Delaware has proposed regulations to implement the transfer of regulatory authority over managed care organizations from the Department of Health and Social Services to the Department of Insurance. The regulations include a requirement that each managed care organization secure reinsurance to cover catastrophic or unusual losses which would be in excess of the levels of loss which the organization assumes in the basis of its calculation of premium charges. A public hearing on the proposed regulations has been noticed for February 26, 2007. Delaware Proposed Regulation 1403.
Court affirms stay of state court action pending resolution of federal court action
A New York state appellate court has affirmed a stay of an action involving Lloyd's in deference to a pending federal court action concerning coverage and indemnity for asbestos-related claims. In a perfunctory opinion, the court noted that the plaintiffs in the underlying action had “remained inactive for 20 years ….” While the state court action had been filed three years before the action was filed in federal court, the appellate court based its decision on “the familiarity of the federal court with the issues, the substantial identy of the parties, and the interdependence of the issues involving primary and excess insurers ….” Certain Underwriters at Lloyd's London v. Pneumo Abex Corp., Index 602493/02 (App. Div. Jan. 9, 2007).
New York adopts new regulations for insurance reserves
The New York Department of Insurance has adopted revised regulations governing the valuation of individual and group accident and health insurance reserves and emergency regulations governing the valuation of life insurance reserves. The complete re-writing of the reserve requirements relating to accident and health insurance was the first revision of the regulations in that area since 1971. The changes include a change from the use of the 1964 Commissioners' Disability Tables to the 1986 tables, and the adoption, for the first time, of regulations for group insurance. The emergency regulations for life insurance were adopted due to the Department becoming aware that “some insurers have designed certain life insurance products with the clear intent of circumventing existing reserve standards.”
Court remands case to new arbitration panel for further proceedings
After partially vacating an arbitration award as being in manifest disregard of law, a District Court has remanded the case to a new arbitration panel for further proceedings. The Court found it inappropriate to remand the case to the same arbitration panel for further proceedings relating to the issue as to which it had found that the panel had manifestly disregarded Pennsylvania law. Koken v. Cologne Reinsurance (Barbados) Ltd., Case No. 98-0678 (USDC MD Pa Dec. 5, 2006).
District Judge files appellate brief in KPMG criminal tax case
In a highly unusual event, United States District Judge Lewis Kaplan has filed a brief with the United States Court of Appeals for the Second Circuit, defending his opinion relating to the arbitrability of issues relating to KPMG paying attorneys fees for defendants in a criminal tax action, which was the subject of a post on this blog on September 26, 2006. This brief was invited by the Second Circuit in an Order entered December 13, 2006, which provided in part: “Pursuant to Fed. R. App. P. 21(b)(4), we now invite the District Court to address, if it so chooses, the motion for leave to file a mandamus petition.” Stein v. KPMG, LLP, Case No. 06-4358 (2d Cir. Jan. 8, 2007).