Top Court Decision Favors Aggrieved Policyholders Under the Insurance Law of the State of New York

Stockbroker Law - Monday, August 01, 2011
Top Court Decision Favors Aggrieved Policyholders Under the Insurance Law of the State of New York

On Tuesday, June 28, 2011, the New York State Court of Appeals handed down its decision in ABN AMRO Bank N.V. v. MBIA, Inc., affording victimized insurance policyholders and customers access to the courts for their losses. Notably, the lower court had held that certain preemption provisions under New York State law prevented victimized policyholders from pursuing claims against insurance companies. 

Citing New York’s long-established case law permitting victimized insurance company policyholders to pursue claims for breach of contract, including New York’s contractual claim for breach of covenant of good faith and fair business dealings, the Court ruled that victimized policyholders may pursue common law causes of action incorporating, by implication, claims under the Insurance Law of the State of New York.

 

Various provisions under the Insurance Law of the State of New York, including Sections 308, 2123 and 4226 and various regulations of the New York State Insurance Law, including Regulation 60, have been used to protect insurance company investors with violations of these various provisions forming component parts of breach of contract claims, notwithstanding the fact that these sections and provisions do not afford a direct, separate statutory private right of action.

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