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Barger & Wolen and Hinshaw & Culbertson Announce Merger

Combined Firms Create Powerhouse Insurance Practice with 120 Attorneys Dedicated to Serving the Insurance Industry


Chicago and Los Angeles — September 2, 2014 — Barger & Wolen and Hinshaw & Culberston, a national law firm with 460 lawyers in 22 offices around the country, announced today they will combine forces. The merger creates one of the largest insurance law practices in the United States with 120 full-time attorneys dedicated to providing legal counsel to insurance companies and financial services firms that shape the insurance industry.

The partner votes took place on August 28, 2014, and the merger will become effective on October 1, 2014. The combined firm will keep the name Hinshaw & Culbertson and have over 500 attorneys in 11 states as well as London.

Click here for the full press release. For more information, contact Heather Morse.  


California Insurers Asked to Submit Diversity Information About Boards of Directors

by Robert Hogeboom & Samuel Sorich

The California Department of Insurance (“CDI”) has issued a notification to insurers with 2013 written premiums of $100 million or more in California to complete and submit the CDI’s Governing Board Diversity Survey.

Among other questions, the Survey asks the insurers to report on the number of directors who identify themselves as a man or a woman, how many are comprised from seven different ethnic group categories, and how many are a disabled veteran, lesbian, gay, bisexual, and/or transgender.

Completed surveys, including an affidavit on the data, are to be submitted to the CDI by August 12, 2014. All surveys will be posted on the CDI website by October 1, 2014. The notification advises that survey results will be posted on the CDI’s website and that “[f]ailure to submit a complete report or submit a report by the due date will be noted,” which we presume will be noted on the CDI website.

The Survey stems from a recommendation put forward by the CDI’s Diversity Task Force which was created shortly after the Commissioner office.

Several existing statutes require insurers to submit reports or respond to data calls on other somewhat related topics:

Insurance Code section 926.2 requires each insurer admitted in California to provide information on all its community development investments and community development infrastructure investments in California.

Insurance Code section 926.3 requires each admitted insurer writing $100 million or more in annual premiums in California to file policy statements expressing goals for community development investments and community development infrastructure investments.

Insurance Code section 927.2 requires each admitted insurer writing $100 million or more in annual premiums in California to submit reports on minority, women, and disabled veteran-owned business procurement efforts.

In contrast, there is no statute which specifically states a requirement to report on the diversity of insurance companies’ boards of directors. The department’s notification to insurers does not cite the statutory authority for the Survey.

For copies of the report or questions, please contact Robert W. Hogeboom at or (213) 614-7304.

Originally posted to Barger & Wolen's Insurance Litigation & Regulatory Law blog.

MICRA's Big Deception

Michael Newman authored an op-ed for the May 29th edition of the Daily Journal to speak out against what he believes is an initiative that will deceive California voters this coming November.  

Newman writes that the primary purpose of the Troy and Alana Pack Patient Safety Act is to alter MICRA, the Medical Injury Compensation Reform Act of 1975. Currently, MICRA caps noneconomic damages in medical malpractice cases at $250,000.

The initiative slated for the November 2014 ballot, among other things, would seek to increase that limit to $1.1 million, which going forward will be adjusted to inflation.

Yet the official summary of the initiative, written by the office of Attorney General Kamala Harris, buries the MICRA reform provision.

The first three sentences of the summary describe provisions that would require drug testing for doctors. The fourth sentence refers to a provision that would require health care practitioners to consult a state prescription drug history database before prescribing certain controlled substances. A reader would need to get all the way to the fifth and final sentence to see that the initiative increases the cap on pain and suffering damages in medical negligence lawsuits.

This bit of deceptive presentation appears to be a deliberate attempt to sneak the measure past voters. As reported in an op-ed in the Los Angeles Times, The battle between doctors and trial lawyers grows more infantile, one of the law's primary advocates described the drug testing provision as "the ultimate sweetener," admitting that when the proposal was put before focus groups, "the only thing that made them light up was drug testing of doctors."

Newman also objects to the initiative the ballot measure's potential illegality. The state constitution provides that an "initiative measure embracing more than one subject may not be submitted to the electors or have any effect."

As the state Supreme Court has explained, one of the purposes of single-subject requirement was "to minimize the risk of voter confusion and deception." The initiative certainly violates the spirit, and perhaps the letter, of this law.    

The fundamental changes contained in the initiative deserve an honest and open debate, with Californians clearly understanding what they are voting for or against. The proponents, as evidenced their packaging, appear to lack confidence that they would win such a debate on its merits. If they would invoke the initiative process, proponents should show respect, not contempt, for voters' intelligence.

ERISA Long Term Disability Claim Barred By Failure to Exhaust Administrative Remedies

DRI members Martin E. Rosen and Jenny H. Wang, partners with Barger & Wolen LLP in Los Angeles and Newport Beach, California, respectively, recently obtained a summary judgment from the U.S. District Court for the Central District of California.  The court ruled that a plaintiff seeking long-term disability (LTD) benefits under an ERISA-governed employee welfare benefit plan cannot maintain his lawsuit without first exhausting the plan’s administrative remedies and that appeals for help to the Department of Insurance do not constitute the proper exhaustion of remedies.  On that basis, the court summarily dismissed the plaintiff’s lawsuit.

Defendant United of Omaha Life Insurance Company administered plaintiff Richard Carey’s claim for LTD benefits under an ERISA plan established by his employer.  Carey claimed that he was totally disabled as defined by the plan and thus entitled to benefits.  After investigation, United denied Carey’s claim.  In its denial letter, United told Carey that he had the right to administratively appeal the claim denial, as set forth in the plan, and that he had to submit any appeal within 180 days.  The letter also informed Carey of his right to contact the Department of Insurance (DOI) about United’s handling of his claim.



U.S. Supreme Court Rules on Attorneys Fees in Two Patent Cases

Attorney’s fees were the subjects of two U.S. Supreme Court decisions today in high profile patent cases. In Octane Fitness v. Icon Health and Highmark v. Allcare Health, the Court decided in "exceptional cases" reasonable attorneys fees may be awarded to a prevailing party.

Interestingly, the Court leaves it to the trial court to define which cases are exceptional. This is to be done in the court's exercise of its discretion on a case-by-case basis. This is a dramatic change. The prior standard used in these types of matters required a finding of "subjective bad faith" and/or "objectively baseless" conduct. 

Those standards were very high; making the circumstances where a fee award was granted to be rare.  The policy surrounding this decision appears to deter parties who have abused the patent system for their own financial gain.

Originally posted to Barger & Wolen's Litigation Management & Attorney Fee Analysis blog.

Towers Watson risk transfer program aims to offload retiree health care risks

Last week, Towers Watson & Co. unveiled a program that would enable employers to eliminate unfunded retiree health care plan liabilities for Medicare-eligible retirees by shifting those liabilities to insurers through the purchase of group annuities.

Barger & Wolen partner Michael Newman told Business Insurance in its March 30th story about the program that retiree health care plan liabilities are a big issue for some employers.

“A lot of employers want to defuse those liabilities, but many will wait and see” for results before deciding, Mr. Newman said.

Under the program, employers would first have to adopt a defined contribution approach for health care coverage offered to Medicare-eligible retirees. Under that approach, employers agree to make a fixed contribution towards the premiums of health care plans available through Towers Watson's private exchange, with retirees picking up the difference between the credit provided by their employers and the cost of the plan they select.

Continue Reading...

Lawsuits Over Health Exchange Premium Subsidies Challenge Heart of Reform Law

Royal Oakes was quoted in a Jan. 5th, 2014, Business Insurance article, Lawsuits Over Health Exchange Premium Subsidies Challenge Heart of Reform Law, by discussing a pair of lawsuits aimed at limiting availability of premium subsidies for health care coverage purchased through certain public exchanges.

In both cases, one filed in 2011 and another in May of 2013, the plaintiffs argue that the IRS decision to include the federal exchanges in the subsidy program improperly exposes employers in states that have declined to establish their own public exchanges to penalties from which they otherwise would have been shielded.

So far, Judges in both cases have denied the government's request for summary dismissal of the suits. Legal experts have warned that a ruling against the government would hinder the government’s ability to enforce minimum coverage requirements for employers and individuals in states that refuse to establish insurance exchanges and essentially, will cut-off access to subsidized coverage for lower-income, uninsured adults in those states.

When coupled with the enormous complication caused by the cancellation of millions of insurance policies, the subsidy issue has the potential to accomplish indirectly what the law's staunchest critics have hoped to accomplish in Congress, which is a repeal,” said Royal Oakes.


Californians Will Not Allow Health Insurers to Reinstate Coverage

By Peter Felsenfeld

More than a million California residents whose health plans were cancelled under the Affordable Care Act, a.k.a. Obamacare, will not be able to keep their existing coverage, despite President Obama’s directive that insurers keep such plans available for another year. The decision about whether to implement the president’s administrative “fix” rested with Covered California, the state’s new insurance exchange. The exchange’s board announced today that it would not allow insurers to revive plans that fell short of the ACA’s coverage mandates. Instead, California’s exchange will stay the course and continue to enroll residents into Obamacare.

Covered California made the best decision for consumers by supporting the success of our new health insurance marketplace,” said Patrick Johnston, President and CEO of the California Association of Health Plans. “Today’s decision comes with a renewed effort to ease the transition process for consumers in the form of a five-step action plan focusing on extending deadlines and increasing enrollment assistance.”

The decision will undoubtedly disappoint California residents who liked their previous coverage and had hoped they could keep their nonconforming plans for another year. The announcement also drew the consternation of state Insurance Commissioner Dave Jones, who previously expressed support for President Obama’s directive.

Covered California rejected what President Obama and I asked for – that individual policyholders be allowed to keep their existing health insurance through all of 2014. Covered California’s decision denies Californians the same opportunity health insurers are giving to its small business customers who are being allowed to renew current policies throughout 2014.”

The board’s decision, however, does not come as a surprise. Allowing nonconforming policies to continue for another year poses a risk to Obamacare’s financial viability as the move could prevent young, healthy individuals from participating in the new exchanges. A risk pool disproportionately made up of previously hard-to-insure participants could cause premiums to soar. We will watch the developments and keep you informed.

Originally posted to Barger & Wolen's Employment Law Observer

Health Insurance Premium Regulation Bid Draws Criticism

Barger & Wolen partners Richard De La Mora and Richard Hopkins were both quoted in a Nov. 14, 2013, Daily Journal article, Hospital insurance premium regulations bid draws criticism, about a proposed ballot initiative intended to regulate insurance premiums and how it could actually end up leading to narrower networks and fewer choices for consumers.

The ballot initiative proposes to give California's Insurance Commissioner Dave Jones the ability to regulate health insurers' premiums by expanding Proposition 103 to include health insurers. Passed in 1988, Proposition 103 currently applies to property and casualty insurers.

Some attorneys are concerned that in an effort to create more affordable healthcare, the initiative could lead to insurers having to leave the market and hospitals having to drop out of networks.

“Hospitals are constantly pushing for higher and higher [compensation],” De La Mora said.

De La Mora told the paper he was also concerned that the proposition would lead to a complicated process for determining how to best regulate the industry.

“When Prop. 103 [went] into effect, it took years to figure out what it meant, and the result was a formula” for rate regulation, he said.

Hopkins told the paper that plans on California's health exchange, which was developed in response to the passage of the federal Affordable Care Act, indicate that insurers have developed more tightly brokered relationships between themselves and providers.

“If everyone can buy insurance regardless of preexisting conditions [which Obamacare requires], you have to find a way of managing the cost of health care being provided,” including closer payer/provider arrangements, he said.


Court favors plain and ordinary meaning of policy terms when insured claims policy language is ambiguous

Two of Barger & Wolen's lawyers -- Martin Rosen and Ophir Johna -- received a victory from the Ninth Circuit Court of Appeal earlier this week in Glassman v. Crown Life Ins. Co., 2013 U.S. App. LEXIS 21312 (9th Cir. 2013). 

In Glassman, the plaintiff insured sued his disability insurer, Crown Life, claiming that while Crown Life had been paying his disability claim for well over two decades, it had failed to increase his benefits each year due to a cost of living adjustment rider that he had purchased with the policy. With well over 20 years of purported policy benefit increases at issue, the amount at stake exceeded $1.5 million.

Crown Life brought a motion to dismiss the action based on both policy interpretation and statute of limitation grounds. 

Although the United States District Court for the Central District of California (Judge Steven V. Wilson) permitted the insured to conduct discovery, the court eventually granted Crown Life's motion to dismiss. 

It ruled (as Crown Life had argued) that the language of the rider served to increase a potential residual disability benefit, but did not increase the amount of total disability benefits payable in any month. The insured appealed the district court's ruling. 

On appeal, the Ninth Circuit sided with Crown Life and affirmed the district court's ruling, finding that "The language of the Rider unambiguously applies only to partial or 'residual' disability benefits, rather than total disability benefits." Id. at *1-2.

The opinion, while unpublished, is a reminder to insureds and their lawyers that simply contending that policy language is ambiguous does not make it so, and that courts will construe policy language in its plain and ordinary meaning.

To listen to the Ninth Circuit arguments, click here.

Older Entries

October 8, 2013 — Upcoming SCOTUS case could have wide implications for ERISA plans

September 17, 2013 — New Insurance Laws and Pending Legislation in California

August 5, 2013 — Could Medpay Be The Latest Target In California Bad Faith Claims?

June 17, 2013 — Recent decision limits the protections from liability for ERISA pension plan fiduciaries

May 23, 2013 — Cigna Agrees to Re-evaluate and to Compensate Disability Insureds in the Amount of $77 million

April 1, 2013 — Supreme Court Directs Trial Courts To Look At The Merits In Determining Whether To Certify A Class

March 20, 2013 — Supreme Court Closes CAFA Loophole

February 15, 2013 — Representations Of Future Tax Treatment To Induce Creation Of Pension Plan Are Not Actionable As A Matter Of Law

January 23, 2013 — Trial Court Abuses Its Discretion by Forcing Insurer to Bear the Cost of Giving Notice to Putative Class Members

January 18, 2013 — Program for Definitive Disability Conference Set!

January 11, 2013 — Early Bird Registration for Definitive Disability Conference Expire on 1/31/2013

October 23, 2012 — Barger & Wolen Launches Disability Insurance Industry Conference

October 2, 2012 — More than 20 new insurance-related bills signed into law by Governor Brown

September 19, 2012 — Podcast: Impact of Recent California Legislation

September 12, 2012 — Administrative Law Judge Invalidates Fair Claims Settlement Practices Regulations by California Department of Insurance

August 24, 2012 — Update: California Health Insurance Initiative Will Be on the Ballot in November 2014

August 20, 2012 — Supreme Court Upholds Affordable Care Act, But Just Barely

August 16, 2012 — Abandoned Property: Complying with California's Unclaimed Property Laws

May 31, 2012 — Signatures Filed for California Health Insurance Initiative

May 7, 2012 — California Assembly Passes Bill Requiring Health Insurance Filing and Disclosures

April 4, 2012 — California Workers' Compensation Looms as a Major 2012 Legislative Issue

March 19, 2012 — Significant Insurance Bills Being Considered by California Legislature

February 27, 2012 — "Dismemberment by Severance" v. Loss of Use: A Smorgasbord of Interesting Disability Cases

February 6, 2012 — Life Insurer "Death Master" Investigation Leads to Multi-State Regulatory Settlement

January 9, 2012 — Signatures May Be Collected for California Health Insurance Initiative

January 5, 2012 — Burden of Proof: The "What Changed?" Argument from "A Smorgasbord of Interesting Disability Cases"

December 19, 2011 — Bad Faith: A Smorgasbord of Interesting Disability Cases

December 12, 2011 — Appropriate Care: A Smorgasbord of Interesting Disablity Cases

December 9, 2011 — A Smorgasbord of Interesting Disablity Cases: Accidental Bodily Injury

November 30, 2011 — A Smorgasbord of Interesting Disablity Cases: Accident v. Sickness

November 30, 2011 — A Smorgasbord of Interesting Disablity Cases: Abuse of Discretion / Objective Evidence of Disability

November 14, 2011 — Barger & Wolen's Life, Health, Disability Insurance Law Blog Named to The Insurance Law Community's Top Blogs for 2011

November 1, 2011 — U.S. News & World Report & Best Lawyers Names Barger & Wolen to Their Best Law Firms List

August 18, 2011 — Collateral Source Rule Inapplicable When Injured Person's Medical Expenses are Discounted by Health Insurer

June 15, 2011 — Former President of Association of California Insurance Companies Joins Barger & Wolen

February 25, 2011 — Commissioner Jones Responds to Federal Government Announcement of New State Grants for Health Insurance Rate Review

February 7, 2011 — Guidelines for Health Insurers Requesting Rate Increase Issued by California Insurance Commissioner (SB 1163)

October 6, 2010 — Liability Insurer Does Not Waive Right to Raise Misrepresentations in Application for Failing to Follow Internal Underwriting Guidelines

October 4, 2010 — 14th Annual Insurance Forum in Chicago Sponsored by Barger & Wolen

September 28, 2010 — Patient Protection and Affordable Care Act of 2009 Now in Effect

September 23, 2010 — Blue Shield Wins Summary Judgment in Rescission Case

September 17, 2010 — Barger & Wolen Receives First-Tier Ranking in the Inaugural "Best Law Firms" Survey by U.S.News and Best Lawyers®

August 19, 2010 — Barger & Wolen's Insurance Law Blogs Named to Top 50 Blogs by LexisNexis Insurance Law Community

August 9, 2010 — California Supreme Court Holds Treble Damages Not Permitted under the Unfair Competition Law - Restitution is the Sole Monetary Remedy

July 7, 2010 — Supreme Court Upholds San Francisco Health Care Plan Requiring Employer Contributions

July 6, 2010 — The Federal Insurance Office is on the Way

June 22, 2010 — Don't Miss the Barger & Wolen Presentations at the 2010 Western Claim Conference

May 26, 2010 — "Prevailing Party" Status Not Necessary for an ERISA Attorneys' Fees Award

May 18, 2010 — Barger & Wolen Updates the Book of Insurance Law

May 13, 2010 — Legislation to Cap Punitive Damages in California Defeated; Plaintiff's Lawyers Rejoice

April 29, 2010 — Court Refuses Requests to Depublish Decision Affirming Rescission of Health Insurance Policy

April 7, 2010 — Assembly's Insurance Committee to Hold Hearing Today on Legislation Voiding Discretionary Clauses in Disability and Life Insurance Policies

April 6, 2010 — Court Finds Triable Issue of Fact as to Rescission of Health Insurance, but Upholds Dismissal of Bad Faith and Punitive Damage Claims

March 25, 2010 — AB 2578: Proposition 103 Coming to Managed Health Care?

January 21, 2010 — California Court of Appeal Upholds Rescission of Health Insurance Policy

November 12, 2009 — United States' Amicus Brief Argues Medicare Act Preempts Statutory Consumer Protection and State Common Law Claims

October 26, 2009 — The U.S Supreme Court's Iqbal Opinion to Get Congressional Airing

October 21, 2009 — No More Gender Rating in California

October 21, 2009 — House Committee Votes to Strip Health Insurance Industry of Exemption from Federal Antitrust Laws

October 20, 2009 — Will Healthcare Reform Affect the Rate of Claim Denials?

September 28, 2009 — Council for Disability Awareness Follows Approvals of Disability Claims by the SSA and Private Disability Insurers

September 28, 2009 — Proposed Amendments to Health Care Reform Criticized By Insurance Industry

September 23, 2009 — An Insurance Agent Who Portrays Herself As Expert Owes a Heightened Duty of Care to the Insured

September 23, 2009 — Ninth Circuit Upholds Dismissal of Action Filed Twenty Days After Expiration of ERISA Plan's One-Year Contractual Limitations Period

September 16, 2009 — Ninth Circuit Clarifies Application of Abuse of Discretion Review When Insurer Has a Conflict of Interest

August 31, 2009 — Denial of Class Certification in Annuity Case Overruled Under a De Novo Standard of Review

August 26, 2009 — New Regulations Require Disclosure of Data Breaches

August 7, 2009 — ERISA-Governed Health Plan Excluding Coverage for Non-Contracted Providers Held to be Unambiguous

July 20, 2009 — No Special Treatment For "Top Hat" ERISA Plans In The Ninth Circuit

July 17, 2009 — Plan Participant Who Withdrew All Assets from Retirement Plan Still has Standing to Sue for Breach of Fiduciary Duty

July 2, 2009 — California Supreme Court Holds That Section 17200 Claims Must Comply With Class Action Requirements

June 24, 2009 — Golden Gate Restaurant Association Files Petition for Writ of Certiorari

June 18, 2009 — President Proposes National Insurance Office

June 3, 2009 — California Insurance Commissioner Unveils Proposed Rescission Regulations

June 2, 2009 — Dispute Between Securities' Brokers Not Subject to FINRA Arbitration

May 29, 2009 — Victory in Health Care Rescission Case

May 11, 2009 — Health Care Service Plan Not Liable for Provider's Failure to Diagnose Illness

April 26, 2009 — Welcome to Our Blog

April 23, 2009 — The Conundrum of Self-Reported Symptoms

April 16, 2009 — California Court Disallows Non-Party Spouse to Health Insurance Policy the Ability to Sue for Fraud

April 15, 2009 — Ninth Circuit Denies En Banc Review of Golden Gate Restaurant Association

April 3, 2009 — The Top Life, Health, Disability and ERISA Decisions of 2008

April 2, 2009 — U.S. Supreme Court Ends Long-Running Standoff With Oregon Supreme Court Over Punitive Damages

March 27, 2009 — Insurer Abused Discretion by not Considering Medical Report Created After Date of Disability

March 6, 2009 — No Abuse of Discretion Where Insurer Requires Objective Evidence

March 4, 2009 — California Supreme Court Hears Arguments Regarding Standing for UCL Class Actions

March 2, 2009 — The End of Discretionary Authority in Montana?

February 27, 2009 — Social Security Disability Backlog Delays Payments

February 20, 2009 — About Jenny H. Wang

February 19, 2009 — Geithner Says Federal Insurance Charter Is Important Part of Economic Plan

February 17, 2009 — California Insurance Commissioner Seeks Disability Insurance Changes

February 9, 2009 — Congress to Consider Optional Federal Charter for Life Insurers

February 7, 2009 — Commentator Takes Aim at Insurers Acting as Claims Administrators Under ERISA

February 1, 2009 — City of San Francisco Files Lawsuit Contending State Regulators Allow Discrimination Against Women

January 19, 2009 — NAIC Looks at Disability Insurance Best Practices

January 9, 2009 — When Compensatory Damages Are "Substantial," Third Circuit Adopts a 1:1 Punitive Damages Ratio

January 7, 2009 — Has The Age Of Billion-Dollar Verdicts Passed?

December 31, 2008 — ERISA Authorizes a Participant to Sue for Misconduct when it Impairs Plan Assets in Participant's Individual Account

December 28, 2008 — Claim Remanded To Claims Administrator Initially Terminated Before Providing Participant With Requested Plan Documents

December 28, 2008 — Exhaustion Of Administrative Remedies Not Required When Claimant Reasonably Relied On Administrator's Statement That He Was Not Required To Exhaust His Remedies Before Filing A Lawsuit

December 27, 2008 — No Abuse of Discretion Where Plan Fails to Consider Plaintiff's Salary in "Any Occ" Benefits Determination

December 26, 2008 — ERISA Preempts State Law Requiring That Insurer Reimburse Claimant for Copying Costs

December 24, 2008 — The Failure to Disclose Information to the Participant Justified an Increased Level of Scrutiny and the Court's Review of "New" Evidence Not Offered During The Claim

December 21, 2008 — Claimant Was Not Required to Exhaust Issues on Appeal

November 30, 2008 — Under Abatie, Discovery of Profitability Reports is Not Allowed

November 30, 2008 — Hearsay Exception Required for Certain Documents Outside the Administrative Record

November 29, 2008 — Structural Conflict Exists Even When Benefits Paid Out of a Trust

November 27, 2008 — It is an Abuse of Discretion to Ignore Contrary Evidence

November 26, 2008 — Abuse of Discretion to Rely on Employer's Accommodation that Materially Altered Participant's Job Duties

November 25, 2008 — City Ordinance Requiring Minimum Health Care Expenditures for Employees is Not Preempted by ERISA

November 22, 2008 — Structural Conflict of Interest Warrants Discovery of Statistical Information on Claims

November 21, 2008 — Participant Cannot Sue on Behalf of the Plan Without an Attorney