Blog Archive

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Apr 7 2016

Federal Court Rejects Use of Primary Jurisdiction in Provider Fraud Action

Tennessee will become the first state to require companies to notify consumers of data breaches in which their personal information was breached, even if that information was encrypted. On March 24, 2016 Tennessee's Governor Bill Haslam signed SB2005/HB1631, amending Tennessee's Identity Theft Deterrence Act the "ACT") (Tenn. Code § 47-18-2107) to eliminate its safe-harbor for encrypted information.

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Apr 4 2016

Court of Appeals Finds Office Based Surgery Centers Not Entitled to Facility Fees

On March 31, 2016, in the matter of Government Employees Ins Co v Avanguard Medical Group PLLC (--- N.E.3d ----, 2016 WL 1247701 (N.Y.), 2016 N.Y. Slip Op. 02473), the Court of Appeals held that, unlike hospitals and ambulatory surgery centers that are regulated under Article 28 and licensed by New York State through the Department of Health, office based surgery centers, which are not licensed by the State, are not entitled to reimbursement of facility fees. Unlike the former, there is no specific fee schedule (adopted by the Superintendent under the No-fault law) that provides for the reimbursement of facility fees to office based surgery centers and, therefore, they are not entitled to reimbursement. This is a significant ruling in that owners of office based surgery centers are often also the service providers, significantly increasing their fees at the expense of reducing the amount of coverage otherwise available to claimants under their No-fault policies. In that regard, the decision further promotes the cost containment objectives of the No-fault law.

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Apr 1 2016

Federal Court Rejects Use of Primary Jurisdiction in Provider Fraud Action

On March 29, 2016, in the matter of Liberty Mutual Fire Insurance Company, et al. v Isaac Shapson, et al. (13-cv-05046-ENV-PK), Judge Eric N. Vitaliano of the United States District Court for the Eastern District of New York rejected medical professional corporations' attempt to invoke the doctrine of Primary Jurisdiction to stay Liberty Mutual's fraud-based affirmative recovery action pending an investigation by the New York State Department of Financial Services ("DFS"). Defendants argued that under section 5109 of the Insurance Law, which authorizes the DFS to investigate and de-authorize health providers from submitting claims through the No-fault system, Liberty Mutual's action should be stayed pending an investigation and determination by DFS as to whether the professional corporations at issue were fraudulently incorporated. In general, the doctrine of primary jurisdiction applies in instances where, although a claim may be brought in court, an administrative agency is imbued with special competence to determine an issue that is the subject of the court claim and, therefore, should decide that issue before proceeding in court.

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Oct 19 2015

NAIC Adopts Cybersecuirty Bill of Rights

Six months after adopting its Principles for Effective Cybersecurity Insurance Regulatory Guidance in order to guide insurers, producers, and other regulated entities to join forces in identifying risks and adopting practical solutions to protect information entrusted to them, the National Association of Insurance Commissioners' (NAIC) Cybersecurity Task Force has adopted a Cybersecurity Bill of Rights aimed at assisting consumers when their sensitive information is breached. The Cybersecurity Bill of Rights will be made available for state insurance departments to publish for local consumers (although the rights may vary depending on individual state laws or federal law), and is designed to describe to consumers what they can expect from insurance companies, agents, and other businesses when they collect, maintain, and use personal information

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Jul 22 2015

Federal Court Dismisses Cyber Insurance Lawsuit Without Prejudice

Columbia Casualty Company sought a declaratory judgment in the U.S. District Court for the Middle District of California that it is under no obligation to provide coverage to Cottage Health System. On Friday July 17th, the court dismissed a complaint, finding that Columbia was contractually obligated under the terms of the policy to submit the dispute to mediation prior to commencing the action.

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May 21 2015

CYBER INSURANCE CASE COULD ALTER LANDSCAPE

Columbia Casualty Company ("Columbia") is seeking a declaratory judgment in the United States District Court for the Middle District of California (2:15-cv-03432-DDP-AGR) that it is under no obligation to provide coverage to Cottage Health System ("Cottage") relating to a data breach which resulted in the disclosure of 32,500 of Cottage's patients' records that were stored electronically on its servers. Columbia is alleging that that coverage is excluded due to Cottage's failure to follow the minimum required cyber-security practices represented its application for insurance.

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Apr 30 2015

Sony and Zurich Settle Data Breach Coverage Dispute

On April 28, 2015, the Sony Corporation, Zurich American Insurance Co. and Mitsui Sumitomo Insurance Co. notified the New York State Supreme Court that they concluded a settlement and executed a settlement agreement in the matter of Zurich American Ins. Co. v. Sony Corp. of America, et al., case number 651982/2011, ending the wait for what was anticipated to be an important decision defining the scope of an insurer's obligations pursuant to a general liability policy for damages resulting from a data breach.

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Apr 24 2015

NYSDFS Moving Forward On Regulations to Address Cybersecurity at Third-Party Vendors

The New York State Department of Financial Services (DFS) recently released a report finding significant potential cyber security vulnerabilities with banks' third-party vendors, which are relied on for a broad-range of services and often have access to a financial institution's information technology systems, providing a potential point of entry for hackers.

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Apr 22 2015

NAIC adopts Principles for Effective Cybersecurity Insurance Regulatory Guidance

Effective April 16, 2015, the Cybersecurity Task Force of the National Association of Insurance Commissioners (NAIC) adopted Principles for Effective Cybersecurity Insurance Regulatory Guidance. The 12 principles which were adopted direct insurers, producers, and other regulated entities to join forces in identifying risks and adopting practical solutions to protect information entrusted to them, and are intended to establish insurance regulatory guidance that promotes coordination and protects insurance consumers.

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