Claims And Issues

One-Stop Shop Insurance Sales: Returns?

    Premiums Accepted For Life, But Not For Property Insurance.   

    Huge CatClaims in 2004 and 2005 and large profits in 2006 have been the subjects of previous posts here.  One possible approach to the combination of these twin facts involves two steps.   Proponents see the two steps together as leading to even greater profits in the Insurance Industry.

    The first step these persons see is to eliminate risk.  This involves  eliminating all CatClaims Coverage such as in Florida.  Steps to eliminate CatClaims Coverage include cancellation of existing Homeowner's Policies where permitted, or issuing renewal Policies with what are in effect total CatClaims Exclusions where authorized, or not issuing Homeowner's and other First-Party Property Policies at all.

    The second step is to divert resources from the eliminated risk to  a different  source of profit.  Financial planning products for targeted prospects make a favored source for proponents of this method.  Targeted prospects are not limited by geographical location under this plan.  Prospects for financial planning products can live anywhere.  So long as prospects possess the capacity for Life Insurance Policies or for such other financial products as annuities, they qualify as targets under this approach.  Some label this second step as the much-attempted 'one-stop shopping' goal for selling Insurance.  One of the major Insurance Companies reportedly chooses this double approach, reported for example in this Subscription Required Article by Liam Pleven, "Hurricane Losses Prompt Allstate to Pursue New Path" (Wall Street Journal, Friday, November 24, 2006, page A1, col. 1)(Subscription Required).

    Consider something else, however.  If a prospect for Life Insurance is not a prospect for CatClaims Coverage -- because she or he cannot obtain Homeowner's Insurance for example -- then that prospect cannot live just anywhere if they want to be protected against CatClaims.  Businesses have their own issues obtaining CatClaims Coverage in Hurricane or Earthquake or other Catastrophe prone areas, but businesses cannot locate to any geographical area where employees are not available to staff that business.  Florida is not alone in bracing for these effects although the double approach to Insurance Profits outlined above hits Florida very hard.  Other States and their locales which will feel the effects of a double approach of the kind outlined in this post include the Gulf Coast -- Texas, Louisiana, Mississippi, Alabama, and Florida -- and also the Atlantic Coast from Florida north to Georgia, South Carolina, North Carolina, Virginia, Maryland, Delaware, New Jersey, New York, Connecticut, and Rhode Island.

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP.  ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR INSURANCE ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

ERISA May Not Be Healthy.

    Employers in the United States are all but alone in the world in one respect, at least:  They bear the burden of the majority of Health Plans in the United States.  Governments shoulder that burden in virtually every other nation.  Yet Employers in the United States do not try to shift the burden, just to tweak the edges and "fix" it.  There are alternatives to the Health Insurance Crisis in the United States to making Health Insurance Employer-based, but no alternatives can be pursued if no-one brings them up.   The issue is thoughtfully explored in Joe Nocera, "Talking Business/Resolving to Reimagine Health Costs" (New York Times Nat'l ed., Saturday, November 18, 2006, page B1, col. 1)(subscription required to the article).

    If Employers are not responsible for Health Insurance and Health Plans, is ERISA necessary?

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR INSURANCE ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

Zurich Net Profit 3Q 2006 3x 3Q 2005.

    "Record Business Operating Profit and Net Income", Too, Reported
    for the First Three Total Quarters  Ending September 30, 2006.

    Zurich Financial Services reports that its Third Quarter total net profit in 2006 is triple the amount of its Third Quarter Quarter net profit in 2005.  This information is gleaned from but not stated out loud in Zurich's seven-page single-spaced press release earlier this week.  Here is a link to it:  Zurich Financial Services Press Release, "Strong Operating Performance Fuels Excellent Nine Month Results for Zurich Financial Services", dated November 16, 2006.

    This press release notes that caution is advised:  "This communication must not be acted on or relied on by persons who are not relevant persons."  It advises, further, that Business Operating Profit is way up due in part to "relatively low levels of natural catastrophes".  Contributing factors are many including that Underwriting Profit is up, and so is investment income.  Underwriting Profit for "general insurance" at Zurich for the Third Quarter of this year is $1,100,000,000.00 or One Billion, One Hundred Million U.S. Dollars.  That is a "Profit" total, not gross Premiums, which would have to be more than that amount of course.  This Profit compares with an Underwriting loss, says Zurich, for the corresponding period in 2005, of $176,000,000.00 or One Hundred, Seventy-Six Million U.S. Dollars.

     Zurich's North America Commercial operations in particular increased Property Insurance Premiums "in catastrophe prone regions," with Liability Insurance Premiums declining in those areas.  However, if all politics is local, as they say, then perhaps all Insurance Premiums are global.  Premium results reported by Zurich for its Global Corporate Division reflect "strong increases in US catastrophe prone exposures," which are offset by decreased Premiums for US Liability Insurance and by decreased Premiums for United Kingdom Liability and Property Insurance, Zurich notes.

    CatClaims from U.S. Hurricanes struck Zurich's results one year ago at this time, whereas it appears that Zurich's General Insurance Division Premiums this year generated increasing Premiums for the first time in years.  Some of these results are briefly analyzed (subscription required) by Gorian Mijuk, "Zurich Financial Net More Than Doubles" (Wall Street Journal Friday, November 17, 2006, page  C4, col. 6)(subscription required).

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR INSURANCE ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

CatClaims, Coverage, Part Disclaimer With Part Payment ....

                            and Florida Statutory Bad Faith.

    Two days before this post, Florida's First District Court of Appeal issued a Catastrophe Claim decision in a First Party Bad Faith case.  The decision does not represent new law but it is significant.  The results are a reminder to people who have handled Claims of this kind and a caution to people who have not.  Here is a link to the case:  http://opinions.1dca.org/written/opinions2006/11-15-06/05-5503.pdf.

    Hurricane Ivan totalled the residence of Mr. and Mrs. Roy and Kerry Golmon in 2004.  Vanguard is the Golmons' Homeowner's Insurance Company.  Vanguard paid part of its policy limits for the residence, a fact which is buried in the opinion, but left unpaid some of the loss to Mr. and Mrs. Golmons' dwelling, and Vanguard did not pay any part of the Golmons' other claimed losses such as Other Structures, Personal Property, and Loss of Use among others.  Vanguard denied any remaining Coverage on the ground that is at the heart of many, many CatClaims Coverage disputes:  Vanguard refused to pay the full policy limit(s) "because the loss to the Golmons' property was caused by both wind damage, which was covered under the policy, and flood damage, which was not covered." 

    The Golmons sued Vanguard for breach of contract and for Florida Statutory Bad Faith.  Vanguard filed a motion to dismiss the Statutory Bad Faith counts which the Trial Court denied.  On appeal, Florida's First District applied established law to hold two things:  First, in Florida establishing Insurance Coverage is a necessary first step or condition to pursuing these Statutory Bad Faith Claims and, in addition, the Insurance Company would be prejudiced if it was forced to defend itself simultaneously on the Contract Claim and on the Bad Faith Counts.  The First District reached these twin holdings regardless of the fact that "Vanguard's attorney conceded at the hearing that the insurer had some liability under the policy".  (Vanguard paid part of its policy limit for loss that Vanguard apparently admitted is covered under its policy.)  The First District held that the Trial Court's finding that Insurance Coverage is undisputed in this case, is erroneous:  "Both the existence of liability and the extent of damages are elements of a statutory cause of action for bad faith that must be determined before a statutory cause of action for bad faith will lie."

    In quashing the Trial Court's Order, however, the First District strongly suggested that the Trial Court should consider abating but not dismissing the Bad Faith Claims against Vanguard while the case goes forward on the Contract Claims in which the issue of Coverage will be determined.
 
REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR INSURANCE ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

Employer Restaurants Sue San Francisco for Health ....

They May Lose Their Hearts, But Not Their Wallets:  ERISA Rules, They Say.

    There are 2,500 restaurants open for business in San Francisco.  After reportedly negotiating with the Government of the City of San Francisco, the Golden Gate Restaurant Association ("GGRA") has sued the City in Federal Court.  The group claims to represent San Francisco restaurants and their interests.  It seems that the City passed a Health Care Program contained in a "Health Care Security Ordinance" in July, 2006 which is set to take effect in July, 2007.

    The restaurant association says that it is in favor of health.   However, part of the City's Program mandates Employers to pay money to support the provision of health services to otherwise uninsured people in San Francisco. The GGRA alleges in its Federal Case that this provision of the San Francisco city ordinance violates the exclusive domain of a Federal Statute, the Federal Employee Retirement Income Security Act ("ERISA").

    Under the ordinance, the city does not offer Health Insurance as such.  Instead, the ordinance is directed at paying doctors and hospitals who will provide health care to some 82,000 presently uninsured people in San Francisco.  To accomplish this end, the ordinance requires payments into the Program from various sources including from businesses with 20 or more employees.

    The GGRA's Federal Court Complaint apparently contains the restaurant association's position that the rest of the San Francisco ordinance should remain intact even if the employer payment mandate is struck down.  An electronic search of the Federal Court for a copy of the Complaint has not yielded a copy to date.  However, the Case Number in the United States District Court for the Northern District of California is 3:06-cv-06997-JSW.  Perhaps an enterprising reader will send us a copy of the Complaint and I will be glad to then post it here.  In the meantime, see the news report of this new Federal Case invoking ERISA and Health Insurance in Carolyn Marshall, "Restaurant Group Sues Over Health Plan" (New York Times, Nat'l ed., Tuesday, November 14, 2006, page A14, col. 3) or in this article posted online:  Restaurant News Resource (11.08.2006).

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR INSURANCE ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

 

Healthy Alternatives Considered For Health Insurance Plans.

    Health Insurance presents hotly contested issues in the United States.  With that said, proposals are being made for Health Insurance alternatives that would reduce or supplement the burden borne so heavily by Employers providing Health Insurance to employees.  The proposals have received initial and tentative support from "liberal" groups and from "conservative" groups alike.  Consumer groups are similarly recording favorable comments about these proposals.

    Who is making these current proposals?  Health Insurance Companies are.  The features are many but not terribly complicated.   For a comprehensive report see Robert Pear, "Health Insurance Industry Urges Expansion of Coverage" (New York Times, Nat'l ed., Tuesday, November 14, 2006,  page A14, col. 3).

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR INSURANCE ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION. 

Discretionary Disability Determination, No ERISA Claim.

                    But the Administrator is Not Entitled to Attorney's Fees
                    Without Bad Faith or Harassment.   

    Ms. Brenda Motes was once a Human Resource Generalist employed by Arthur Andersen LLP.  She was enrolled in the Arthur Andersen LLP Group Long Term Disability Insurance Plan, which was underwritten by Aetna.  She worked until she could no longer perform her job on account of "back pain and physical complications, including fibromyalgia," at which time she began receiving long-term disability benefits under the Plan because she was totally disabled, reports the Federal Court in Download Brenda_Mote_v. Aetna Life Ins. Co. (N.D. Ill. Case No. 05C6212, Opinion Filed November 3, 2006).pdf.  Ms. Mote received disability benefits for five years and eight months.

    Aetna then "reevaluated her claim" and notified Brenda Mote that  she was no longer totally disabled or entitled to such benefits under the Plan based on a review of her file including "notes" from physicians, independent medical reports, and other medical records.  She appealed, the Plan stood by its initial reevaluation decision, and she filed suit under ERISA to reinstate her disability benefits.  The Plan provided the Plan Administrator, Aetna, with discretion to determine benefits due under the Plan and to interpret the Plan's provisions:  "That language explicitly spells out Aetna's discretionary authority both to make benefits determinations and to interpret the Plan's language."  (Slipsheet Op. at page 7.)

    Since the Plan provided the Adminstrator with such discretion, the Federal Court is powerless to review the Administrator's decision to terminate long-term disability benefits in this case unless the record establishes that the decision was "arbitrary and capricious".  This means that in a case like this, the Federal Courts do not ask whether the determination was correct.  "'Instead, the only question for us is whether the adminstrator's decision was completely unreasonable.'"  (Slipsheet Op. at page 9.)

    The Federal Judge in this new case could not say that on the record, Aetna's determination regarding Brenda Mote's conditions was completely unreasonable or arbitrary and capricious.  Accordingly, the Federal Court granted Aetna's Motion for Summary Judgment on Ms. Mote's ERISA Claim.  However, there is a postscript of sorts.

    Aetna claimed that its Attorney's Fees should be paid once Aetna defeated the ERISA Claim.  This is the legal standard applied by the Federal Court to Aetna's Attorney Fees Claim:  "'Was the losing party's position substantially justified and taken in good faith, or was that party simply out to harass its opponent?'"  Even though the ERISA Claim "has proved unsuccessful," it is supported here by "reasonable bona fides".  Aetna did not claim either Bad Faith or harassment by Brenda Motes.  Aetna's Attorney Fees Claim was concisely denied:  "In sum, this Court denies the request for an award of attorneys' fees to the Plan."

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR INSURANCE ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

Decades Double CatClaims, Maybe, But Nanotech Not Scary.

    At a current conference outside Orlando, Insurance Industry insiders predict that only two previous Third Quarters in the past decade provide fewer CatClaims than the current or Third Quarter in 2006 will provide.  See Jerry W. Jackson, "Insurance Group Looks Down the Road and Sees Catastrophes" (Orlando Sentinel, Tuesday, November 14, 2006, page C1).  That is not the ground upon which to justify the increased Premiums that today's CatClaim Coverages demand, of course.  At the Orlando conference, the same and other industry insiders are also predicting that CatClaims may double every decade.

    Global warming brings greater risk that justifies greater Premiums.  In general terms, that is understandable and understood.  However, there are suggestions reported at the current conference of industry insiders that unseen Claims may spring from nanotech research or from genetically changed foodstuffs, and also that the Insurance Industry is losing and will lose money from understated Renewal Premiums and, as is always mentioned at these conferences, from the terror not only of verified Insurance Fraud but also from the frightening and unverified prospect that some people and businesses may make false Claims.

    Continued CatClaims are reason enough to raise CatClaims Premiums.  Future Hurricanes and other weather-caused Catastrophes deliver their own present fear.  Raising prospects of things unseen that have not happened and are not likely ever to happen in the realm of human experience, is an activity that is not necessary nor useful.

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR LEGAL ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

Malice and Punitive Damages

    In most First Party Bad Faith cases in the United States, even though perhaps enough "malice" is shown to support a First Party Bad Faith Claim, that proof is not always enough to also support a Claim for Punitive Damages.  Generally, there must also be shown an even more egregious or worse kind of "malice" in order to assess Punitive Damages, even in most First Party Bad Faith Cases in America.  Under the law in some jurisdictions, however, proof of malice for a First Party Bad Faith Claim can also be, and is, the same proof that will legally entitle the Plaintiffs to Claim Punitive Damages in that case.

    This was the recent holding by the Federal Judge in Download Moss_v. American Alternative Insurance Corp. (E.D. Ark. Case No. 05.06cv00010, Opinion Filed November 1, 2006).pdf.  In  Moss, the Court denied a First Party Insurance Company's Motion for Summary Judgment as to both the Policyholders' alleged Claims of First Party Bad Faith under Arkansas law, and the Claims they also alleged for Punitive Damages under Arkansas law.  In Arkansas, the Federal Judge ruled,  First Party Bad Faith is a tort and one of the requirements of proving it is to prove "'dishonest, malicious, or oppressive conduct'" under a test established by the Arkansas Supreme Court.  (Slipsheet op. at page 9.)  In the opinion of the Federal Court in that case, the Policyholders' First Party Bad Faith Claims  should proceed.  (Id.  at 13.)

    The Federal Court reached the holding that the Insurance Company's Motion for Summary Judgment will be denied as against the First Party Bad Faith tort and also with respect to the Punitive Damages Claim in that case, even though Arkansas law requires "clear and convincing evidence" of malice in order to assess Punitive Damages.  The Court held in that case:  "Proof of the elements of the tort of bad faith supports a claim for punitive damages."  (Slipsheet op. at page 13.)  Since the Policyholders in that case prevail on alleging the First Party Bad Faith tort, their Claims for Punitive Damages will also proceed.

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR LEGAL ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

AIG Third Quarter 2006 Results Free From CatClaims

    American International Group (A.I.G.) reports 3Q or Third Quarter 2006 earnings at over two (2) times what they were a year ago.  The credit is given to lack of hurricanes which caused lower Property-Casualty Claims.

    As always, there are other factors skying the income and profits of Insurance Companies this year, in addition to reduced CatClaims.  In today's report regarding A.I.G., credit is also given to Life Insurance sales outside the United States and a new feature appears in these Third Quarter reports:  Retirement Savings Products.  See "Strong A.I.G. Results" byline Bloomberg News (New York Times Nat'l Ed., Friday, November 10, 2006, page C3, col. 3).

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR LEGAL ISSUE, THE JURISDICTION  AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION. 

 

Abatement, Bifurcation, and Stay: Make My Mind Up!

    Abatement is a defense.  An Insurance Company asks a Judge to "abate" a Bad Faith Claim when the Insurance Company is also sued for Breach of Contract or other Claims.  Bifurcation is similar.  A party asks a Judge to "bifurcate" one Claim from other Claims that have been alleged against a Defendant. This can include "separate trials" such as under Federal Rule of Civil Procedure 42.  Bifurcation should refer, and often is used as a shorthand way to refer, to separate Trials.  Stay is not a defense, as such.  "Stay" usually means a stay of Discovery on one or more Claims or Issues while proceeding with Discovery on other Claims or Issues.

    Abatement, Bifurcation, and Stay each have their separate requirements.  Three recent Federal District Court decisions illuminate and confuse these requirements.   These three Federal Cases involve all sorts of Claims including "Third Party Bad Faith" Claims, "First Party Bad Faith" Claims, Statutory Bad Faith Claims, and Common Law Bad Faith Claims.  (No wonder the results seem on the surface to be confusing.)

    In CNL Hotels & Resorts, Inc.,  Download M.D. Fla. Case No. 6.06cv324, Opinion Filed October 16, 2006).pdf, the Federal District Judge was confronted with Claims pleaded by a Policyholder for Insurance Coverage and also with Claims pleaded for Statutory Bad Faith and, apparently, for Common Law Bad Faith.  The Insurance Policies at issue were described as "liability policies" and the Policyholder argued that they provided "indemnification in regard to a then-ongoing securities class action case."  However, the Plaintiff and the Defendants could not agree if this lawsuit was a First Party or a Third Party Bad Faith Case.  Regardless, the Federal Judge in CNL, applying Florida law, granted Abatement of the Bad Faith Claims until the issue of Insurance Coverage is determined.  The Court also said that the Bad Faith Claims "should be bifurcated" and "are hereby STAYED pending resolution of the coverage claim."

    In the case of Jones v. St. Paul Travelers, Download N.D. Cal. Case No. C 06-00717, Opinion Filed October 16, 2006).pdf, the parties involved in a case pending in California apparently agree that it involves "Third Party Bad Faith" Claims, but they disagree on whether Georgia or California law applies.  The Plaintiffs in this Federal Case are judgment creditors of a judgment previously recovered against Watkins Engineers & Constructors, Inc.  The Federal District Judge decided to apply California substantive law to the two alleged Claims in that case.  One Claim was alleged under California Insurance Code § 11580, which allows a judgment creditor to pursue an action to shift to the shoulders of the current Defendant-Insurance Company, the previous Judgment entered against a Policyholder or other Defendant.   Specifically, the previous Defendant was Watkins, a subsidiary of the Insurance Company's Policyholder.  The second Claim is a Bad Faith Claim "based upon defendants' allegedly unreasonable refusal to pay the judgment obtained against Watkins."  The Federal District Court ordered that "in light of the potential prejudice to defendants," the two Claims should be Bifurcated for Trial, but that "there is no need to bifurcate discovery".

    Parenthetically, on the date of this post, Wednesday, November 8, 2006, the Court entered an Order insulating a settling Defendant Insurance Company, Zurich, from various Claims of co-Defendants based on the Federal Court's determination that Zurich's settlement was in Good Faith:  Download Jones_v. St. Paul Travelers November 8, 2006 Order  Granting Zurich's Motion For Good Faith Determination of Settlement.pdf.

    The third of three Federal District Court cases illuminating and confusing these areas of Abatement, Bifurcation, and Stay is the recent decision in Hoskins v. Allstate Property & Casualty Insurance Co., Download (E.D. Ky. Case No. 6.06.389, Opinion Filed November 2, 2006).pdf.  That Federal Case involves alleged First Party Bad Faith Claims, and also alleged Contract Claims.  The Federal Judge granted Bifurcation of these Claims for Trial.  The Court further held in that Federal Case that "in order to avoid any prejudice," Discovery will be "stayed" regarding the Plaintiffs' Bad Faith Claims "until the underlying contract issue has been resolved."

    The "third time" is not just "the charm," because each one of these three Federal Cases is based on its own reasoning.  The last of the three mentioned here,  Hoskins, presents a clear picture of when Bifurcation or Separate Trials is likely to be ordered under Federal Rule 42, and when Discovery is likely to be Stayed on Bad Faith Claims when other Claims dependent on first proving Insurance Coverage are also alleged.

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR LEGAL ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION. 

Reinsurance Premiums Rise on Risk Awareness and Loss Potential ....

                                 .... The Realities of Life After CatClaims.

    Munich Re posted an informative Press Release dated 7 November 2006.  Here is a link to it:  Munich Re Press Release "7 November 2006".   It says a lot.  Some translation is probably required, and not just from German.

    The Munich Re Group is reported to have posted a record profit in 2005, the highest in the Group's 126 year history.  The results for just the Property-Casualty sector of Munich Re for the first 9 months of 2006 are similarly encouraging news, Munich Re reports.  Its Property-Casualty reinsurance premium  "grew slightly" to 11.0 billion Euros, or "10.9bn", and  its combined ratio in  that area (percent of claims paid vs. premiums collected, in basic terms) "came to an excellent 92.1%".   The number of "major losses" from weather- and other nature-caused catastrophes was "below average" and Munich Re was "largely spared major losses" from such CatClaims in the first three quarters or nine months of 2006.

    All is not good news, however, for some.  The current absence of Hurricanes should not cause any loss of memory of the "severe tropical cyclones" that caused major CatClaims in 2004 and 2005, according to this message.  The predicted "loss potential" is what counts for pricing premiums and setting the terms and conditions of Munich Re's reinsurance policies for Property and Casualty Insurers.

    Munich Re's Press Release contains this candid assessment:  "In the light of the general increase in risk awareness and the considerable upward revision of the loss potential, it proved possible to implement the necessary substantial price increases."  In other words, there is a greater awareness of the risk of Hurricanes and other natural disasters because they happen to a lot more people a lot more often, resulting in greater losses, so that reinsurers must, says Munich Re, and will charge "substantial price increases."

    Munich Re's Press Release also informs that "in the USA and Latin America," the focus for renewal of reinsurance for the coming year, other than for Life Insurers, involves oil rigs and other Property risks exposed to CatClaims.

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR LEGAL ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

CatClaims Model Unclear, Rate Request Reduced

    A post here yesterday reviewed rate hike requests in Florida from CatClaims Property Insurers.  Reports were addressed that in a recent hearing a major Property Insurer was questioned hard about its CatClaims Computer Model.  Today the major media report that the same Property Insurer reduced its request for an overall hike to 19.1 percent from its previous request for a 24.2 percent raise in Property Insurance Premiums in Florida.  Kathy Bushouse, "Allstate Scales Back Rate-Hike Request" (South Florida Sun-Sentinel [Ft. Lauderdale], Posted Online Election Day, November 7, 2006).

    Stay tuned to see if the Florida Office of Insurance Regulation approves the lower request.  In the meantime, compare the request to this List of Rate Increase Requests as of Sunday, November 5, 2006 (St. Petersburg Times Online)  showing 10 other previous requests by CatClaims Insurers for rate increases or higher Premiums in Florida, and you can also see my post here yesterday summarizing that list in a Scorecard for easier reference.

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR LEGAL ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

Rate Hikes? What Rate Hikes?

    In parts of the country where rate hike requests are part of everyday life, like Florida, it seems strange to be informed that in other areas of the United States premiums are going down.  Yet, there you have it:  Six lines of Insurance are reported today to have decreasing and not increasing premiums:   Directors and Officers, Commercial General Liability, Worker's Compensation, Term Life, Terrorism Coverage, and in some parts of the United States, Homeowner's Insurance (where there are NO CatClaims).

    In addition, it is reported that although Automobile Insurance Premiums are on the rise, they are rising more slowly than the rate of inflation (neither rate necessarily being good, of course).  These events are reported in a Subscription Required article by Liam Pleven, "Cheaper Insurance Rates Point to Decline in Life, Business Risks" (Wall Street Journal, Monday, November 6, 2006, page A1, col. 5).

    This article certainly seems to be the product of comprehensive reporting.  One thing written in it seems to be a shortcut, however.  Terrorism and CatClaims Underwriting are mentioned together as causing the same Underwriting headache of unpredictability, which is not the case.  Terrorism Risks are by their nature unpredictable.  But Risks such as Hurricanes are totally predictable.  The body of evidence is huge for Underwriters who choose to predict Hurricane and other CatClaims Risks and, if those Underwriters do not like what they see, they can tell their Companies and their Companies can choose whether or not to accept the predicted CatClaims Risk.   As a previous post on Halloween noted here, there does not seem to be the same demonstrated need for a Federal Tax Dollar Backstop for CatClaims Coverage, either, as there is, at least for the near term, for Terrorism Coverage.

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR LEGAL ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

CatClaims Computer Models and Reality in Florida

                           Support Inspected for Requested Hikes
                                   in Florida Property Premiums.

    This year Florida spent $2,700,000 to obtain a "computer catastrophe model" of CatClaims.  The Florida CatClaims Model is being used to inspect requested premium hikes by Property Insurers in Florida.  Florida officials are also continuing to use Property Insurers' computer models, which were the only source of claims predictions data available to Florida and other States until Florida developed its own CatClaims Model this year.   See Tom Zucco, "Insurers' Crystal Ball" (St. Petersburg Times Online, Sunday, November 5, 2006).

    Review of a current "scorecard" on requested hikes in Property Premiums in Florida, shows that out of 10 such requests to date, 3 have been approved totally, another 3 have been reduced, 2 have been denied completely, and the remaining 2  are pending.  (My quick summary includes Citizens Property Homeowners Personal Lines as a separate rate requester from Citizens Homeowners High Risk (Wind-Only), and it also counts second requests.)   See "Looking Inside" (St. Petersburg Times Online, Sunday, November 5, 2006).

    The importance of current data being input into the computer claims models is highlighted by testimony and comments at a recent rate hike hearing in Florida.  The hearing was held to inspect the reasons for a requested increase in premiums for a particular Insurance Company's Homeowner's Policies in Florida. The General Counsel of the Florida Office of Insurance Regulation examined the Senior Actuary of that Company, which is a major Property Insurer.  Recent news reports published after that hearing focus like a laser beam on questions posed by the Florida O.I.R. General Counsel about that Company's computer model.

    After the hearing, the General Counsel observed that in his judgment that Company's computer model itself is "outdated", the computer model is "not approved", and "outdated data" has been input into it.  Testimony from the actuary, and questions and conclusions stated by the General Counsel, are published in the news story by Tom Zucco, "Allstate Rate Hike Request Challenged" (St. Petersburg Times Online, Friday, November 3, 2006).  The particular Property Insurer's request is in the "pending" category at the time of this post.

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR LEGAL ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

Insurers, Businesses and Homeowners Watch Weather, Record Profits

    The Property-Casualty insurance industry's "outstanding year" is noted in recent posts here.  The entire Insurance Industry is expected to have record profits in 2006, earned not only from increased CatClaims premiums but from higher returns on investments -- and the fortunate fact that there have been few if any Hurricane claims or other CatClaims so far in 2006.  The "outstanding year" description comes from one of the major participants.

    Berkshire Hathaway Inc. describes the conditions that have produced these "highly satisfactory" earnings, for example, in its News Release dated Friday, November 3, 2006.  This press release further advises that "clearly, our insurance business has benefited in a major way from the absence of catastrophe losses.  This is due not to managerial brilliance but rather to good luck.  Last year, conversely, we got clobbered by a spate of hurricanes, more of which we will surely see in the future."  Berkshire Hathaway Inc. News Release, November 3, 2006.  This press release is unsigned.  A report attributes it, however, to Mr. Warren Buffett.  Karen Richardson, "Buffett Cites Berkshire's 'Luck' As Net Soars on Hurricane Bets" (Wall Street Journal, Saturday/Sunday November 4-5, 2006, page B3, col. 5) (subscription required).  It is also reported that the Berkshire Hathaway results will be a record for its Insurance Company subsidiaries.

    The Property Casualty Insurers Association annual meeting is scheduled this year for Sunday, November 5 through Wednesday, November 8, 2006 in Seattle, Washington.  A review of PCI's site fails to reveal the agenda, but here is a link to information regarding this annual meeting:  PCIAA.  It is very likely, of course, that the "outstanding results" and "highly satisfactory  earnings" in the CatClaims Insurance Industry will be discussed.  See, for example, the news report by Liam Pleven, "The Week Ahead/Insurance - Property Insurers See Blue Skies" (Wall Street Journal, Saturday/Sunday, November 4-5, 2006, page A2, col. 4)(online subscription required).   Cautions are certain to be announced as well that the lack of catastrophes cannot be expected to continue, i.e., that there will be future CatClaims which must be paid and that the Property-Casualty sector's record profits are "sure to decline next year" to quote verbatim the words of Berkshire Hathaway.

    During this same time, commercial insurance is the victim of a triple whammy:  Commercial insurance is reported to be (1) in such short supply, or (2) so expensive when it is available that many businesses simply cannot afford it, or (3) offering so much less coverage for so much more money, that Gulf Coast businesses either cannot continue or reopen.  For example, see Rebecca Mowbray, "Business Insurance Costs Are Hindering Recovery, Policies Can Now Cost 10 Times as Much" (New Orleans Times Picayune, nola.com, Sunday, October 8, 2006).  This is another catastrophe left behind by the recent Hurricanes, along with the same triple whammy for homeowners in Gulf Coast States whose homes may be located two to three hours' drive, or more, from the Gulf Coast.  One difference is that Commercial Insurance is less regulated than Homeowner's Insurance, if it is regulated at all, so that the whammy can be even more painful for businesses than for homeowners.

    Any reasonable discussion of options for CatClaims Coverage availability should address all these concerns.  As they said in the movie Apollo 13, "Failure is not an option."

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR LEGAL ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

   

Assist the Jury, or It's "Katie, Bar the Gate!"

    News reports about a proffered memory Expert are featured here in an October 28, 2006 post.  Yesterday, the Federal District Judge ruled in that criminal case that a memory Expert would not be allowed to testify.  The Judge agreed with the Federal Government prosecutors who argued that the proposed Expert testimony would not assist the jury in understanding or in determining any of the facts at issue in Download United_States_of_America_v. I. Lewis Libby (D.D.C. Criminal Case No. 05-394, Opinion Filed Thursday, November 2, 2006).pdf.  (This linked and fuzzy posting comes directly from the Federal Court.)

     The Judge referred to a case called Daubert in the conclusion  of his long opinion.  Daubert was decided 10 years ago by the Supreme Court of the United States.  In it, the High Court designated each Federal Trial Judge a "gatekeeper" over the question of whether a jury should hear Expert testimony.  (This is one answer by the Supreme Court to the supposed problem, at one time, of  Experts testifying to too much "junk science".)

    The Federal District Judge wrote yesterday:  "To permit the introduction of the testimony proposed by the defendant would be an abdication of that responsibility and would therefore leave the gate this Court is obligated to protect unguarded and without a sentry.  This the Court cannot do, in light of the mandate given to it by the highest Court in the land."

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR LEGAL ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

Worldwide Catclaims Insurers Combined Ratios Climb

    The upward climb continues.  Previous posts such as October 27, 2006 noted the news that profits for all sectors of Insurance were up greatly, including but not limited to the Catclaims-laden Property-Casualty sector.  This same news continues to be released and predicted by Catclaim Insurers all across the face of our globe.

    Yesterday, Allianz Group posted a press release reflecting its greater operating profit including an increase in the Property-Casualty sector operating profit of nearly 75%, a stated increase in net income of more than 100%, better return on investments, and a steadily improving combined ratio in the Property-Casualty sector which reflects more premiums than Catclaims in broad terms.    Allianz's press release reflects that its good reported results are dependent in large part on the absence of natural catastrophes, or on a low number of Catclaims.    Allianz Group Worldwide Web Site and Press Release of Thursday, November 2, 2006.   

    The lack of Hurricanes in 2006 is a large force for Insurance Industry improvement in profitability across the planet and not just in the United States.  Allianz is the largest Insurance Company in Europe, and one of the largest in the world, based on income earned from premiums.

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR LEGAL ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

Curbside Consults Are Conduits, Cannot Construct Expert Opinions.

    In an opinion released today, Thursday, November 2, 2006, the Florida Supreme Court spoke to Experts who rely on curbside consults with other Experts in reaching their own Opinions.  The issue arose under the Florida Evidence Code and the Court carefully integrated similar requirements found in the Federal Rules of Evidence.  The specific issue was the standard of care in a medical malpractice case, which the Supreme Court addressed in a holding that will reverberate throughout the proffered testimony of Insurance Expert Witnesses and of all Experts, in Download Linn_v. Fossum (Florida Supreme Court Case No. 05-134, Opinion Filed Thursday, November 2, 2006).pdf.

    The issue addressed by the Florida Supreme Court this day, the majority says, is to "decide as a matter of law whether the rules of evidence allow an expert to testify on direct examination that he or she consulted with other experts".  The Expert Witness in that case described her conversations with other physicians as "curbside consults".  The Court holds that this type of a consult is not admissible on direct examination in which the Expert Witness offers her or his Opinions.

    This prohibition on the admissibility on direct examination of the particular Expert's curbside consults or inadmissible hearsay conversations with other Experts, runs afoul of Section 90.704 of the Florida Evidence Code in today's decision.  That provision, reprinted below,  allows an Expert  to  base an opinion on "facts or data" perceived  by the Expert, or  made known to the  Expert, at or before trial.  These "facts or data" do not need to be admissible in evidence, if they are of a type reasonably relied on by Experts in the field.

    "Opinions of other experts who have no first-hand knowledge of the case that are solicited by the testifying expert constitute neither 'facts' nor 'data'," the Supreme Court of Florida held today.  The Court pointedly observed that Section 90.704 "was modeled after Federal Rule of Evidence 703", reprinted below, which was discussed at length in the Court's opinion.  In the end, the Florida High Court's holding concentrates, as it has to concentrate, on Florida law in this Florida case:  "We therefore hold as a matter of law that under the Florida Evidence Code an expert is not permitted to testify on direct examination that the expert relied on consultations with colleagues or other experts in reaching his or her opinion."

    It is readily apparent from the majority opinion in this new Florida Supreme Court case that the majority likely intends for its holding to be applied beyond cases of medical malpractice.  Further, readers can decide for themselves if the provisions quoted by the Florida Supreme Court Justices from Florida Evidence and from Federal Evidence, below, will lead to the same result under the Federal Rules of Evidence:

Florida Statute (adopted long ago as a rule by the Supreme Court of Florida exercising its exclusive rule-making authority) Section 90.704 provides:

    The facts or data upon which an expert bases an opinion or inference may be those perceived by, or made known to, the expert at or before the trial.  If the facts or data are of a type reasonably relied upon by experts in the field to support the opinion expressed, the facts or data need not be admissible in evidence.

Federal Rule of Evidence 703, which the Florida Supreme Court noted was the basis for Florida's Section 90.704, is quoted as follows in footnote 3 of the majority opinion:

    The facts or data in the particular case upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing.  If of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject, the facts or data need not be admissible in evidence in order for the opinion or inference to be admitted.  Facts or data that are otherwise inadmissible shall not be disclosed to the jury by the proponent of the opinion or inference unless the court determines that their probative value in assisting the jury to evaluate the expert's opinion substantially outweighs their prejudicial effect.

REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR LEGAL ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.

Can Florida Common Law Third Party Bad Faith Survive Tender of Limits?

                Yes.  Even if There is No Statutory Third Party Bad
                              Faith Cause of Action Available.

    In Florida, there are two (2) causes of action for alleged Bad Faith in Settlement by a Liability Insurer (or "Third Party" Insurer).  One is Common Law Bad Faith.  The second is a Statutory Cause of Action under the Florida Bad Faith Statute, Section 624.155, enacted in 1990.

     Last Thursday, a unanimous Supreme Court of Florida, with one Justice concurring in the result, responded to the Eleventh Circuit Court of Appeals in a case implicating Common Law Third Party Bad Faith Actions but the Federal Court was asking about Statutory Bad Faith.  To reduce the likely confusion in this matter, the Florida Supreme Court rewrote and rephrased the Eleventh Circuit's questions about Florida "Bad Faith" Law.  The Supreme Court also condensed those questions into one.

    The Supreme Court then went on to answer (its own) reworded single question.  The Court's answer certainly was foreseeable, and so is the result.

    Here is the Court's own announced holding which describes the essential facts behind the question:  "We hold that an insurer's tender of the policy limits to an insured in response to the filing of a civil remedy notice under section 624.155 by the insured, after the initiation of a lawsuit against the insured but before entry of an excess judgment, does not preclude a common law cause of action against the insurer for third-party bad faith."

    The Supreme Court took only a slightly larger amount of words to state the rephrased question and then unanimously answer it "no":

DOES THE TENDERING OF THE POLICY LIMITS BY AN INSURER IN RESPONSE TO THE FILING OF A CIVIL REMEDY NOTICE UNDER SECTION 624.155 FLORIDA STATUTES (2005), BY THE INSURED AFTER THE INITIATION OF A LAWSUIT AGAINST THE INSURED BUT BEFORE ENTRY OF AN EXCESS JUDGMENT[,] PRECLUDE A COMMON LAW BAD FAITH CAUSE OF ACTION BY THE INSURED AND INJURED THIRD PARTIES?

Here is the Supreme Court's complete decision:  Download macola_v. Government Employees Insurance Co. (Fla., Case No. SC05-1021, Opinion Filed Thursday, October 26, 2006).pdf.

    In a nutshell, the procedural background of this case unravels in this pretty simple way.  After an automobile accident,  GEICO's Policyholder, Mr. Frances Quigley, was sued for personal injuries and property damage by Ms. Michelle Macola.  The Policyholder, Mr. Quigley, sent a Civil Remedy Notice of Insurer Violation form to GEICO to cease and desist its alleged Bad Faith for failing to settle the Macola lawsuit against Quigley.  In other words, Mr. Quigley was telling GEICO to settle with Macola.  After GEICO's receipt of its Policyholder's Civil Remedy Notice, GEICO contended that it "cured" its alleged Bad Faith and tendered its policy limit -- sending the $300,000 alleged limit to its Policyholder Quigley and NOT to Ms. Michelle Macola, the Injured Claimant who sued Quigley in the underlying case.  The Policyholder's lawyer specifically stated to GEICO that although the check was received it "did not constitute acceptance.  [The Policyholder's lawyer] did not deposit or cash the check."  (Florida Supreme Court slipsheet opinion at 4.  [Italics added.]

    In Florida, a Civil Remedy Notice of Insurer Violation form is required in order for anyone to pursue a Cause of Action under the Florida Bad Faith Statute.  However, the sending of a Civil Remedy Notice of Insurer Violation form has never meant that the Plaintiff is required to pursue a Statutory Cause of Action.  Moreover, it appears that the Plaintiffs here never filed any claim alleging the Florida Statutory Cause of Action.

 Instead, GEICO was sued in two Common Law Third Party Bad Faith cases, one filed by Quigley and the other filed by Macola.  The two Common Law Third Party Bad Faith cases were consolidated into one Federal case. The Federal District Judge was convinced that there was likely an election of remedies by the Plaintiffs between Common Law Third Party Bad Faith Claims, on the one hand, and Statutory Third Party Bad Faith Claims on the other hand.  Alternatively, the Federal Judge held in favor of GEICO on the ground that if there was no "election of remedies," then there was a satisfaction because the policy limits were tendered.

     The Florida Bad Faith Statute specifically provides however that Bad Faith remedies available in Florida are cumulative and not preemptive.  Further, for decades Policyholders and Injured Claimants and all other Plaintiffs claiming Bad Faith Damages in Florida have been awarded Damages for far more than "policy limits" -- even where the policy limits were actually paid and cashed and deposited and not just 'tendered'.

 The Federal Judge entered judgment in favor of GEICO for the reasons noted above.  The Federal Trial Court's judgment was appealed to the Federal Eleventh Circuit Court of Appeals.  Against this background of Florida Bad Faith Law and with these facts, then, the Federal Eleventh Circuit Court of Appeals certified its questions to the Supreme Court of Florida.  The Supreme Court of Florida rephrased those questions into one, and answered the rephrased question, above.  These particular Florida Third Party Bad Faith cases against GEICO are thus free to go on.

    Note for future cases that the Supreme Court pointed out carefully in footnote 2 that it was not asked, and did not suggest, "whether the facts in this case would give rise to a common law cause of action for third-party bad faith ...."

REMINDER:  THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP.  ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR LEGAL ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.