Justia Insurance Law Opinion Summaries

Public Act 97-695 (eff. July 1, 2012), amended section 10 of the State Employees Group Insurance Act of 1971, 5 ILCS 375/10, by eliminating the statutory standards for the state’s contributions to health insurance premiums for members of three of the state’s retirement systems. The amendment requires the Director of Central Management Services to determine annually the amount of the health insurance premiums that will be charged to the state and to retired public employees. It is not limited to those who become annuitants or survivors on or after the statute’s effective date. The amendment was challenged by members of the affected entities: State Employees’ Retirement System (SERS), State Universities Retirement System (SURS), and Teachers’ Retirement System (TRS), as violation the pension protection clause, the contracts clause, and the separation of powers clause of the Illinois Constitution. Certain plaintiffs added common-law claims based on contract and promissory estoppel. The Illinois Supreme Court, on direct review, reversed dismissal, stating that health insurance subsidies are constitutionally protected by the pension protection clause and rejecting an argument that only the retirement annuity itself is covered. View "Kanerva v. Weems" on Justia Law

The South Carolina Supreme Court answered certified two questions from the U.S. District Court for the District of South Carolina. The case concerned supplemental health insurance policies, which differ from ordinary health insurance policies in both purpose and operation. The questions were: (1) whether the definition of "actual charges" contained within S.C. Code Ann. 38-71-242 be applied to insurance contracts executed prior to the statute's effective date; and (2) whether the South Carolina Department of Insurance could mandate the application of "actual charges" to policies already inexistence on the statute's effective dates by prohibiting an insurance company from paying claims absent the application of that definition. The South Carolina Supreme Court answered both questions "no." View "Kirven v. Central States" on Justia Law

Department of Health and Human Services (HHS) regulations implementing the 2010 Patient Protection and Affordable Care Act (ACA) require that employers’ group health plans furnish preventive care and screenings for women without cost sharing requirements, 42 U.S.C. 300gg–13(a)(4). Nonexempt employers must provide coverage for 20 FDA-approved contraceptive methods, including four that may have the effect of preventing a fertilized egg from developing. Religious employers, such as churches, are exempt from the contraceptive mandate. HHS has effectively exempted religious nonprofit organizations; an insurer must exclude contraceptive coverage from such an employer’s plan and provide participants with separate payments for contraceptive services. Closely held for-profit corporations sought an injunction under the 1993 Religious Freedom Restoration Act (RFRA), which prohibits the government from substantially burdening a person’s exercise of religion even by a rule of general applicability unless it demonstrates that imposing the burden is the least restrictive means of furthering a compelling governmental interest, 42 U.S.C. 2000bb–1(a), (b). As amended by the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA), RFRA covers “any exercise of religion, whether or not compelled by, or central to, a system of religious belief.” The Third Circuit held that a for-profit corporation could not “engage in religious exercise” under RFRA and that the mandate imposed no requirements on corporate owners in their personal capacity. The Tenth Circuit held that the businesses are “persons” under RFRA; that the contraceptive mandate substantially burdened their religious exercise; and that HHS had not demonstrated that the mandate was the “least restrictive means” of furthering a compelling governmental interest.The Supreme Court ruled in favor of the businesses, holding that RFRA applies to regulations that govern the activities of closely held for-profit corporations. The Court declined to “leave merchants with a difficult choice” of giving up the right to seek judicial protection of their religious liberty or forgoing the benefits of operating as corporations. Nothing in RFRA suggests intent to depart from the Dictionary Act definition of “person,” which includes corporations, 1 U.S.C.1; no definition of “person” includes natural persons and nonprofit corporations, but excludes for-profit corporations. “Any suggestion that for-profit corporations are incapable of exercising religion because their purpose is simply to make money flies in the face of modern corporate law.” The Court rejected arguments based on the difficulty of ascertaining the “beliefs” of large, publicly traded corporations and that the mandate itself requires only insurance coverage. If the plaintiff companies refuse to provide contraceptive coverage, they face severe economic consequences; the government failed to show that the contraceptive mandate is the least restrictive means of furthering a compelling interest in guaranteeing cost-free access to the four challenged contraceptive methods. The government could assume the cost of providing the four contraceptives or could extend the accommodation already established for religious nonprofit organizations. The Court noted that its decision concerns only the contraceptive mandate, not all insurance-coverage mandates, e.g., for vaccinations or blood transfusions. View "Burwell v. Hobby Lobby Stores, Inc." on Justia Law

Plaintiffs are non-profit entities affiliated with the Catholic Church who have religious objections to certain preventive care standards under the Patient Protection and Affordable Care Act, 42 U.S.C. 300gg-13, particularly the requirement that their employer-based health insurance plans cover all FDA-approved contraception, sterilization methods, and counseling. All are eligible for either an exemption from the requirement or an accommodation to the requirement, through which the entities will not pay for the contraceptive products and services and the coverage will be independently administered by an insurance issuer or third-party administrator. Nonetheless, they alleged that the contraceptive-coverage requirement violated the Religious Freedom Restoration Act; the Free Speech, Free Exercise, and Establishment Clauses of the First Amendment; and the Administrative Procedure Act. Two district courts denied the appellants’ motions for a preliminary injunction. The Sixth Circuit affirmed, finding that the plaintiffs did not demonstrate a strong likelihood of success on the merits of any of their properly raised claims; because they did not demonstrate a strong likelihood of success on the merits of their claims, they also do not demonstrate that they will suffer irreparable injury without the injunction. View "MI Catholic Conference v. Sebelius" on Justia Law

Lambert Law Firm, LLC ("Lambert"), petitions the Supreme Court for a writ of mandamus to direct the Circuit Court to set aside an order awarding respondent Shawn Brechbill a portion of certain funds filed with the Circuit Court clerk. Brechbill, was represented by the law firm of Morris, Conchin & King. He sued State Farm Fire and Casualty Company seeking damages for breach of contract and bad-faith failure to pay an insurance claim. The law firm filed the initial complaint, prepared various pleadings, conducted discovery, engaged experts, and filed a response to a motion for a summary judgment filed by State Farm. Later, the law firm withdrew its representation of Brechbill. The trial court held a hearing and issued an order stating that the law firm would have a lien against any settlement or judgment that became payable to Brechbill arising from his claims against State Farm. Ultimately, the law firm's interest in the lien was assigned to Gary Conchin, a partner in the law firm. Brechbill hired Lambert to continue the litigation. Brechbill ultimately received a judgment against State Farm on his breach-of-contract and bad-faith claims. At some point after the judgment was entered, Lambert withdrew from further representation of Brechbill, and the trial court entered an order granting Lambert a lien on any recovery Brechbill might be awarded. State Farm elected to appeal the verdict on the bad-faith claim, but paid one-half of the amount of the verdict in satisfaction of the verdict on the breach-of-contract claim to the circuit court clerk. While State Farm's appeal was pending, both Conchin and Lambert moved to "condemn" the funds held by the circuit clerk. Brechbill also moved the trial court to release the funds to him. Upon review of the competing claims for the money, the Supreme Court concluded that the trial court clearly acted within its discretion in refusing, at the time of the hearing, to determine the amount of the liens at issue. "However, given the mandatory nature of section 34-3-61, the priority of the two liens in this case, and the limited funds to which the liens attached, the trial court must first determine the amount of the fees owed to ensure that any preliminary disbursement would not divest the fund of money in which, by law, another party would have a priority in interest." The Court held that Lambert demonstrated a clear legal right to relief, and therefore directed the trial court to vacate its May 30, 2013, order and to hold further proceedings. View "Brechbill v. State Farm Fire & Casualty Co." on Justia Law

Respondent-claimant, Ben Snell was employed by petitioner-employer Kentucky Fried Chicken of McAlester. He alleged that while at work he slipped and fell while carrying a tray of chicken weighing approximately 40 to 50 pounds. The trial court awarded claimant temporary total disability (TTD) and reasonable and necessary medical treatment for injuries to his neck, the second finger of his right hand, and aggravation of pre-existing conditions to his left knee and low back. All other issues were reserved. On appeal, the Court of Civil Appeals (COCA) sustained the award. In its opinion, COCA ruled the standard of review in this case was the "any competent evidence" standard because of a holding in a previous opinion by the same division, "Westoak Industries, Inc. v. DeLeon," which held 85 O.S. 2011 sec. 340(D)(4), setting out "against the clear weight of the evidence" as the appellate standard of review in workers' compensation cases, constituted a violation of the separation of powers provision of the Oklahoma Constitution. Westoak was completely at odds with another COCA opinion, "Harvey v. Auto Plus of Woodward." "Harvey" held section 340(D)(4) was not unconstitutional as a separation of powers violation. The Supreme Court granted certiorari to consider the issue as one of first impression since certiorari was not sought in either of the previous cases. The Court concluded that there was no constitutional separation of powers prohibition in in the Okla.Const., art IV, section 1 against the Legislature's adoption of the "against the clear weight of the evidence" standard of review in 85 O.S. 2011 sec. 340(D)(4). COCA's opinion was therefore vacated. Because "Westoak" and "Harvey" were totally inconsistent with the views expressed in this opinion, they were both specifically overruled. View "Kentucky Fried Chicken of McAlester v. Snell" on Justia Law

RB Entertainment is one of a complicated web of at least seventeen different companies that Appellant Jeffrey Cohen allegedly owns and controls. Central to this appeal was one issue: whether the delinquency proceedings for Indemnity Insurance Corporation, RRG violated the constitutional due process rights of Cohen or Co-Appellant RB Entertainment Ventures. Co-Appellant IDG Companies, LLC (Indemnity's managing general agent), was also one of the Cohen-affiliated entities. After uncovering evidence that Cohen had committed fraud in his capacity as Indemnity's CEO and that Indemnity might be insolvent, the Delaware Insurance Commissioner petitioned the Court of Chancery for a seizure order. The Delaware Uniform Insurers Liquidation Act. Based on the detailed allegations and supporting evidence presented by the Commissioner, the Court of Chancery granted that seizure order, which, among other things, prohibited anyone with notice of the proceedings from transacting the business of Indemnity, selling or destroying Indemnity’s assets, or asserting claims against Indemnity in other venues without permission from the Commissioner. The seizure order also prohibited anyone with notice of the proceedings from interfering with the Commissioner in the discharge of her duties. Cohen, who founded Indemnity and had served as its President, Chairman, and CEO, resigned from Indemnity's board during the ensuing investigation and the board removed him from his managerial positions. After his resignation, Cohen interfered with the Commissioner's efforts to operate Indemnity in various ways. The Commissioner returned to the Court of Chancery several times, first seeking an amendment to the seizure order to address Cohen's behavior and then seeking sanctions against him. The Court of Chancery entered a series of orders that increased the restrictions on Cohen's behavior and imposed stiffer sanctions upon him. Cohen argued that he was denied due process at several junctures during the Court of Chancery proceedings. Because Cohen's claims alleged violations of his right to due process, the focus of the Supreme Court's opinion was on whether Cohen was given notice of the allegations against him and a fair opportunity to present his side of the dispute. Having carefully examined the record in this case, the Court concluded that he was given that opportunity: no violation of Cohen's or the affiliated entities' due process rights occurred. View "Cohen, et al. v. State of Delaware, et al." on Justia Law

Plaintiff filed suit against APIC, a nondomiciliary risk retention group, under New York's direct action statute, N.Y. Ins. Law 3420, to recover an unsatisfied state court judgment that had been entered against APIC's insured. The insured was a chiropractor that plaintiff had sought treatment from and who had pled guilty to third-degree assault for his inappropriate touching of plaintiff. At issue was whether the Liability Risk Retention Act of 1986, 15 U.S.C. 3901 et seq., preempted the application of section 3420(a)(2) to APIC, which was domiciled in Arizona, but issued insurance policies in New York. The court held that any construction of New York law that would impose section 3420's direct action requirements on foreign risk retention groups was preempted by section 3902(a)(1) of the LRRA. View "Wadsworth v. Allied Professionals Ins." on Justia Law

Appellant Dorris Green, representing his child who was injured while a passenger in his mother's automobile, contended that as a matter of public policy the courts of South Carolina should refuse to recognize the validity of a family member exclusion in a Florida car insurance policy. Further, he contended that the circuit court erred in finding there was no uninsured motorist coverage for his minor child under his Florida policy. The Supreme Court agreed with the circuit court that enforcement of this exclusion, valid under Florida law, did not offend South Carolina public policy, and that there was no underinsured coverage for father's minor child under the father's policy. The Court therefore affirmed the grant of summary judgment to the insurance company. View "Green v. USAA" on Justia Law

Petitioner Tulsa Stockyards, Inc. challenged the constitutionality of the CompSource Mutual Insurance Company Act (85 O.S.Supp.2013, secs. 375.1 et seq.). The Act required CompSource Oklahoma be restructured to do business as a domestic mutual insurer without capital stock or shares under the name of CompSource Mutual Insurance Company effective January 1, 2015. Petitioner contended that CompSource was a state agency and its money and other assets, valued at approximately $265,000,000.00, were assets of the people of Oklahoma. Converting CompSource from a department of the State to an independent, licensed mutual insurance company without provision for the State to retain ownership of CompSource's assets, petitioner argued, was contrary to the prohibition against gifts of public money, the prohibition against interference with contracts, and the prohibition against money being paid out of the State Treasury except by appropriation. Upon review of the matter, the Supreme Court concluded that CompSource's money and other assets were held in trust for the benefit of the employers and employees protected by the insurance issued by CompSource, the Court's "Moran" opinion remained sound law, and the Oklahoma Constitution did not prohibit the Legislature from placing CompSource's money and other assets in trust with a domestic mutual insurer. View "Tulsa Stockyards, Inc. v. Clark" on Justia Law