From New England to Virginia, courts and juries made insurance headlines

Up and down the East coast, much of the most interesting local insurance news in 2005 took place in the courts of law and not in the court of public opinion.

A New Jersey Supreme Court ruling allowing people who suffer permanent injuries in auto accidents to sue over pain and suffering, even if their injuries don’t meet a so-called “serious life impact” test caused concern for the industry.

A Massachusetts court blocked a plan to convert that state’s auto reinsurance facility into an assigned risk plan.

A federal jury in July awarded Vermont’s insurance commissioner $120 million to distribute to creditors of the Ambassador Insurance Co., which failed more than two decades ago.

A federal court ruled against independent agents who claimed a Massachusetts law governing bank sales of insurance trumped the federal Gramm Leach Bliley provisions.

The Pennsylvania Supreme Court permitted four corporations to bypass the state regulator’s liquidation procedures involving failed carrier Legion Insurance Co. and obtain their settlement monies directly from Legion’s reinsurers.

A Pennsylvania court ruled unconstitutional a key component of tort reforms enacted in 2002. Commonwealth Court ruled that a measure that abolished joint and several liability was invalid because it was not germane to the DNA testing legislation to which it was attached.

Insurers had to go to court in Rhode Island to challenge a new lead paint law and in Delaware to challenge the commissioner over restrictions on homeowner policy cancellations.

The Pennsylvania Supreme Court held that property insurance coverage for the “collapse” of a building is ambiguous and should be construed in favor of policyholders.

Excess broker
A New York excess lines insurance broker’s use of “sham declinations” in placing coverage with a non-admitted carrier could cost the broker a lot more than just regulatory fines, if a Nassau County Supreme Court ruling stands.

The Connecticut Appellate Court upheld the license suspension of a Connecticut man identified as a repeat drunken driver after a driving under the influence conviction in Vermont.

A Waterbury, Conn. jury awarded $36.5 million to the family of a 6-year-old boy in a record for a Connecticut malpractice award.

The U.S. Supreme Court ruled against Virginia renters who claimed they were sickened by toxic mold in their apartment building, in a decision that clarifies where personal injury cases should be heard.

Jurors in New Jersey said Merck & Co. should not be blamed for the death of a 60-year old Idaho postal worker who suffered a heart attack after taking the company’s Vioxx painkiller.

The Port Authority of New York was negligent in the 1993 terrorist bombing of the World Trade Center and can be sued for damages, according to a New York State Supreme Court jury in Manhattan. The jury decided that the Port Authority, which owned the WTC, should have provided better security for the underground parking garage that was hit by Islamist militants in February 1993. The bombing killed six people and injured more than 1,000.