A report by Allstate has some questioning whether the insurer’s bookkeeping practices could hurt investors and policyholders in the long run, the Washington Post reports. According to the newspaper, accounting changes provided year-end boosts of $347 million and $365 million, respectively, to company coffers. Such accounting practices could muddy the waters for those trying asses the company’s financial strength, the newspaper says
Attorneys say that insurance claims will likely be an active front for Bernard Madoff investors seeking to recover losses from the massive Ponzi scheme. However, not everyone is certain what role insurance coverage will play in the upcoming legal wrangling. Variances in types, levels and origins of coverage will make it difficult for investors to recover even small percentage of losses, one attorney said.
A federal appeals court has reversed a lower court ruling that denied attorneys fees to a disabled lawyer who sought long-term disability benefits from insurer First Unum. In reversing, the 2nd Circuit Court of Appeals found that Southern District of New York Judge Thomas P. Griesa had erred in denying prejudgment interest and fees because First Unum had not acted in bad faith. The case is Slupinski v. First Unum Life Insurance Co.
Great American Insurance Company has announced that it would not pursue a controversial legal defense in a case stemming from a 2007 Houston office fire. Great American had previously argued that it should not be held liable because of a pollution exclusion in its policy. The insurer posited that the deaths of three workers were caused by smoke, fumes and other pollutants rather than by the fire.
The Texas Supreme Court is scheduled to decide whether Nationwide Insurance should honor a $300,000 auto insurance policy purchased by a man who injured several members of a family during a high-speed chase with police. Attorneys for the insurer argue that the driver Richard Gibbons violated the intentional act exclusion of his contract by engaging in behavior that was bound to lead to an accident. However, an attorney for the family contends that there is no evidence that Gibbons acted intentionally to cause the crash. Justices are expected to rule on the case sometime next year.
An Oklahoma jury has ordered Farmers Insurance Co. to pay $80 million to a class of policyholders who claimed that the insurer underpaid claims. In the lawsuit, policyholders alleged that Farmers engaged in bad faith and fraud by failing to pay for general contractors. The award includes $50 million in compensatory damages and $30 million in punitive damages.
