the Portland International Airport terminal and three airport parking lots.

A woman sued First Transit after she was injured while riding on a shuttle bus, but the company argued it was acting as an "agent" of the Port and any lawsuits had to filed against the Port.
Copyright 2009 Associated Press; The Insurance Journal
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Scam Selling Warranty Contracts Over the Phone; Oklahoma Commissioner Files Lawsuit Against Auto Warranty Co.
April 28, 2009
Oklahoma Insurance Commissioner Kim Holland has filed for and received a Temporary Restraining Order against VSI Vehicle Services Inc. in Oklahoma County District Court. The commissioner has also filed a lawsuit against the company.

"It appears the company has refused to abide by the Cease and Desist Order and is continuing to call Oklahoma citizens," said Holland. "I will not tolerate this company's flagrant disregard of the law and will continue to pursue those responsible until the calls stop and they are held accountable."

Holland initiated an investigation after the company randomly called an Insurance Department Anti-Fraud Investigator at home. She filed a Cease and Desist Order after discovering the organization was not a licensed service warranty provider in the state and that VSI was, according to the order, making false and misleading statements in the marketing of their products.

The Missouri-based organization frequently sells service warranty contracts by randomly calling potential customers and soliciting their products under the guise of an expired warranty. Holland urges anyone who purchased a product from the company to immediately contact the Oklahoma Insurance Department's consumer hotline at (800) 522-0071.
Source: Oklahoma Insurance Department, www.ok.gov/oid
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Florida House Approves Property Insurance Measure
April 27, 2009
The Florida House has approved property insurance legislation that promises to reduce the exposure of the state's backup hurricane insurance fund and gradually raise rates for policyholders insured in state-backed Citizens Property Insurance.

Lawmakers approved the proposal (HB 1495) on Friday April 24, 2009, by a 75-33 vote.

Under the House bill, Citizens' rate increases would be limited to 10 percent on average statewide or 20 percent per individual policy. The rate increases would cease once actuarially sound rates are achieved.

In addition, the legislation would begin a process of shoring up the state's property reinsurer, Florida Hurricane Catastrophe Fund, and phase out about $12 billion in reinsurance it provides to private insurers.
The Insurance Journal
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Employers Watching Workers Online Spurs Privacy Debate
April 23, 2009
By now, many employees are uncomfortably aware that their every keystroke at work, from email on office computers to text messages on company phones, can be monitored legally by their employers.

What employees typically don't expect is for the company to spy on them while on password-protected sites using non-work computers. But even that privacy could be in jeopardy.

A case brewing in federal court in New Jersey pits bosses against two employees who were complaining about their workplace on an invite-only discussion group on MySpace.com, a social-networking site.

The case tests whether a supervisor who managed to log into the forum -- and then fired employees who badmouthed supervisors and customers there -- had the right to do so.

The case has some legal and privacy experts concerned that companies are intruding into areas that their employees had considered off limits.

The legal landscape is murky. For the most part, employers don't need a reason to fire nonunion workers. But state laws in California, New York and Connecticut protect employees who engage in lawful, off-duty activities from being fired or disciplined, according to a report prepared by attorneys at the firm Proskauer Rose LLP. While private conversations might be covered under those laws, none of the statutes specifically addresses social networking or blogging. Thus, privacy advocates expect to see more of these legal challenges.
Printed in The Wall Street Journal
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Severe Storm Season Like 2008 Could Occur Once Every 4 to 5 Years
April 22, 2009
As the peak tornado season rapidly approaches in May, Risk Management Solutions (RMS), a provider of products and services for catastrophe risk management, has released a special report analyzing the impact of the 2008 U.S. severe convective storm season. Last year's season, which included nearly 1,700 tornadoes, was the costliest in the past decade, with more than U.S. $10.5 billion in insured losses, and the second most active on record. Although, by chance, there has not been such a severe season for a number of years, RMS analysis reveals that a season similar to 2008 could occur once every four to five years on average.

Severe storms include tornadoes, hail, straight-line winds, lightning strikes and flash flooding. Hail storms account for more than 60 percent of the average annual loss (AAL) compared to 25 percent for tornadoes and 15 percent for straight-line winds, primarily because hail storms cover a larger area and occur more frequently and in coordination with tornadoes. Almost half of the total insured loss last year was caused by the five largest events.
Source: www.rms.com
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Jury: Trucker Who Waved in Car Liable in New Jersey Crash
April 21, 2009
New Jersey has a provision in state law which holds drivers liable if they negligently wave others into traffic. A truck driver who waved a car into traffic just before it collided with a motorcycle has been ordered to pay half of the damages awarded by a New Jersey jury this week.

According to testimony, the June 2006 crash on Route 33 in Neptune occurred after the trucker waved in Thurman Baker of Neptune, who was in a doughnut store lot.

As Baker crossed the highway, his car collided with the motorcycle. Lewis sustained a concussion, a permanent arm injury and cracked five teeth.
Asbury Park Press; Copyright 2009 Associated Press.
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Montana Implements New Motor Vehicle Title and Registration
April 21, 2009
Acting Motor Vehicle Division Administrator Brenda Nordlund said that barring any unforeseen technical difficulties, a new title and registration system for the Motor Vehicle Division will be brought up throughout the state this week.

The new system was developed as part of the MERLIN project - Montana Enhanced Registration and Licensing Information Network. The Montana legislature approved and funded the project to replace a system that was essentially unchanged since the early 1980s. The new computerized process for titling and registering vehicles is a major piece of a fully integrated system that will eventually tie all motor vehicle and driver licensing services to common customer accounts.
The Insurance Journal
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Congressman Asks If AIG Used Bailout Fund for PR Firms
April 15, 2009
The head of a U.S. House of Representatives committee sent a letter Tuesday to American International Group Inc demanding to know if it used bailout money to pay for public relations firms to attack critics.

Several congressional panels are probing the rise and fall of AIG, which has received about $180 billion in government bailout money so far in an effort to stave off collapse. U.S. taxpayers now own about 80 percent of the company.

"I would be extremely disappointed to learn that any of the billions of taxpayer dollars invested to support AIG may have been diverted to finance a public relations campaign against critics of the AIG bailout," Rep. Ed Towns, a New York Democrat, wrote in a letter to AIG chief executive Edward Liddy, dated April 14.
Copyright 2009 Reuters
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North Carolina Moped Insurance Law Halted
April 13, 2009
An effort to regulate mopeds in North Carolina got diverted after senators rejected an effort to require riders to carry liability insurance.

Senate Majority Leader Tony Rand last week pulled his bill to require a moped to get a license plate and riders to wear a helmet. Rand said insurance ensures scooter riders take responsibility for accidents.
Copyright 2009 Associated Press; The Insurance Journal
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Your Trade Laws at Work: Dangerous Chinese-Made Drywall in Over 100,000 Homes; U.S. Lawmakers Seek Ban on Tainted Chinese Drywall
April 10, 2009
U.S. Sens. Bill Nelson, D.-Fla., and Mary Landrieu, D.-La., have filed legislation for a recall and immediate ban on tainted building products from China, as more and more people around the country are reporting problems in their homes built with imported drywall.

The legislation presses the Consumer Product Safety Commission ( CPSC ) for a recall on Chinese-made drywall, based in part on findings by a Florida homebuilder and state officials who have confirmed the presence of sulfide gases in homes built with the drywall.

In addition, the legislation calls on the commission to issue an interim ban on imports until it can create federal drywall safety standards so consumers are protected in the future.

Among other things, the drywall is linked to seeping sulfide gases that can corrode electrical wiring and components of air-conditioning and other household appliances.

The potential scope of the problem is big. Officials believe between 60,000 and 100,000 homes nationwide may contain tainted drywall. Nelson represents Florida, where an estimated 36,000 homes are believed to contain Chinese-made drywall.

Nelson noted that during a recent three-to five-year period drywall from China arrived at ports around the country, including 60 million pounds in New Orleans and 27 million pounds in Mississippi - two areas hard hit by Hurricane Katrina.

"I believe you're going to see this is widespread," said Nelson, a member of the Senate Commerce Committee that oversees the CPSC. "Anytime you have mounting evidence of potentially toxic goods you have an obligation to act quickly to protect consumers."

On Feb. 13, Nelson wrote the CPSC and requested a federal investigation into the imported drywall. The CPSC launched an investigation two weeks later. Last week, a team of federal investigators was in southwest Florida inspecting the electrical systems of suspect homes.
The Insurance Journal
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Misidentification Creates Problems for Insureds, Agents, Attorneys
April 8, 2009
Among the issues that plague coverage lawyers and insurance agents, and especially insureds, is that of a misnamed, unnamed or mischaracterized insured. All too often in insurance policies, corporations are designated as assumed names, partnerships as individuals in corporations, or the names simply do not match the insured.

The problem is compounded when there may be several related entities, all of which are insured or intended to be insured. A related problem exists when the addresses are wrong or the insured's business is not accurately described.

These issues are also problematic for agents. As the intermediary between insurer and insured, fingers may point at the agent from either direction if there is a mistake.

Even when the named insured is correctly named, the type of entity can determine coverage. Managers of a limited liability company are insured, executive officers and directors of the corporation are insured, and spouses of partners in a partnership or joint venture are insured. If an entity is not named, it may have no coverage whatsoever. Misstating the form of an entity, be it corporation, partnership or sole proprietorship, can also lead to disastrous consequences.
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ACE Launches New Homeowners Coverage for High Net Worth Families
April 3, 2009
ACE Private Risk Services, part of the ACE Group of Cos., unveiled a new homeowners policy designed to meet the needs of high net worth customers.

The new policy, which will be offered through independent agents and brokers, allows families with substantial assets to tailor coverage to their specific needs. It includes unlimited loss of use coverage, mold coverage of up to 100 percent of a home's insured value and optional endorsements for primary flood and surface water coverage and family security coverage for home invasion, child abduction, kidnapping, car jacking, and more

The policy is one component of the ACE Platinum Portfolio insurance program, which ACE launched in May 2008.

"Like many consumers, clients with substantial assets have become more value conscious and risk adverse in today's economy," said Bob Courtemanche, CEO of ACE Private Risk Services.
The insurance Journal
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Lawsuit Against AIG Seeks Return of Bonuses, Perks
March 30, 2009
A lawsuit filed on behalf of shareholders of American International Group Inc. is demanding company executives return millions of dollars in bonuses, dividends and other perks.

The lawsuit, which seeks class-action status, also seeks unspecified damages as well as the removal of AIG's top brass. It claims shareholders have lost $200 billion because of AIG's gross mismanagement and corporate waste over the past 81/2 years.

The company also gave misleading and false assessments when it reported earnings in 2006 and 2007, according to the lawsuit.
Copyright 2009 Associated Press; The insurance Journal
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"Good Hands" for Employees? Allstate Agents Back in Court over Claims of Age Bias by Insurer
March 25, 2009
A group of insurance agents asked a federal appeals court on Monday to revive an age discrimination lawsuit over the Allstate Insurance Co.'s decision to switch thousands of them from employees to independent contractors.

In oral arguments, a three-judge panel questioned a lower court's brief order that dismissed what the panel called a complex and important case.

The former Allstate agents argue that the insurance company, which is based in Northbrook, Ill., illegally switched 6,400 of them from employees to independent contractors in 2000, violating federal pension security, age discrimination and other laws.

Some of the agents were days away from the 20-year service mark needed for early retirement when the conversion took place, said lawyer Peter Buscemi, who represented the plaintiffs.

The Equal Employment Opportunity Commission has joined the case, accusing Allstate of retaliating against 19 agents who refused to sign releases required to continue as contractors. The releases prohibited the agents from suing for any past discrimination.
The Insurance Journal
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5th Circuit Vacates Part of Katrina Insurance Case Award; Couple's trial was the first to be held in Louisiana against State Farm over Hurricane Katrina damage
March 13, 2009
Jurors shouldn't have awarded money to a south Louisiana couple for their allegation that an insurance company acted in bad faith when it denied their homeowner claim after Hurricane Katrina, a federal appeals court has ruled.

Wednesday's ruling by the 5th U.S. Circuit Court of Appeals vacates a portion of a November 2007 judgment against State Farm Fire and Casualty Co. that awarded Michael and Judy Kodrin roughly $356,000 in damages and penalties, plus attorney fees. Their trial was the first in Louisiana against State Farm over damage from the August 2005 hurricane.

John Redmann, a lawyer for the Kodrins, said the ruling could cost his clients up to about $250,000 that jurors and U.S. District Judge Carl Barbier had awarded for penalties, mental anguish and attorneys' fees. "Felt like I got punched in my stomach. So did my clients," he said.
Copyright 2009 Associated Press. www.law.com
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A Win for Injured Patients
March 4, 2009
The Supreme Court made a wise and surprising decision on Wednesday when it rejected a drug company�s claim that it cannot be sued for damages in state courts if a product and its label have been approved by the Food and Drug Administration. The 6-to-3 decision will benefit consumers at the expense of drug manufacturers.

It demolished the notion that federal regulatory rulings automatically pre-empt the states from enforcing even tougher standards on drugs. It also exposed as a sham the Bush administration�s strenuous efforts to protect its allies in industry with phony pre-emption claims.

The case involved a Vermont woman who developed gangrene after a botched injection of an anti-nausea drug made by Wyeth, necessitating amputation of her hand and lower arm. The needle is supposed to be inserted into a vein, but if the drug enters an artery by mistake, as it did in this case, it causes swift and irreversible gangrene. The intravenous �drip� technique is much safer because the drug is injected into a stream of liquid already flowing into a vein.
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Judges should recuse themselves from cases involving campaign benefactors; Judge reversed $50 million jury verdict against the company that gave him $3 Million
March 3, 2009
The U.S. Supreme Court should reverse a lower court ruling in the case of Caperton v. Massey, argue retired Washington Supreme Court Justice Robert Utter and attorney Charlie Wiggins. In the case, a judge who received $3 million in campaign funds from the defendant refused to recuse himself. They also support the Washington State Supreme Court adopting a rule to prevent this thing from happening here.

Should a supreme-court judge hear a case in which the chief executive officer of the company being sued spent $3 million to help elect the judge?

The U.S. Supreme Court is considering the question in Caperton v. Massey, in which a judge who benefited from $3 million in support refused to withdraw from the case. He then voted with two other judges to reverse a $50 million jury verdict against the company. The court will hear argument Tuesday and decide by the end of June whether the judge's participation in the case violated the due process right to an impartial judge.
Copyright � 2009 The Seattle Times Company
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