Goodwin’s Insurance practice counsels nationally recognized insurance carriers on all aspects of high stakes litigation and insurance product regulation, as well as advising both public and private insured entities on a wide variety of insurance coverage matters.
Goodwin attorneys have successfully defended insurers and their affiliates in state and federal courts and in arbitration on such diverse matters as market timing, 9/11 coverage claims, Fair Housing Act cases, and employment and class action litigation.
Representative litigation matters on behalf of insurers include:
“Bad Faith” Claims. We represented an insurance carrier in West Virginia class actions which alleged bad faith and violations of unfair claims handling statutes on behalf of thousands of our client’s policy holders. As a result of our aggressive trial strategy, the client was able to settle the cases this year for less than the costs of litigation. We also represented the same insurer in an action on behalf of 35 plaintiffs who claimed that the insurer violated the West Virginia Unfair Trade Protection Act and committed fraud in connection with settlement of underlying personal injury and wrongful death actions. As the result of our success in persuading the court to grant various in limine motions, including striking the punitive damage claim, the case settled favorably on the eve of trial.
Multidistrict Managed Care RICO Litigation. We represented a managed care company in a complex multidistrict litigation brought by subscribers and physicians against our client and other defendants alleging violations of ERISA and RICO through the use of improper “utilization review criteria” to evaluate whether care was “medically necessary” in accordance with the terms of their health plans. We succeeded in getting the ERISA claims dismissed on behalf of our client, and then defeated plaintiffs’ motion for class certification, resulting in a de minimis settlement with individual plaintiffs.
New York Managed Care Litigation. We represented a managed care company in a health care subscriber class action in New York state court alleging that our client had breached its health plan contracts, violated state consumer fraud laws, and tortiously interfered with the terms of one plaintiff’s health plan by using improper utilization review criteria. The plaintiffs sought certification of a nationwide class of health plan subscribers. We engaged in extensive briefing in opposition to the class certification motion and the trial court ultimately denied certification of a nationwide class but granted certification of a subclass of subscribers on a limited claim. On appeal, we succeeded in defending the denial of the nationwide class and in reversing the subclass certification.
Fair Housing Litigation. We defended an insurer in a discrimination case brought by a group of five fair housing advocacy groups and three individual homeowners in federal court in Washington, D.C. The plaintiffs alleged that our client had violated the Fair Housing Act by discriminating against thousands of minorities in the sale of homeowners’ insurance and sought in excess of $75 million in compensatory and punitive damages, and threatened to impose substantial reputational harm on the insurer. The plaintiffs had multiple theories of liability, a history of success against other insurance companies and aggressive and experienced litigation counsel. After prevailing on numerous discovery motions, and retaining and preparing expert witnesses for trial, we were approached by the plaintiffs with a strong interest in settlement. After mediation, we entered into a highly favorable settlement that disposed of all claims and on terms more favorable then similarly situated defendants in previous related litigation.
Dispute Concerning Sale of Insurance Lines. On behalf of a large insurer, we conducted an internal investigation and prepared a risk assessment regarding certain claims made by another insurance company arising from its purchase of a subsidiary of our client. The purchaser alleged that our client had breached certain representations and warranties under a purchase agreement and had also breached numerous obligations under a related distribution agreement. We conducted an intensive factual investigation of the matter, including a substantial review of numerous documents and detailed interviews with over a dozen of our client’s former and current senior executives, as well as interviews of its outside counsel and investment bankers. We then prepared a detailed legal assessment of the strengths and weaknesses of the numerous claims made by the purchaser based on the results of that factual investigation. Ultimately, our client was able to settle the purchaser’s claims on very favorable terms, and thereby to avoid the risks of any future litigation over these claims.
Market-Timing Litigation. A well-known market timer sued our insurance company client in what became one of the first actions arising in connection with market-timing and late-trading of mutual funds. The suit alleged both breach of a life insurance contract and fraud claims relating to our client’s attempts to restrict the plaintiff’s market timing activities. We first succeeded in obtaining the dismissal of fraud counts against the insurer and then litigated the remaining contract claims. In a detailed 50-page decision, the trial court ultimately concluded that our client had not breached the life insurance contract with the plaintiff, and in the process found in our client’s favor on every issue the court reached. The plaintiff appealed the decision to the Third Circuit, which affirmed the trial court’s decision.
We are currently handling another market timing dispute that arose between our client and the same plaintiff, also in connection with his market timing activities. This time, we represented the client in filing a preemptory action against the market timer which sought declaratory relief that our client did not violate his contractual rights by restricting his ability to market time. The defendant counter-claimed against our client, alleging breach of contract and violation of the Electronic Signatures in Global and National Commerce, or “E-SIGN,” Act. We ultimately succeeded in having the E-SIGN count dismissed and also persuaded the district court to grant partial summary judgment and hold that the defendant was collaterally estopped from re-litigating a number of issues from the first litigation.
Florida PIP Litigation. A class of Florida medical providers sued numerous insurance carriers, including our client, in federal court in Florida. The class plaintiffs alleged that the insurers’ payment of PPO-discounted fees to medical providers pursuant to personal injury protection provisions of Florida automobile insurance policies violated RICO and Florida law. After moving to compel arbitration, and two successive interlocutory appeals to the Eleventh Circuit, the parties agreed to mediate the class plaintiffs’ claims. We ultimately reached a settlement that required our client to pay only a small fraction of the amount at issue, with other defendants settling on less favorable terms.
Pennsylvania Property Insurance Class Action Litigation. We successfully defended an insurance carrier in class action litigation brought in Pennsylvania state court by a putative class of homeowners which alleged that the insurer had utilized improper criteria in handling first-party property damage claims. We were able to secure a dismissal for the insurer, early in the litigation, by demonstrating to plaintiffs’ counsel that or client’s policy language was consistent with the practices that it had implemented.
9/11 Insurance Litigation. We successfully defended an insurer in Maryland state court against a suit stemming from the 9/11 attacks. This was a million-dollar claim brought by the business partners of a man who perished in the attack on the Pentagon, claiming that the insurer had issued two separate key-man life insurance policies based on the alleged pendency of a renewal application and the supposed non-expiration of the then-current policy. There was significant adverse publicity risk associated with the case – plaintiffs’ counsel was quoted in the national press to the effect that “when the good lord calls your number, you expect the insurance company to pay up.” After discovery, we persuaded the court that there was no second policy and obtained summary judgment in favor of the client on all counts.
Insurance & Annuity Products
On the regulatory side, Goodwin has extensive experience representing life insurance and annuity product manufacturers, distributors and related service providers. We advise clients on product design, distribution and administration issues for a wide variety of annuity and life insurance products, including variable annuities, fixed annuities, indexed annuities, market value adjusted annuities, fixed and variable life insurance contracts, including corporate owned and bank owned life insurance policies (COLI and BOLI). We advise clients on the legal issues related to product design and innovation, including securities law and insurance law issues. We also advise clients on distribution requirements and practices under the securities and insurance laws, as well as FINRA distribution requirements. We assist clients in responding to compliance matters and regulatory examinations. We frequently represent clients before a wide variety of regulators, including the SEC’s Office of Insurance Products, FINRA and numerous state departments of insurance.
Representative matters in this area include:
- Serving as primary securities counsel for two top 10 manufacturers of variable annuity and variable life insurance contracts. We advise the companies on product development, including the development of a variety of annuity living benefits. We also advise the companies on registered and unregistered group annuity contracts and COLI/BOLI contracts.
- Representing a top 20 manufacturer of variable annuity and variable life insurance contracts in resolving expense allocation issues between the insurance company and the underlying funds its utilizes.
- Representing a major reinsurer in efforts to obtain certain regulatory relief from the SEC related to the administration of reinsured variable annuity contracts.
- Representing broker-dealers regarding ongoing obligations for the sale of variable contracts.
- Serving as counsel to funds (or their independent directors) that serve as the underlying investment options for variable life and annuity contracts.
- Representing a Fortune 100 financial services company in the defense of a regulatory investigation conducted by the SEC’s Office of Compliance Inspections and Examinations relating to customer disclosures of payments to intermediaries for variable annuity sales. For the same client, we are currently handling an investigation being conducted by the New York State Attorney General’s Office on disclosures to 401(k) plan participants.
Directors’ and Officers’ Insurance and Risk Management
In addition to representing insurance carriers, we also counsel insured entities, their management and boards of directors in a wide variety of industries on insurance coverage matters. In this area we have advised insureds on:
- Selection of appropriate directors and officers, professional liability and other management liability insurance.
- Securing competitive renewal terms and premiums on existing insurance coverage.
- Purchasing appropriate coverage or extended claim reporting options in the event of corporate transactions such as acquisitions, mergers or IPOs.
- Performing insurance and litigation due diligence on acquisition or merger targets.
When a claim does arise, we work closely with the insured and its carrier to report, facilitate and resolve coverage issues.
In addition to our litigation and insurance counseling expertise, we also provide clients with proactive risk management advice, including the creation and implementation of appropriate internal procedures and other best practices to mitigate risk. These procedures have included conflict of interest, insider trading, document retention and data privacy policies, as well as board presentations and employee training sessions on various risk management and corporate governance matters.