Practice Areas & Industries: Crowell & Moring LLP

Practice/Industry Group Overview

Crowell & Moring LLP's Insurance/Reinsurance practice focuses on coverage litigation, reinsurance arbitration and counseling, and client counseling and negotiations for insurers in several lines of business including property and casualty, errors and omissions, directors and officers, and health care.

We currently represent more than 20 different insurance and reinsurance companies from more than a dozen different insurance carrier groups in a wide range of matters. We have represented these clients in hundreds of litigation and counseling matters involving a broad range of industries and businesses including pharmaceuticals, railroads, petrochemicals, municipalities, aerospace, and health insurance and managed health care industries. Many of those matters concerned coverage disputes arising out of complex insurance programs such as retrospectively rated programs, captive reinsurance and other fronting arrangements. In addition, we have become increasingly involved in litigation over conflicting claims to shared insurance by companies that had been corporate affiliates or which claim rights as a result of complex corporate transactions.

Our reinsurance lawyers have represented cedents and reinsurers in a wide range of matters including disputes involving actuarial and agency issues, contract interpretation, underwriting practices, rescission and reformation of reinsurance contracts, finite risk transfer, fronting arrangements, and allegations of misconduct by reinsurance intermediaries and managing general underwriters. Our attorneys also provide advice to insurance and reinsurance companies on issues as diverse as compliance with U.S. economic sanctions and embargo laws, reinsurance claims, notice issues, commutations and government investigations of finite risk products.

In recent years, defendants in asbestos cases have begun using the bankruptcy courts as a means to deal with their asbestos liabilities. Whether filed as "traditional" bankruptcy cases or as “prepackaged” cases, the bankruptcies of asbestos companies have the potential to impact severely the interests of the insurance companies involved. Responding effectively to the challenges posed by these complex, fast-track cases requires capability in bankruptcy and insurance coverage. Insurance companies are increasingly calling on Crowell & Moring's insurance and bankruptcy lawyers, who have played a lead counsel role at the trial and appellate level in most of the major asbestos bankruptcies of the last few years. We have also represented our insurance company clients in non-asbestos mass tort bankruptcies involving such areas as silica, plastic plumbing, and home heating furnaces.

Our insurance/reinsurance team also works closely with members of Crowell & Moring's Torts practice. For example, attorneys from both practices currently represent several insurance companies named directly as defendants in tort and statutory claims handling cases in a number of states. Similarly, attorneys from both practice groups help our insurance clients analyze emerging tort theories. The firm also serves as counsel for the Coalition for Litigation Justice, a coalition of property and casualty insurers whose goal is to reduce or eliminate the abuses and inequities that exist in the current asbestos, silica, and products liability tort litigation environment. Among other things, the Coalition files amicus briefs, and promotes legal scholarship and seminars.

Our insurance practice also goes beyond the traditional insurance coverage practice and includes, among other things, counseling insurance companies and insurance trade groups on related bankruptcy and legislative matters. In addition, working with our Health Care group, we handle state regulatory filings, certificate of authority applications and other state and federal regulatory matters for health insurance companies and health plans.

Client Counseling and Negotiations

We provide advice to our insurance company clients with regard to emerging insurance coverage issues in order to help them negotiate successful resolutions of disputes and avoid unnecessary coverage litigation whenever possible. Among other things, we help prepare reservation of rights letters, prepare opinions of counsel, and develop short-term and long-term strategies for responding to rapidly evolving changes in underlying liability theories. In addition to negotiating directly with policyholders, we also have extensive experience representing clients in alternative dispute resolution proceedings, including mediations and arbitrations.

Recent counseling and negotiation matters that we have undertaken on behalf of our insurance company clients include:

• We represented three different groups of insurance companies in six different coverage litigations and two related mediations in connection with the highly-publicized asbestos problems of subsidiaries of Halliburton Company. Our lawyers played a leading role in working with counsel for other carriers to negotiate a global resolution of the carriers' coverage disputes with the Halliburton-related companies.
   
• We are representing several insurance companies in complex multi-party settlement and mediation discussions involving major environmental contamination involving multiple policyholders and numerous lines of coverage.
   
• We represented an insurance company in an arbitration concerning the scope of a previous settlement agreement that resolved the policyholder's claims for coverage for alleged environmental liabilities under our client's policies.
   
• We have been retained by insurers to help promote sound legislative reforms and to prevent efforts to unfairly expand liability law at both the state and federal level.
   
• We serve as counsel to an insurer of educational institutions, providing counseling and negotiation in connection with claims affecting educational institutions, counseling and analysis with respect to policy language, and general advice and counseling with respect to coverage obligations.
   
• We are currently counseling an insurance industry trade association concerning issues relating to bankruptcies arising out of mass tort claims.
   
• We have counseled an insurance company with regard to underwriting issues arising out of complex environmental claims.

Litigation

We have litigated hundreds of coverage disputes on behalf of our insurance company clients in more than 35 states, from California to New York, Texas to Michigan, and Maine to Florida. Our coverage litigation experience includes cases arising out of underlying environmental claims and underlying product liability claims involving asbestos, silica, medical devices, pharmaceuticals (fen-phen, DES, tainted blood products, implants and bendectin), sources of alleged repetitive stress "injuries" (including keyboards and industrial tools), plastic plumbing, home heating furnaces, defective railroad ties, over-the-counter cold remedies and benzene, and includes some of the largest and most complex coverage cases in the country.

We have also represented our insurance company clients in coverage litigation involving employment discrimination, construction defects and construction accidents, sick building syndrome, antitrust, denial of health benefits, and a variety of claims by professionals including architects, engineers, lawyers, brokers, and doctors. In many of our cases the claims asserted against our clients are measured in the hundreds of millions of dollars.

Recent examples of our litigation experience include:

• We are counsel to an insurance company with regard to property damage and bodily injury claims -- both a class action and hundreds of additional individual suits -- arising out of an oil spill in New Orleans in connection with Hurricane Katrina.
   
• We represent an insurance company in litigation involving competing claims by two companies to the same policies in connection with a series of complex corporate transactions.
   
• We serve as strategic counsel to a major insurance company with respect to defending underlying silica claims, including claims asserted in the federal multidistrict silica litigation (In re Silica Products Liability Litigation, MDL No. 1553 (S.D. Tex.)).
   
• We are counsel to an insurance company that obtained a favorable summary judgment ruling from a California trial court extending the California Supreme Court’s landmark Powerine holding to a “non-standard” excess policy issued by our client. As lead appellate counsel, we then successfully defended the ruling in the Court of Appeal and then in the California Supreme Court. See County of San Diego v. ACE Property and Casualty Insurance Company, 37 Cal.4th 406 (2005).
   
• We represented several insurers in a coverage case involving approximately $1 billion in costs arising out of allegedly defective residential polybutylene plumbing systems. After obtaining a ruling from the Seventh Circuit ordering the litigation to proceed in state court rather than federal court, see In re United States Brass Corp., 110 F.3d 1261 (7th Cir. 1997), we obtained a favorable ruling from the Illinois Supreme Court holding that coverage is triggered under our clients' policies when the plumbing leaks and causes water damage, rather than when the plumbing is installed. Travelers Insurance Co. of Illinois v. Eljer Manufacturing, Inc., 757 N.E.2d 481 (Ill. 2001).
   
• We obtained a favorable choice of law ruling for one of our clients in a case originally filed by the policyholder in state court in Texas, where it maintains its principal place of business. After removing the case to federal court, we successfully argued that Texas law applies, and thus eliminated the policyholder's claims for emotional distress (a large part of the underlying damage awards), which is not considered bodily injury under Texas law.
   
• We are defending several insurance companies against direct actions brought by asbestos personal injury claimants in Texas, Ohio, and West Virginia. These cases seek recovery directly from insurers on the theory that they allegedly failed to “warn” the claimants about the dangers of exposure to asbestos. We recently obtained a favorable ruling from an Ohio appellate court affirming the trial court's dismissal of asbestos personal injury claimants' direct actions against numerous insurance companies that insured asbestos manufacturers and distributors. The court determined that insurance companies do not owe asbestos injury claimants a duty to warn absent a special relationship between the parties.
   
• We are currently representing several excess insurance companies in a coverage action concerning silica, asbestos, and mixed dust claims, in New Jersey state court.
   
• We represented a group of insurers in a long-running environmental coverage action in New Jersey. This complex coverage dispute originally involved claims for insurance for environmental liabilities arising at 37 sites throughout the country. By obtaining favorable rulings on summary judgment as a result of aggressive motion practice, we were able to reduce the total number of sites at issue to eight at the time of settlement, and to reduce the total baseline potential damages that would have been put before the trier of fact by approximately one-half.
   
• We represent insurers in more than a dozen of the nation's most prominent asbestos-related bankruptcy cases. We have repeatedly taken a lead role in these cases, including presenting oral argument in the Third Circuit in the landmark Combustion Engineering case and in the Fifth Circuit in the JT Thorpe case.

• We are currently defending an excess insurance company in a coverage action in New York state court involving asbestos claims against a boiler and heating equipment manufacturer. We represent the insurers at the trial level and in a related appeal.
   
• We were one of two firms serving as court-appointed liaison counsel in defending against an environmental coverage action brought by Exxon Corporation in California which involved more than 5,000 environmental sites in the US and Canada and $1.7 billion in total claimed damages. The case settled after trial commenced.

Reinsurance Experience

Our multidisciplinary reinsurance team has experience in virtually every area of reinsurance law. Our reinsurance practice involves representation of cedents, reinsurers and intermediaries in both arbitration and litigation as well as counseling these entities on reinsurance and insurance business matters.

Together, our reinsurance attorneys have represented cedents and reinsurers in matters involving a wide range of issues, including actuarial and agency issues, contract interpretation, commutations, underwriting practices, rescission and reformation of reinsurance contracts, finite risk transfer, fronting arrangements, late notice, and allegations of misconduct by reinsurance intermediaries and managing general underwriters.

Here are some examples of our recent experience:

• We represent a reinsurer in a dispute involving the reasonableness of a cedent’s allocation of settlement costs on an underlying claim vis-à-vis that cedent’s reinsurance claims.
   
• We represent the interests of a major UK reinsurer with respect to its reinsurance exposures on a program of long-tail property and casualty insurance issued by a now insolvent US cedent.
   
• We represent a US cedent in multiple arbitrations aimed at recovering reinsurance payments for asbestos, environmental and other long-tail exposures under treaties issued by both alien and domestic reinsurers.
   
• We represent a US cedent in an arbitration seeking payment from its reinsurer for asbestos-related claims owed under multiple facultative certificates.

• We represent a reinsurer in establishing and implementing protocols for handling sunset, commutation and notice issues arising out of multiple workers’ compensation carve-out treaties.

• We represent a reinsurer on issues relating to the claims handling, reserving practices and the adequacy of notice provided on multiple claims by a cedent that is in liquidation.
   
• We represent a multinational reinsurer in its discussions with both a related corporate entity and the Treasury Department’s Office of Foreign Assets Control regarding the propriety of claims made under reinsurance treaties impacted by losses in US embargoed countries.
   
• We represent a reinsurer in a potential dispute over allocation and number of occurrences issues arising out of a series of losses ceded to it under an excess-of-loss reinsurance arrangement with an underlying insurance pool.
   
• We represent a reinsurer in negotiations with the liquidator of an insolvent insurance company over issues involved in commuting a reinsurance treaty covering workers’ compensation carve-out business.
   
• Our attorneys have represented a fronting cedent in multiple litigations and arbitrations against both its reinsurer and its reinsurance intermediary involving alleged misrepresentations in the reinsurance placement process as well as alleged insufficient underwriting of both the underlying and reinsurance business.
   
• We represent a reinsurer on issues arising from the underwriting, administration and interpretation of a treaty reinsuring variable annuity death benefits.
   
• While at the Justice Department, one of our attorneys led the department’s prosecution team investigating alleged abuses of finite reinsurance products and prosecuted a number of high-ranking insurance executives.
   
• Our attorneys have represented a ceding company in multiple arbitrations concerning claims of fraud in the placement of the relevant reinsurance treaties as well as in administering and reserving for claims made on the policies ceded under those treaties.
   
• We counsel reinsurers and cedents on issues involving among other things their rights and obligations under both reinsurance treaties and facultative certificates as well as government investigations of finite risk transfer policies.
   
• We provide advice to cedents and reinsurance companies, as well as other financial services companies, on compliance with US economic sanctions and embargo laws, which prohibit most transactions in or with countries such as Cuba, Iran, or Sudan, among others.

Representative Engagements

• We represented three different groups of insurance companies in six different coverage litigations and two related mediations in connection with the highly-publicized asbestos problems of subsidiaries of Halliburton Company. Our lawyers played a leading role in working with counsel for other carriers to negotiate a global resolution of the carriers' coverage disputes with the Halliburton-related companies.
   
• We serve as strategic counsel to a major insurance company with respect to defending underlying silica claims, including claims asserted in the federal multidistrict silica litigation (In re Silica Products Liability Litigation, MDL No. 1553 (S.D. Tex.)).
   
• We are counsel to an insurance company that obtained a favorable summary judgment ruling from a California trial court extending the California Supreme Court’s landmark Powerine holding to a “non-standard” excess policy issued by our client. As lead appellate counsel, we then successfully defended the ruling in the Court of Appeal and then in the California Supreme Court. See County of San Diego v. ACE Property and Casualty Insurance Company, 37 Cal.4th 406 (2005).
   
• We represented several insurers in a coverage case involving approximately $1 billion in costs arising out of allegedly defective residential polybutylene plumbing systems. After obtaining a ruling from the Seventh Circuit ordering the litigation to proceed in state court rather than federal court, see In re United States Brass Corp., 110 F.3d 1261 (7th Cir. 1997), we obtained a favorable ruling from the Illinois Supreme Court holding that coverage is triggered under our clients' policies when the plumbing leaks and causes water damage, rather than when the plumbing is installed. Travelers Insurance Co. of Illinois v. Eljer Manufacturing, Inc., 757 N.E.2d 481 (Ill. 2001).
   
• We have been retained by insurers to help promote sound legislative reforms and to prevent efforts to unfairly expand liability law at both the state and federal level.
   
• We are defending several insurance companies against direct actions brought by asbestos personal injury claimants in Texas, Ohio, and West Virginia. These cases seek recovery directly from insurers on the theory that they allegedly failed to “warn” the claimants about the dangers of exposure to asbestos. We recently obtained a favorable ruling from an Ohio appellate court affirming the trial court's dismissal of asbestos personal injury claimants' direct actions against numerous insurance companies that insured asbestos manufacturers and distributors. The court determined that insurance companies do not owe asbestos injury claimants a duty to warn absent a special relationship between the parties.
   
• We have counseled an insurance company with regard to underwriting issues arising out of complex environmental claims.
   
• We represent insurers in more than a dozen of the nation's most prominent asbestos-related bankruptcy cases. We have repeatedly taken a lead role in these cases, including presenting oral argument in the Third Circuit in the landmark Combustion Engineering case and in the Fifth Circuit in the JT Thorpe case.
   
• We were one of two firms serving as court-appointed liaison counsel in defending against an environmental coverage action brought by Exxon Corporation in California which involved more than 5,000 environmental sites in the US and Canada and $1.7 billion in total claimed damages. The case settled after trial commenced.
   
• We represent a reinsurer in a dispute involving the reasonableness of a cedent’s allocation of settlement costs on an underlying claim vis-à-vis that cedent’s reinsurance claims.
   
• We represent the interests of a major UK reinsurer with respect to its reinsurance exposures on a program of long-tail property and casualty insurance issued by a now insolvent US cedent.
   
• We represent a US cedent in an arbitration seeking payment from its reinsurer for asbestos-related claims owed under multiple facultative certificates.
   
• We represent a reinsurer on issues relating to the claims handling, reserving practices and the adequacy of notice provided on multiple claims by a cedent that is in liquidation.

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