Abstracts of Significant Cases Bearing on the Regulation of Insurance - NAIC
- 2005 - JIR / NAIC - Abstracts of Significant Cases Bearing on the Regulation of Insurance - 5p
- The Third Circuit Court of Appeals reviewed a “vanishing premium” case in Huu Nam Tran v. Metropolitan Life Insurance Co., 408 F.3d 130 (3d Cir. Ct. App., May 25, 2005). Tran alleged that he had been misled by a MetLife agent who indicated that he would only have to pay premiums on his life insurance policy for ten years. The policy did not so state, but Tran could not read English. The District Court for the Western District of Pennsylvania, the court below, held that Tran had a duty to read the policy or have it read to him and that the policy language was clear and unambiguous. The Court of Appeals said that no such duty existed in Pennsylvania law and also noted that the policy language was subject to interpretation, so even if Tran had read it, he might not have understood that his premiums would not “vanish.” The Appeals Court ruled that genuine issues of fact existed in this case, so summary judgment for the insurer was not appropriate. This case is more appropriate for resolution by a jury than by a judge.
- 2006 09 - JIR / NAIC - Abstracts of Significant Cases Bearing on the Regulation of Insurance -
- 2007 - JIR / NAIC - Abstracts of Significant Cases Bearing on the Regulation of Insurance
- 2008 - JIR / NAIC - Abstracts of Significant Cases Bearing on the Regulation of Insurance
- 2009 - JIR / NAIC - Abstracts of Significant Cases Bearing on the Regulation of Insurance
- 2010 - JIR / NAIC - Abstracts of Significant Cases Bearing on the Regulation of Insurance
- 2011 - JIR / NAIC - Abstracts of Significant Cases Bearing on the Regulation of Insurance
- Plant v. Northwestern Mut. Life Ins. Co., Case No. 08-CV-11988 - (Wis. Cir. Milw. March 7, 2011)
- In this class action bench trial, the Wisconsin Circuit Court, Milwaukee County,
found the defendant breached its contracts with class members holding annuity
policies in 1985, when Northwestern Mutual (NWM) changed its method of paying dividends.
- 2015 -
- In Re Penn Treaty Network America Ins. Co., 119 A.3d 313
- Cases in Which the NAIC Filed as Amicus Curiae
- MetLife, Inc. v. Financial Stability Oversight Council, No. 1:15-cv-45 (D. D.C. NAIC brief filed June 26, 2015) The NAIC submitted an amicus brief in the U.S. District Court for the District of Columbia in the case of MetLife, Inc. v. Financial Stability Oversight Council. The NAIC filed this brief at the request of the California DOI and in support of MetLife’s motion for summary judgment. The case involves MetLife’s challenge to the Financial Stability Oversight Council (FSOC) in its designation of MetLife as a systemically important financial institution. Pursuant to the federal DoddFrank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), the FSOC was required to consider the degree to which MetLife is already regulated by one or more primary financial regulatory agencies before making a designation. The brief asserted that the FSOC largely ignored or discounted the state-based system that regulates MetLife, and therefore acted in an arbitrary and capricious manner in making the designation. Specifically, the brief described the full range of regulatory tools available to state regulators at the individual entity and group level and the failure of the FSOC to assess the risk of asset liquidation against (Pa. 2015) those tools, which include early warning through risk-based capital requirements and stays on surrender activity. The brief also described the deliberate, incremental process that applies to troubled companies regulated by state insurance commissioners and recounted the FSOC’s failure to assess the risk of a hypothetical MetLife liquidation against this process.
- 2016 -
- MetLife, Inc. v. Financial Stability Oversight Council, No. 16-5086
(D.C. Cir. 2016)
The NAIC submitted an amicus brief in the United States Court of Appeals
for the District of Columbia in the case of MetLife, Inc. v. Financial Stability
Oversight Council on August 22, 2016. The NAIC filed this brief in support of
MetLife, which had prevailed in its arguments at the District Court level. The case
involves MetLife’s challenge to the Financial Stability Oversight Council (FSOC)
in its designation of MetLife as a systemically important financial institution.
Pursuant to the federal Dodd-Frank Wall Street Reform and Consumer Protection
Act of 2010, the FSOC was required to consider the degree to which MetLife is
already regulated by one or more primary financial regulatory agencies before
making a designation.
The brief asserted that the FSOC largely ignored or discounted the state-based
system that regulates MetLife and, therefore, acted in an arbitrary and capricious
manner in making the designation. Specifically, the brief described the full range
of regulatory tools available to state regulators at the individual entity and group
level and the failure of the FSOC to assess the risk of asset liquidation against
those tools, which include early warning through risk-based capital requirements
and stays on surrender activity. The brief also described the deliberate, incremental
process that applies to troubled companies regulated by state insurance
commissioners and recounted the FSOC’s failure to assess the risk of a
hypothetical MetLife liquidation against this process.
- 2019 -
- Independent Ins. Agents and Brokers of New York, Inc. v. New York
State Dep’t of Fin. Servs., 65 Msc.3d 562 (Sup. Ct. Albany Co. July
31, 2019)
Independent Insurance Agents and Brokers of New York, Incorporated
(“Plaintiff”), representing insurance agents, brokers, and financial advisors
challenged the New York State Department of Financial Services’ (“DFS”)
Amendment to NYCRR 224.0 et seq. The Amendment, also known as the
Suitability and Best Interests in Life Insurance and Annuity Transactions, was
issued by DFS on July 17, 2018. It adopted a uniform standard of care which must
be met by agents and brokers, requiring them to act in the best interests of their
client. Plaintiff offered many arguments including that the Amendment must be
annulled for because the DFS exceeded its authority and that the regulation conflicts
with the governing statutory scheme. DFS argued that it has broad supervisory
power over the banking, insurance, and financial services. DFS further argued that
the Amendment “is based on the principle that agents and brokers making
recommendations about complex insurance transactions are more informed about
market intricacies and potential impacts, and thus should be obligated to provide
guidance in the best interests of the customer when making a recommendation.”
The trial court agreed with DFS and held that the Amendment is a proper
exercise of its regulatory power and that DFS complied with the State
Administrative Procedure Act in adopting the Amendment. The court held that the
insurance statues provide DFS with the authority to ensure “the continued safety
and soundness of New York’s banking, insurance, and financial services industries,
as well as the prudent conduct of the providers of financial products and services,
through responsible regulation and supervision.”