NAIC Model Act on Financial Guaranty Insurance: A Commentary
Subcommittee on Financial Guarantee Instrumentation of the Committee on Developments in Business Financing, 43(2): 717–36 (Feb. 1988)
In December 1986, the National Association of Insurance Commissioners adopted model legislation setting forth a comprehensive scheme for regulating financial guaranty insurance. If enacted into law by the various states, this legislation will have far-reaching effects on both the financial guaranty insurance industry and the financial community. This Report provides a detailed discussion and analysis of the model legislation's provisions.
Reorganizing Insurance Company Separate Accounts Under Federal Securities Laws
Stephen E. Roth, Susan S. Krawczyk, and David S. Goldstein, 46(2): 537–621 (Feb. 1991)
Insurance company separate accounts are pooled investment vehicles used to fund variable annuity contracts and variable life insurance policies. Recently, consistent with similar developments and trends in the investment industry generally, many insurers have reorganized their separate accounts registered as investment companies under the Investment Company Act of 1940. This Article discusses the nature and structure of these separate accounts and examines the complex issues under the federal securities laws raised by separate account reorganizations.
Liability Insurance: A Primer for Corporate Counsel
Eugene R. Anderson, Joseph D. Tydings, and Joan L. Lewis, 49(1): 259–94 (Nov. 1993)
The key to unlocking the insurance coverage afforded by a corporation's liability insurance policies lies in understanding the policy itself and the services it promises to provide. This Article explains certain fundamental liability insurance concepts with which in-house counsel should be familiar.
Insurance Coverage for Wrongful Employment Practices Claims under Various Liability Policies
Robert A. Machson and Joseph P. Monteleone, 49(2): 689–714 (Feb. 1994)
This Article surveys the various statutory and common law bases for employment practices liability, including the most recently enacted federal legislation. Coverage for the employment practices exposures under various types of liability insurance policies is also analyzed. The authors opine generally on recent developments and future trends and comment upon the newly introduced employment practices liability insurance forms.
Bank Powers to Sell Annuities
Tamar Frankel, 49(4): 1691–1705 (Aug. 1994)
The debate on banks' powers to issue and sell annuities will be heard and decided by the Supreme Court who granted certiorari on the question. See Variable Annuity Life Ins. Co. v. Clarke, 998 F.2d 1295 (5th Cir. 1993), cert. granted sub nom. NationsBank of North Carolina, N.A. v. Variable Annuity Life Ins. Co ., 511 U.S. 1141 (1994). The author argues that banks may issue and sell fixed annuities in the form of deposits. These annuities belong to "insurance business, " rather than "insurance contracts," which are reserved exclusively to the insurance industry; other financial institutions may issue and sell fixed annuities. In sum, on this issue, the banks have it. ( Editor's note: The Supreme Court subsequently reversed the decision of the Fifth Circuit. NationsBank of North Carolina, N.A. v. Variable Annuity Life Ins. Co ., 513 U.S. 251 (1995)).
The Business of Banking: Looking to the Future
Julie L. Williams and Mark P. Jacobsen, 50(3): 783–816 (May 1995)
The basic framework that governs the powers and permissible activities of national banks was, at last, resolved by the Supreme Court in the recent decision of NationsBank of North Carolina, N.A. v. Variable Annuity Life Ins. Co ., 513 U.S. 251 (1995). This decision ended over 100 years of muddled precedent and conflicting commentary by holding that the "business of banking" is not limited to those activities and powers that are expressly enumerated in the National Bank Act but rather is an expansive concept and the enumerated powers in the act are merely illustrative. The key issue now turns to how to identify the activities that fit within the VALIC framework. This Article presents an approach to defining the "business of banking" in contemporary contexts, based upon the history of the national bank charter and the purpose of the national bank system, and guided by the analytical threads that link the numerous, and seemingly inconsistent, cases that address the issue.
Mutual Fund and Variable Insurance Products Performance Advertising
Clifford E. Kirsch, Wendell M. Faria, and W. Thomas Conner, 50(3): 925–93 (May 1995)
The investment company industry has grown dramatically in recent years. Investment company assets have grown at an annual rate of 23.1%—doubling every four years since 1980—and now stand at $2.4 trillion. Mutual funds, the most popular form of investment company, account for 86% of this $2.4 trillion. Variable annuities and variable life insurance policies have also grown very popular. Advertising by the issuers of these investment companies, their sponsors, and their underwriters has played a crucial role in the growth of these products. These funds face a common problem, namely, that, because they offer similar types of products and services, they must differentiate themselves in order to hold a place in the market. Many funds have attempted to achieve differentiation through performance advertising. The SEC, specifically through rule 432 of the Securities Act, has permitted investment companies to advertise performance data since 1979. Overall, rule 482 has been effective in regulating historical performance data; however, the rule has been less effective in situations when competitive pressures have caused funds to engage in structural changes. This Article presents a detailed analysis of the regulation of mutual fund and variable insurance products advertising, with an emphasis on the regulation of performance advertising.
Directors and Officers Indemnification and Liability Insurance: An Overview of Legal and Practical Issues
Joseph P. Monteleone and Nicholas J. Conca, 51(3): 573–634 (May 1996)
This Article surveys the law regarding indemnification of corporate directors and officers, highlighting the important provisions of Delaware's indemnification statute, which governs most corporations in the United States. The authors then turn to a discussion of directors and officers liability insurance, including a detailed description of typical policy terms, conditions, and exclusions. The Article closes with an overview of the recent case law regarding the much debated allocation issue.
Protection From the Storm: Insurance Coverage for Employment Liability
Lorelie S. Masters, 53(4): 1249–81 (Aug. 1998)
A company's insurance policies may provide needed protection for employment claims, including claims for employment discrimination and sexual harassment. This Article addresses issues that arise when a policyholder seeks protection under its general liability insurance policies. The Article also discusses "Employment Practices Liability Insurance."
Roundtable on the Role of Independent Investment Company Directors: Issues for Independent Directors of Bank-Related Funds, Variable Insurance Product Funds, and Closed-End Funds
Diane E. Ambler, 55(1): 205–42 (Nov. 1999)
This Article analyzes the role of independent directors of three specific types of mutual funds: bank-related funds, variable insurance product funds, and closed-end funds. It was originally prepared for presentation at a Roundtable sponsored by the SEC on the role of independent investment company directors and considers the extent to which legal obligations of mutual fund directors differ in kind or emphasis in the context of these three specific types of funds, which have their own distinct legal and practical issues.
Punitive Damages: Covered or Not?
Lorelie S. Masters, 55(1): 283–316 (Nov. 1999)
This Article gives an overview of the legal standards governing insurability of punitive damage awards. Because the law varies from state to state on this issue, the selection of the law applicable to the issue may determine whether a policyholder's liability insurance will apply to pay for an award of punitive damages. Even in states like New York that typically do not allow for coverage of punitive damages, however, the courts have fashioned exceptions to mitigate the harsh effects of the law in those states. The Article includes a survey of the law on the insurability of punitive damages in the fifty states and the District of Columbia.
Third-Party Releases in Bankruptcy Cases: Should There Be Statutory Reform?
Richard L. Epling; 75(2): 1747-1768 (Spring 2020)
Third-party releases, which can function as de facto discharges of nondebtors, have become an increasingly common feature of reorganization plans. There is no definitive Supreme Court case dealing with the legality and scope of such plan provisions, and the seven circuit courts of appeals that have addressed release issues have either disagreed or posited various legal tests and standards to satisfy the “extraordinary circumstances” bar they set for approving such releases.