Paint Fumes Are Not Subject to “Pollution Exclusion” According to U.S. District Court

In what appears to be a case of first impression, the United States District Court for the District of South Carolina has held in NGM Insurance Co. v. Carolina’s Power Wash & Painting LLC, 2010 WL 146482 (D.S.C. Jan. 12, 2010) that the “absolute pollution exclusion” does not apply to injuries which are alleged to result from paint fumes at a work site, and should be limited in its application to traditional environmental pollution.

The NGM court acknowledged what it deemed to be a “clear” split of authority throughout the nation “regarding: (1) whether ‘absolute pollution exclusions’ bar coverage for incidents outside of traditional environmental pollution (e.g., contamination of groundwater over a long period of time), and (2) whether ‘absolute pollution…

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Reinsurance Rates Down First of 2010

According to a study by Guy Carpenter & Company, LLC, released earlier this month, reinsurance rates for most lines of property insurance decreased at the Jan. 1, 2010 renewal, compared with rates for similar coverage in 2009. Guy Carpenter’s “Rates Retreat as Capital Rebounds: Global Reinsurance Renewals at Jan. 1, 2010″ can be found here. Guy Carpenter attributes the rate decrease to a variety of factors, including relatively low catastrophe losses during 2009, the lingering effects of the recession on demand, and a rally in global financial markets, all of which lead to an excess in supply and increased competition. It remains to be seen whether this declining trend will continue through 2010. Guy Carpenter notes some “longer-term clouds on the…

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Seventh Circuit Court of Appeals Still “Pondering” Conflict Analysis

In Majeski v. Metropolitan Life Ins. Co., the Seventh Circuit Court of Appeals admitted that it “is still pondering . . . just how to consider a plan administrator’s conflict of interest.” 2009 WL 5088720 (7th Cir. Dec. 29, 2009) (emphasis in original). The court continued to reject a blanket rule that would force a reviewing court to weigh conflict in every case, instead opting for a case-by-case inquiry that weighs conflict only if it is relevant based on its gravity. “Gravity” of conflict might be discerned from the reasonableness of the claim procedures, the safeguards implemented to minimize the conflict and the “terms of employment” of the decision-maker’s staff, the court suggested. The court rejected that the conflict inquiry…

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