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Insurance: Dispute Resolution: Insurer


Practice Area Overview

Contributed by Susan A. Stone and Alan J. Sorkowitz, Sidley Austin LLP

Gone forever are the days when “insurance work” was the unfashionable province of small litigation firms, often servicing a single carrier and charging fees substantially lower than their “commercial litigation” counterparts. Today’s insurance dispute resolution sector has become exponentially more complex. In this, it simply has reflected the business of insurance itself, which has been forced to adapt to an increasingly complex and dangerous world. Risks are more numerous and severe; government regulation is more exacting; society is more litigious. As a result, the systemic economic and legal pressures on the insurance industry are greater, and they require a higher level of counsel. Not surprisingly, the world’s largest law firms have come forward to fill the need. The Chambers USA rankings announced on this page reflect this; the overwhelming majority of the highest-ranked firms in the Insurance: Dispute Resolution: Insurer practice area are drawn from the highest levels of the so-called “Biglaw” firms.

Insurers engage these firms to litigate a wide variety of disputes. This Overview discusses some of the types of disputes that are keeping the elite firms busy at this time and some of the trends within those categories.

Coverage litigation: Disputes between policyholders and insurers over the obligation to provide indemnity against loss (and defense against claims in the case of liability insurance) have always arisen in great numbers. In the “new insurance industry,” however, the stakes have been elevated and the magnitude of the cases has exploded.

One traditional source of coverage work has been the waves of claims that arise from major natural disasters. The 2014 “polar vortex” freeze in the U.S. and Canada and the 2015 Nepali earthquakes and avalanches tragically show that this source of disputes will always be with us.

Indeed, the concept of global Climate Change presents challenges to the industry that give rise to regulatory, coverage, policy design, and risk management issues, all of which require sound legal counsel. As the climate changes and government and industry respond, insurers must adapt. This means new forms of coverage, new risk management initiatives, and increased oversight of the industry’s response to extreme weather events. The whole concept of a changing climate shakes up traditional notions; for example, policyholders become more vulnerable to damage to their property from extreme weather events but, at the same time, at least arguably bear a duty to be more prepared than in the past.

At the same time, the industry continues to be plagued by claims arising from mass torts. This is the most fertile ground for litigation in the entire legal landscape, as thousands upon thousands of claims are filed by putative victims and against policyholders; coverage disputes arise between policyholders and their insurers and, when claims are ultimately paid or settled, insurers seek indemnity from unwilling reinsurers. Most Americans are already familiar with the waves of claims arising from exposure to asbestos (currently in its “Third Wave” according to experts), environmental pollution, harmful drugs and defective medical devices. What is less well-known is that new mass tort frontiers are developing all the time, with the ones garnering media attention in 2014-15 including:

• Head trauma due to sports participation in schools;

• Inhalation of so-called “nanoparticles”; and

• Defective automobile airbags.

Regulatory investigations and litigation: At the same time as mass tort liabilities threatened their coffers, insurers came under increased scrutiny from government on several fronts in 2014-15, creating opportunities for legal counsel at every step.

The vulnerability of insurers to the factors giving rise to the 2008 Financial Crisis raised concerns about the solvency of the industry, opening a new chapter in the regulatory environment. As an example, one sensitive issue that arose is the management of risk assumed through non-insurance activities within insurance holding company structures. It became clear that state insurance departments needed to be able to assess the financial condition of insurance groups as a whole. Thus, in 2014-15, the NAIC continued its implementation of the ORSA (Own Risk and Solvency Assessment) scheme, requiring insurers to submit their own assessments of current and future risk through self-assessment mechanisms. Larger insurance groups insurers will be required to regularly perform an ORSA beginning in 2015.

A long-standing industry bogeyman – regulation by the federal government – continued to be a threat, as in 2014-15 the Federal Insurance Office (FIO), created pursuant to Title V of the 2010 federal Dodd-Frank Act, continued and expanded its operations. For example, the FIO in December 2014 issued its long-awaited report on the reinsurance industry.

Still further regulatory scrutiny fell on the industry as it reacted to breaches in data security. The most celebrated recent example was the hack perpetrated against Anthem, which resulted in the loss of personal information concerning thousands of insureds. Numerous lawsuits have already been initiated in several states and the NAIC launched an investigation in February 2015, with numerous state insurance departments participating.

Much of the recent regulatory scrutiny has fallen upon life insurers, as their sales and claim practices came under investigation in such areas as:

• Calculation of the “cost of insurance” (i.e., mortality cost) pursuant to universal whole life policies;

• “Shadow” insurance; and

• Treatment of unclaimed property, particularly with regard to use or non-use of the Social Security Administration’s Death Master File (DMF).

Class action litigation: Class action litigation continued to create legal work for the leading firms. These actions often arise from the same issues investigated by insurance regulators, with the class plaintiffs seeking to act as “private attorneys general,” achieving compensation for persons affected by challenged practices. Again, much of the activity related to actions against life insurers.

A continuing issue in the class action sphere was the development of the principles announced by the Supreme Court in Walmart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), restricting the right to proceed as a class when the facts concerning the claims of putative class members are variable or individualistic.

Reinsurance litigation and arbitration: As major industry losses mature – i.e., coverage disputes are resolved and claims are finally settled or paid – insurers endeavor to collect portions of the loss from their reinsurers. This can lead to disputes as reinsurers question the propriety of loss settlements, the allocation of losses to specific policies and years, the scope of the coverage of the reinsurance contract, or even the validity of that contract. Such disputes are most commonly resolved by arbitration. Reinsurance disputes are a fertile source of activity for the highest-ranked firms, as illustrated by the number of firms in the rankings announced today that identify reinsurance disputes as one of their significant specialties.

In 2014-15, the area remained productive, as the major industry losses of the recent past – the World Trade Center attack, Hurricane Katrina, PCB dumping, misconduct by clergy, and, above all, the second wave of asbestos litigation – continued to mature and generate disputes at the reinsurance level.

Among the many issues that drew attention from practitioners in the area during 2014-15 were:

• Umpire selection for arbitration panels and the extent to which courts can or should be involved in the process;

• The “cost-inclusiveness” of the limits of facultative reinsurance certificates, including the continued vitality of the Second Circuit’s opinion in Bellefonte Reins. Co. v. Aetna Cas. & Sur. Co., 903 F.2d 910 (2d Cir. 1990); and

• The extent to which “non-products” asbestos losses must be allocated separately from traditional product liability losses.

Bad faith litigation: Fueled by a strong and active plaintiff’s bar, litigation against insurers alleging bad faith handling of claims continues to grow, with the large national firms taking an increased role in the defense bar. This area is the source of a large volume of cases, both because of the potential for a windfall recovery to the plaintiff and the increasing number of jurisdictions recognizing the cause of action (or variants thereon).

Indeed, in 2014-15, the trend continued whereby the bad faith cause of action overgrew the bounds of traditional individual-versus-insurer litigation. “Inter-company” bad faith claims continued to arise between co-insurers and between primary and excess insurers. The scope of discovery continued to be a controversial topic, as plaintiffs resorted more and more to “institutional” discovery of an insurer’s general practices and procedures.

In short, litigation work for insurers has become a profit center for a great number of the largest national firms, fully shedding its former image as a backwater. To be sure, there are insurance practice areas that are, and probably always will be, the preserve of the “local practitioner”: the defense of claims under automobile and homeowners policies, subrogation actions, life insurance coverage disputes, and the like. Anything else, however, creates possible engagements for the nation’s leading firms, as insurers recognize that the complexities of the 21st Century economy make it dangerous to rely on counsel from any attorneys but the best.

Insurance: Dispute Resolution: Insurer - Nationwide

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第一等 |

Basic facts about the department Key office is New York.

What the team is known for Market leading group that takes on the most sophisticated coverage disputes. Possesses wide-ranging expertise in cases relating to asbestos, pollution and professional liability claims as well as insurance bankruptcy issues. Provides deep expertise and experience in both direct and reinsurance matters.

Strengths (Quotes mainly from clients) 

"Simpson Thacher & Bartlett is an elite firm that has demonstrated expertise in handling high-stakes matters."

"Blue-chip clients go to them on their most important cases."

"A terrific firm and insurance practice." 

Work highlights Represented United States Fidelity and Guaranty and St. Paul Fire and Marine Insurance in their longstanding dispute with reinsurers over the settlement of Western MacArthur's asbestos liabilities.

Successfully represented Travelers in dismissing all known whistle-blower complaints arising from the 2005 Gulf Coast storms.

Notable practitioners  

Barry Ostrager has a "legendary reputation" and is viewed by the market as a "dean of the reinsurance and insurance Bar." His deep experience litigating the largest and most complex insurance issues make him a go-to attorney for carriers in their most significant cases.

The "fantastic" Mary Kay Vyskocil is a leading player in both direct and reinsurance disputes. She focuses her practice on leading the most sophisticated and high-value matters in both trial and arbitration for domestic and international carriers.

Significant clients Berkshire Hathaway Reinsurance Group, AIG, Beazley Group, American Nuclear Insurers, AXA Equitable Life Insurance.

第二等 |

Basic facts about the department Key office is New York.

What the team is known for Prominent presence in domestic and Bermuda-based direct and reinsurance disputes on behalf of the industry. Provides expertise in cases involving financial lines, professional liability and trade credit insurance among other areas.

Strengths (Quotes mainly from clients) 

"They have some of the smartest lawyers in the business." 

"They are very well thought-of." 

Work highlights Represented two AIG insurance companies in defense of coverage and bad faith claims brought against them by Fidelity National Financial.

Acted for XL Insurance on coverage actions arising from Amtrak's long-tail liabilities.

Notable practitioners  

According to interviewees, "there is no one in the business who is more capable" than Edward Krugman. Described by one commentator as "a genius," he is an expert in both reinsurance and direct insurance coverage litigation and arbitration.  

The "incredibly competent" Thorn Rosenthal's "name is inevitably associated with quality," according to market commentators. He is held in particularly high esteem for being "hugely capable and very knowledgeable on Bermuda form issues."  

Significant clients National Union Fire Insurance, AIG Trade & Political Risk, Ironshore Insurance, Granite State Insurance.  

Band 2 | Dentons

第二等 |

Basic facts about the department Key offices include Chicago, Los Angeles, San Francisco and New York.

What the team is known for Well-regarded litigation practice operating alongside its insurance regulatory group to handle complex disputes across a variety of themes including coverage, bad faith and fiduciary duty. Also handles cases involving catastrophic losses and mass torts. 

Strengths (Quotes mainly from clients) 

"They are involved in a wide range of cases and have a very strong commitment to the insurance space."

"They do an outstanding job on insurance coverage and significant class action matters."

Work highlights Defended Genworth Mortgage Insurance Company against nine federal court RESPA class actions aimed at national mortgage insurers relating to allegedly unlawful captive reinsurance agreements.

Represented Marsh USA in litigation relating to the use of a self-insured trust arrangement for workers' compensation.

Notable practitioners  

Reid Ashinoff is experienced in defending carriers involved in nationwide class actions. Commentators say: "He is unrelenting in terms of putting pressure on the other side and is very sophisticated in understanding where his strengths are."

Los Angeles-based Ronald Kent has a broad practice which takes in both trial and appellate work, with an additional focus on regulatory issues. Commentators describe him as "a superb attorney" and an "excellent trial lawyer."

Michael Barr offers experience and expertise in defending carriers against class actions, financial lines claims and complex commercial cases. Commentators say he "really gives his clients good service," and is a "commercially-minded problem-solver." 

Significant clients Arrowpoint Capital, MetLife, AEGON, Royal Indemnity, Enstar.

第二等 |

Basic facts about the department Key offices include New York and Los Angeles.  

What the team is known for Involved in a series of insurance disputes, providing expertise in areas such as bad faith, bankruptcy and professional liability among others. Particular expertise in matters involving the London market, with additional involvement in life and health, marine and specialty lines insurance.

Strengths (Quotes mainly from clients) 

"The firm has a vast knowledge of the London market insurers. This historical knowledge is valuable for the assessment of issues, the identification of potential witnesses and responsive documents."

"They are practical in their approach and surgical and strategic in how they advance the claims."

Work highlights Represented Lloyd's underwriters against McDonnell Douglas and Boeing in a dispute surrounding long-term coverage for environmental contamination.

Retained by XL Insurance subsidiary Greenwich Insurance to handle its Ninth Circuit appeal following a trial court decision concerning coverage for damages from natural gas production structure coating failures.

Notable practitioners  

Philip Matthews is "a very savvy practitioner," according to market commentators. He has a wealth of experience in handling cases involving large asbestos liability claims. Sources add: "He is brilliant at settlement and is a very trustworthy negotiator with a calming presence" 

Max Stern offers expertise across the full range of insurance dispute resolution on behalf of prominent industry clients. A source notes: "He is one of the most intelligent yet practical attorneys that I know and I trust his advice on coverage and policy drafting."

Thomas Newman is a "legend" with a "tremendous reputation" in the insurance legal market. He is deeply experienced in handling disputes, with a key focus on reinsurance arbitrations.

Significant clients Allstate Insurance, Great American Insurance, Liberty Mutual, Riverstone Group, Travelers.

第二等 |

Basic facts about the department Key office is Washington, DC.

What the team is known for Respected team with the capacity to handle big-ticket litigation and arbitration proceedings on behalf of major carriers. Offers expertise and experience across numerous coverage cases, including those arising from natural disasters, environmental contamination and personal injury, as well as professional and general liability. 

Strengths (Quotes mainly from clients) 

"They are outcome-focused and don't run up fees when a case could be resolved."

"They are a terrific firm with terrific lawyers." 

Work highlights Acted for Zurich on a complex asbestos coverage case involving potential exposure for the carrier of more than $1.4 billion.

Represented Hudson Specialty Insurance in the successful dismissal of claims brought in the aftermath of injuries to firefighters during a fire at the Deutsche Bank Building in 2007.

Notable practitioners  

James Rocap handles sophisticated insurance coverage disputes as part of a broad litigation practice. According to commentators, "he is a really good litigator who is very thoughtful, works incredibly hard and comes up with creative solutions to problems."

Roger Warin has a healthy reputation in the market due to his "vast experience leading the largest and most complex matters - there is nothing that he hasn't seen." His insurance focus has taken in claims surrounding business interruption, products liability and asbestos bodily injury, among numerous others.

Significant clients Travelers, AIG, XL Insurance, Allstate, MetLife.

第三等 |

Basic facts about the department Key offices include San Francisco and Washington, DC.

What the team is known for Focuses on litigating complex coverage cases in both the direct insurance space as well as on reinsurance matters both domestically and abroad, with experience in the London and Bermuda markets. Also handles bankruptcy issues arising in the insurance field.

Strengths (Quotes mainly from clients) 

"They are well-organized, efficient and produce quality work you can trust."

"They are flexible and do what we ask, as well as offering a lot of options."

Work highlights Acted for Allianz/Fireman's Fund companies in coverage disputes with various major policyholders including General Motors and the NFL, among others.

Acted for United Educators in a series of coverage matters relating to issues including employment terminations, discrimination and physical injuries.

Notable practitioners  

Paul Kalish is a seasoned coverage practitioner with deep familiarity of the Bermuda Form and the issues surrounding it. According to one source, "he is extremely smart and, like a chess player, thinks many moves ahead."

Mark Plevin has deep experience in insurance bankruptcy. A client notes: "For me he is the best attorney for representing insurance companies in bankruptcy matters in the country." He is also lauded as a "master negotiator on huge mass claims involving coverage issues."

Clifford Hendler focuses his insurance practice on mediation and alternative dispute resolution. A client enthused: "He is a very skilled negotiator who is terrific at dealing with sensitive issues diplomatically."

Significant clients ACE USA, Arch Insurance (Bermuda), Beazley Group, Great American Insurance, Everest National Insurance.

第三等 |

Basic facts about the department Key office is Los Angeles.

What the team is known for Impressive West Coast presence handling issues across the country relating to environmental pollution and contamination claims as well as asbestos liabilities and insurance bankruptcy. Also involved in cases involving the emerging area of cyber security coverage.

Work highlights Represented ACE in the New York Court of Appeals in a case relating to excess coverage supplied by ACE subsidiary Century Indemnity for environmental contamination coverage.

Retained by Century Indemnity to handle its coverage dispute with Montrose Chemical arising from claims surrounding Montrose's production of DDT.

Notable practitioners  

Tancred Schiavoni is seen as a quickly-rising star in insurance law. He is prominent in the insurance-related bankruptcy space.

Richard Goetz has extensive experience in handling significant environmental coverage disputes. 

Significant clients CIGNA, Arrowpoint Capital, Resolute Management, AIG, Fireman's Fund Insurance.

第三等 |

Basic facts about the department Key offices include New York and Chicago.

What the team is known for Recognized for the strength of its insurance and reinsurance practice particularly in litigation and arbitration. Also involved in a series of prominent class actions brought against the industry, as well as insurance-related white-collar criminal investigation.

Strengths (Quotes mainly from clients) 

"They were very focused on meeting our needs and handled the litigation with the appropriate resources."

Work highlights Represented Amerisure Mutual Insurance in a reinsurance arbitration against one of its treaty reinsurers.

Acted for a W. R. Berkley subsidiary in Illinois state court in a dispute with a managing general agent.

Notable practitioners  

Susan Stone co-heads the global insurance and financial services group and has extensive trial and arbitration experience in both direct and reinsurance matters. Commentators describe her as a "very smart and very knowledgeable" practitioner.

Significant clients ACE, John Hancock Insurance, Liberty Mutual, TIG Insurance, Century Indemnity.

第三等 |

Basic facts about the department Key offices include Chicago and Washington, DC.

What the team is known for A broad-based practice that offers clients a particularly strong D&O and professional liability team. Also offers expertise in environmental coverage and bad faith litigation as part of an extensive general liability focus.

Strengths (Quotes mainly from clients)

"They are collegial, professional and organized." 

Work highlights Acted for Indian Harbor Insurance in its capacity as an excess insurer in a coverage dispute with policyholder Quellos Group.

Represented Columbia Casualty and Continental Casualty in a bad faith action brought by Minnesota Life Insurance.

Notable practitioners  

Gary Dixon is a national presence in the D&O and professional liability space, having taken leading roles in some of the most sophisticated claims in recent years. Sources say: "He is terrific and a real leader in the major bankruptcy and D&O insurance areas."

Significant clients XL Group, CNA Insurance Companies, Allied World Assurance, HCC Insurance Holdings, Resolute Management.

Band 4 | Cozen O'Connor

第四等 |

Basic facts about the department Key office is Philadelphia.

What the team is known for Established market presence acting on behalf of insurance entities in a diverse range of coverage issues including, but not limited to, asbestos bankruptcy, e-commerce and professional liability. Experienced at both trial and appellate level.

Strengths (Quotes mainly from clients) 

"Cozen is well-diversified geographically and has great bench strength. The lawyers are extremely responsive and technically strong."

"They do a great job for us on high-exposure cases." 

Work highlights Successfully represented ACE American Insurance in affirming summary judgment following a False Claims Act action.

Successfully obtained a dismissal of a claim with prejudice brought against client Liberty Mutual. The case involved a construction defect claim relating to a groundwater recharge facility.  

Notable practitioners  

Stephen Cozen is an experienced litigator with particular expertise in appellate matters both in insurance and in general commercial law. Commentators described him as a "legendary figure" who is a "significant leader in the industry."

Significant clients National Indemnity, Resolute Management, Federal Insurance, Ironshore Insurance, Allied World Assurance. 

Band 4 | Locke Lord LLP

第四等 |

Basic facts about the department Key office is Chicago.

What the team is known for Represents industry clients in a series of reinsurance issues, with expertise in litigation and arbitration, in addition to related transactional and regulatory concerns. Experienced in sophisticated disputes on behalf of prominent reinsurers.

What's new? The team has bolstered its insurance offering thanks to the firm's merger with Edwards Wildman Palmer.

Work highlights Represented Financial Life Services in litigation brought by an intermediary alleging breach of contract relating to a life settlement which included the $10 million sale of insurance policies.

Acted for the Illinois Association of School Board’s Workers’ Compensation Self-Insured Trust in relation to a declaratory judgment action against the Illinois Department of Insurance.

Notable practitioners  

Nick DiGiovanni is a key contact for the practice. 

Significant clients Zurich American Insurance, Farmers Insurance, Southern General Insurance, Star Insurance, SCOR.

Other Ranked Lawyers 其他上榜律师

Described by a source as "the best out there," James Rubin of Butler Rubin Saltarelli & Boyd LLP is a leading reinsurance practitioner with extensive experience in sophisticated disputes. Commentators add: "He has an in-depth understanding of the business but has an extremely concise and thoughtful way of explaining issues to lay people." 

David Raim of Chadbourne & Parke LLP is held in high regard for his deep reinsurance expertise. Clients say: "He brings experience, competence and is very responsive. He makes you feel like his only client and is very practical and cost-conscious."

Peter Chaffetz of Chaffetz Lindsey LLP is a well-respected practitioner who focuses on reinsurance disputes. Commentators describe him as "smart and very hard-working," and "a very knowledgeable reinsurance lawyer."

Steven Schwartz of Chaffetz Lindsey LLP is a capable practitioner in the reinsurance space, providing a "real powerhouse practice with great depth." Commentators describe him as "an incredibly nice guy" who is "bright and a good brief writer."

David Attisani of Choate Hall & Stewart LLP earns widespread acclaim for his reinsurance expertise. A client enthuses: "He is a really excellent trial lawyer and a top-notch legal mind who is the perfect all-around package as outside counsel."

Paul Koepff of Clyde & Co US LLP is known to be a "hugely capable litigator with tremendous experience in insurance coverage." Sources add: "He is a master strategist and is one of the best, if not the best, on Bermuda Form work."

William Shelley of Gordon & Rees, LLP has a wealth of experience across insurance matters, particularly in the asbestos coverage and bankruptcy arenas. Sources say: "He is a fine lawyer with a breadth of experience and insight. He can forge resolutions that work for both parties and is a respected voice in the Bar, a fine legal analyst and a shrewd negotiator." 

Margaret Warner of McDermott Will & Emery LLP is a well-respected insurance practitioner who "impresses as someone who just gets tough stuff done." She centers her practice on mass tort litigation and coverage issues.  

James Ruggeri of Shipman & Goodwin LLP is experienced in litigating cases across the country and is particularly active in direct insurance coverage work. Interviewees describe him as "a very talented strategic thinker" who is "knowledgeable and one of the leading voices in any insurer group."

John Nonna of Squire Patton Boggs is one of the market's most prominent insurance and reinsurance attorneys. Interviewees describe him as an "outstanding lawyer" who is "very tough and very disciplined" on behalf of his clients.

Foreign Experts

Foreign Experts are individuals with expertise in a different jurisdiction to the one they are based in. These individuals are particularly highly regarded for international and cross-border work. Usually, they will be identified in the jurisdiction in which they are based and in their country of expertise.

Senior Statesman

A 'Senior Statesman' is a lawyer who no longer works hands-on with the same intensity but who, by virtue of close links with major clients, remains pivotal to the firm’s success.

Eminent Practitioners

'Eminent Practitioners' are highly influential lawyers in a particular practice area who, due to managerial or client relationship commitments, are less active in day-to-day work but remain key players in the team.

Other Noted Practitioners

Other Noted Practitioners are individuals who have not yet been ranked but are seen to be active and accomplished in this area of law.

Other Noted Firms

Other Noted Firms are firms that have not yet been ranked but are seen to be active and accomplished in this area of law.