Reinsurance claims harder to collect

June 10, 2011

The Daily Business Review is reporting that the eathquake and tsunami in Japan and other catastrophic events around the world could make reinsurance harder to collect if a hurricane hits Florida. Credit rating agency Fitch reported that natural disasters around the world have raised questions about the capital adequacy of reinsurance companies, which bear much of Florida's insured risk for windstorm damage. Reinsurance companies could try to offset the cost of surging disaster claims abroad by raising premiums, but their pricing power may be limited. Some leaders of reinsurance companies have been alluding to the possibility of double-digit pricing improvement on U.S. wind exposures for which many treaty renewals will be renegotiated. But expectations of dramatically improved pricing conditions in the reinsurance market may be overstated. Michael H. Braun, president and chief executive officer of 21st Century Holding Co. which insures homes in South Florida and other markets has stated that there is more than enough underwriting capacity in the market for reinsurance. He states that with the earthquake in Japan and other events worldwide, reinsurers have become more firm on their pricing. However, Braun also stated his belief is that pricing will remain flat. If you would like to comment on this story or write to me, you may reach me via LinkedIn at 

http://www.linkedin.com/in/michelleoterovaldes  or via email at miamipandi@comcast.net.

June 10, 2011

The Daily Business Review is reporting that the eathquake and tsunami in Japan and other catastrophic events around the world could make reinsurance harder to collect if a hurricane hits Florida. Credit rating agency Fitch reported that natural disasters around the world have raised questions about the capital adequacy of reinsurance companies, which bear much of Florida's insured risk for windstorm damage. Reinsurance companies could try to offset the cost of surging disaster claims abroad by raising premiums, but their pricing power may be limited. Some leaders of reinsurance companies have been alluding to the possibility of double-digit pricing improvement on U.S. wind exposures for which many treaty renewals will be renegotiated. But expectations of dramatically improved pricing conditions in the reinsurance market may be overstated. Michael H. Braun, president and chief executive officer of 21st Century Holding Co. which insures homes in South Florida and other markets has stated that there is more than enough underwriting capacity in the market for reinsurance. He states that with the earthquake in Japan and other events worldwide, reinsurers have become more firm on their pricing. However, Braun also stated his belief is that pricing will remain flat. If you would like to comment on this story or write to me, you may reach me via LinkedIn at 

http://www.linkedin.com/in/michelleoterovaldes  or via email at miamipandi@comcast.net.

New arbitration case -- be careful in drafting arbitration clauses in Florida

June 08, 2011

BGT GROUP, INC. v. TRADEWINDS ENGINE SERVICES, LLC, 36 Fla. L. Weekly D1207a (Fla. 4th DCA Jun. 8, 2011). Contracts -- Sales -- Arbitration -- No error in denying motion to compel arbitration of dispute between seller and purchaser where arbitration clause was contained in seller's “Terms and Conditions,” which were referenced in quotation and purchase order, but not specifically described in or attached to those documents -- Reasonable view is that seller, as drafter of documents, did not intend to incorporate any “terms and conditions” where it did not provide specific description of them or attach them to quote and purchase order . If you would like a copy of this decision, please feel free to reach me at miamipandi@comcast.net or through LinkedIn--my public profile can be found at 

http://www.linkedin.com/in/michelleoterovaldes .

Insured Loses on "Sole Negligence" Language

June 01, 2011

In Barden Mississippi Gaming LLC v. Great Northern Ins. Co., 2011 WL 1262264 (5th Cir. Apr. 6, 2011), the U.S. Court of Appeals for the Fifth Circuit held that an insurer did not have a duty to indemnify an additional insured because the policy provided coverage only for the named insured's "sole negligence" and the named insured was only found 50% negligent in the underlying action. In a previous appeal in the same matter, the Court held that the insurer had a duty to defend because it was possible that the additional insured could be found 100% liable. The court, however, also concluded that the question of indemnification was premature as the underlying case had not yet reached a verdict. Ultimately, the jury in the underlying action found the additional insured 50% negligent and the insured 50% negligent. As a result, the Fifth Circuit ruled that the insurer was not obligated to indemnify the additional insured for the judgment in the underlying case because the additional insured was not "solely negligent."

Be wary of "solely negligent" language in either an insurance policy or any other contract. You could be giving away valuable rights in agreeing to be paid or be indemnified with such language. If you would like a copy of this decision or have any questions regarding this decision, please feel free to contact me via my profile on LinkedIn at 

http://www.linkedin.com/in/michelleoterovaldes or miamipandi@comcast.net.

U.S. District Court Jury Finds Cruise Line Not Responsible for Fall

May 31, 2011

In Groves v. Royal Caribbean Cruise Ltd., Case No. 1:09-cv-20800-EGT, a jury exonerated a cruise line for a passenger's knee injuries from a 2008 slip and fall. Ms. Groves was reportedly backing into a wait station in a dining room on a Royal Caribbean Cruises ship when she slipped and fell. She suffered a torn meniscus and a subchondral trabecular fracture and underwent 2 surgeries. Ms. Groves claimed waiters often spilled water in the area but failed to timely clean it. The defense argued that Ms. Groves could not prove how long the liquid was on the floor or where it came from. The defense also argued that Ms. Groves failed to use due care by walking backwards in high heels after she had consumed a couple of alcoholic beverages. Should you wish more information on this case, please feel free to contact me at 

http://www.linkedin.com/in/michelleoterovaldes or miamipandi@comcast.net.