In his recent speech to the American Medical Association, President Barack Obama held out the tantalizing possibility of reforming medical malpractice law as part of a comprehensive overhaul of the U.S. health-care system. As usual, he hedged his bets by declining to endorse the only medical malpractice reform with real bite -- a national cap on damages for pain and suffering, such as the ones enacted in more than 30 states.

These caps are usually set between $250,000 to $500,000, and they can make a substantial difference. Other reforms, such as rules that limit contingency fees, shorten statutes of limitation, or confine each defendant's tort exposure to his proportionate share of the harm, have small and uncertain effects.

Medical malpractice, of course, is not just an American issue. And now that the U.S. is considering universal health-care systems similar to those found elsewhere, it's worth a quick peek at their medical malpractice systems -- which usually attract far less controversy, and are far less expensive, than our own.

Read the full story here on The Wall Street Journal website.

Investors whose money was placed in Bernard Madoff’s firm through money managers and other feeder funds call themselves "indirects" and complain about not being able to recover their losses.  Jen Meerow, a New York television producer who invested Madoff through a feeder fund, says that the indirects are being treated like second class citizens.  Thousands of these indirect investors do not have access to the programs that offer tax breaks and securities insurance to direct investors.

Last March the Internal Revenue Service (IRS) announced that investors in Bernard Madoff Investment Securities LLC would be able to recover some losses through tax relief, providing investors with the same treatment as small businesses.  The IRS rule allows Madoff investors to declare a theft loss for most of their investment with Madoff and on fictitious earnings they did not withdraw.  The investors are also allowed to reclaim taxes paid on any other earnings over five years.  The break was provided to investors with earnings of less than $15 million, similar to a rule for small businesses.  The IRS rule applied only to qualified investors, or the feeder funds themselves.  Most feeder funds do not qualify since they have gross receipts exceeding $15 million, and their investors.

The article, from The Wall Street Journal, includes a chart with data about the Madoff case from court records the Federal Bureau of Prisons and Securities Investor Protection Corp.

The Supreme Court ruled Monday that white firefighters in New Haven, Conn., were unfairly denied promotions because of their race, reversing a decision that high court nominee Sonia Sotomayor endorsed as an appeals court judge.

The ruling could alter employment practices nationwide and make it harder to prove discrimination when there is no evidence it was intentional.

Read the full story here on the Yahoo! News website.

Legislation streamlining and reforming state regulation of surplus lines insurance and reinsurance was introduced Thursday in the Senate.

It has broad, bipartisan support from both the industry and members of Congress. Companion legislation is likely to pass the House under expedited procedures within the next month.

The legislation, S. 1363, was co-sponsored by Florida senators Bill Nelson, D, and Mel Martinez, R, as well as Sen. Evan Bayh, D-Ind., and Sen. Mike Crapo, R-Idaho.

The Risk and Insurance Management Society voiced strong support for the measure, the Non-Admitted and Reinsurance Reform Act of 2009, to the U.S. Senate.

Read the full story here on the National Underwriter website.

Bernard Madoff was sentenced Monday to 150 years in prison after apologizing to victims for a multibillion-dollar fraud scheme that the judge called "extraordinarily evil."

U.S. District Judge Denny Chin handed down the maximum allowable sentence in a New York courthouse packed with his victims and the press

Read the full story here on the MSNBC website.

Emerging Trends in Credit Crisis Litigation include:

• Credit crisis filings increased 172% in 2008 over 2007, rising to 188 cases from 69.
• The percentage of cases in which D&O are named as defendants remains high, with 62% named in suits in 2008, compared to 68% in 2007.
• Asset management firms became the main defendants in litigation in 2008 as opposed to lenders and home builders in the previous year.
• Structured products (CDOs and CDS) were involved in 3% of the lawsuits in 2007 and 22% of the lawsuits in 2008.

An Update on the Credit Crisis Litigation, co-authored by NERA Vice President Dr. Faten Sabry, Senior Analyst Anmol Sinha, and Associate Analyst Sungi Lee, may be found on the NERA website at http://www.nera.com/publication.asp?p_ID=3847.

An investigation by U.S. Securities and Exchange Commission (SEC) has cleared Fairfax Financial Holding Ltd., based in Toronto, of any wrongdoing in its use of a controversial product known as finite reinsurance, a finding that will strengthen Fairfax’s case against a group of hedge funds.

The SEC has sent Fairfax a letter saying that the agency did not plan to take any enforcement action related to its use of finite reinsurance.  Fairfax has filed a lawsuit alleging that a group of hedge funds and their employees conspired to bring down the firm’s stock price by releasing false information through analysts.  A lawyer said that the letter will be a crucial factor in its lawsuit now in proceedings in a court in New Jersey.

Read the full story here on the GlobeAdvisor website.

Staff at Goldman Sachs can look forward to the biggest bonus payouts in the firm's 140-year history after a spectacular first half of the year, sparking concern that the big investment banks which survived the credit crunch will derail financial regulation reforms.

A lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring, according to insiders at the firm.

Staff in London were briefed last week on the banking and securities company's prospects and told they could look forward to bumper bonuses if, as predicted, it completed its most profitable year ever. Figures next month detailing the firm's second-quarter earnings are expected to show a further jump in profits. Warren Buffett, who bought $5bn of the company's shares in January, has already made a $1bn gain on his investment.

Read the full article here on the Guardian website.

For the past six months, the group has gagged the Joint Disciplinary Scheme (JDS), the profession's watchdog, by preventing any mention of the report. Over the weekend, however, it dropped the injunction following a High Court hearing.

The JDS has now sent the report to Equitable's regulator, the Financial Services Authority (FSA), and the Institute of Chartered Accountants in Scotland, to whom E&Y is accountable.

Read the full story here on the Telegraph website.

Companies in the United Kingdom, particularly those traded in the United States, are buying huge amounts of insurance coverage as increasing class actions target their management, a survey of risk managers has found.

The poll, by the London-based Association of Insurance and Risk Managers and the New York-headquartered Advisen Ltd. market data analytics firm, found about 25 percent of firms responding said they bought £100 million ($163 million) or more directors and officers liability coverage.

In its report Advisen said the survey put chemical, natural resources and pharmaceutical companies on top with the highest estimated average annual D&O premium (£13.2 million, or $21.6 million), but that figure was skewed significantly by one company that paid a very large premium.

The financial services sector came in as the second biggest spenders with an average of £12.4 million ($20.3 million).

Advisen said 277 firms responded to the survey and most of those participating represented larger companies, with two-thirds having annual revenue of more than £1 billion ($1.65 billion).

Read the full article here from the National Underwriter website.

The court system will ultimately decide if a Derby blogger, who referred to political figures as the “mob” and “klan,” and wrote about people being drunk, chasing children with bats and hiking naked in a park, was on solid legal ground.

As blogging becomes more common, so have lawsuits against bloggers, and debates over the First Amendment, freedom of speech and what crosses the line into defamation.

“There is this misconception that the Internet is the Wild West with no laws and people can get away with anything they want to,” said David Ardia, director of the Citizen Media Law Project at Harvard University’s Berkman Center for Internet and Society.

Read the full story here on the New Haven Register website.

In addition to informative educational sessions and a host of networking opportunities, PLUS is pleased to feature several insightful keynote addresses this year including:

• President Bill Clinton, Founder, William J. Clinton Foundation and 42nd President of the United States
• Malcolm Gladwell, best selling author of Blink, The Tipping Point, Outliers, and Staff Writer for the New Yorker Magazine
• Walter Bond, Former NBA player and "America's Accountability Leader"
• Corbette S. Doyle, Lecturer of Leadership and Organizations, Vanderbilt University
• Dr. Robert Hartwig, President of the Insurance Information Institute
• Marvin Zonis, Professor Emeritus, Graduate School of Business, University of Chicago Business School

We know that this year, more than ever, there is competition for your support.  To that end, we've put together a program rich in information and networking opportunities that will deliver on your expectations. You won’t want to miss it!

Thanks to all the sponsors who have already committed to this event:

 Their support makes events like this possible!

In a decision hailed as a major victory for employers, the U.S. Supreme Court ruled 5-4 Thursday that plaintiffs in age discrimination cases must prove that age was the determinative factor in an adverse job action, not one of several motivating factors.

The decision in Jack Gross vs. FBL Financial Services Inc. concerned Mr. Gross, who was removed from his position as claims administration director at West Des Moines, Iowa-based FBL in 2003, when he was 54, and assigned as claims project coordinator. A woman in her early 40s was given many of his previous responsibilities.

Mr. Gross sued, alleging violation of the Age Discrimination in Employment Act of 1967. FBL contended Mr. Gross' reassignment was part of a corporate restructuring and better suited to his skills. However, a jury awarded Mr. Gross $46,945 in lost compensation.

In its narrowly divided decision, the Supreme Court held that plaintiffs bringing age discrimination claims must prove their age “was the ‘but-for' cause of the challenged adverse employment action. The burden of persuasion does not shift to the employer to show that it would have taken the action regardless of age, even when a plaintiff has produced some evidence that age was one motivating factor in that decision,” the high court ruled in overturning a lower court ruling. The case was remanded for further proceedings.

Read the full story here on the Business Insurance website.

North Korea has been perpetrating a global system of insurance fraud to earn its communist regime hard currency and finance a weapons programs, The Washington Post reported Thursday. 

"The North Korean government has collected hundreds of millions of dollars from some of the world's largest insurance companies on large and suspicious claims for transportation accidents, factory fires, flood damage and other alleged disasters," the Post wrote.

"This money helps keep Kim Jong-Il in power at a time he is engaged in nuclear brinksmanship," former State Department official David Asher told the leading US daily.

"It has become one of the North's largest illicit revenue generators," added Asher, who supervised a State Department unit that sought to track North Korea's illegal activities during former president George W. Bush's tenure.

Read the full story here on the Yahoo! News website.

The former head of ailing U.S. insurance giant AIG told a court Wednesday that he had a private jet fly a large block of the company's stock to Bermuda from New York to prevent AIG from seizing it.

"It was a reaction to the entire environment that was emerging between AIG and Starr International," Maurice "Hank" Greenberg told U.S. District Judge Jed Rakoff. "It was starting to get very ugly."

A key witness in the dispute between Starr International and American International Group, Greenberg appeared peevish under questioning by the lawyer for his former company, Ted Wells.

Greenberg also admitted to being "angry" at suddenly losing his job at the company that he had built into the world's largest insurer.

WASHINGTON (Reuters) - The Obama administration will call for a new U.S. Treasury Department office on insurance but won't propose federal regulation of the industry in the sweeping financial reform plan it will unveil on Wednesday.

The Office of National Insurance, as proposed, would monitor all aspects of the industry and flag any risks that could contribute to a future financial crisis, according to a document obtained by Reuters.

Read the full article here on the Reuters website.

Vitesse Semiconductor Corp., a Camarillo company still recovering from an accounting scandal, has reached a settlement in its lawsuit against its former auditing firm.

KPMG LLP will pay Vitesse $22.5 million and forgive all past indebtedness, Vitesse announced Monday. The settlement also releases both sides of all claims.

Vitesse filed suit against KPMG in June 2007, charging that KPMG was negligent in its auditing of Vitesse’s stock option grants and financial statements from 1994 to 2000. It later added 2001 to 2004 to the suit.

The company did not return a call for comment Monday. But response to the settlement was practically gleeful on VitesseInvestor.com, where shareholders post news and updates about the company. The original post to the news was “Yipee!!!!!,” a response that following commenters echoed.

Read the full story here on the Ventura County Star website.

The smallest decline in commercial property & casualty (P&C) insurance prices in four years – less than 1% – provides increasing evidence that the soft market is reaching its end, according to Towers Perrin’s most recent Commercial lines insurance pricing and profitability trends survey (CLIPS).

Prices for property and directors and officers (D&O) liability actually rose – albeit slightly – in the first quarter of 2009. Prices for large accounts – those with annual premiums in excess of $50,000 – also increased during the first quarter. This upturn in prices is not surprising, as large account prices eroded substantially more than middle-market and small accounts in 2007 and 2008. In contrast, small-account commercial prices continued their pattern of steady, but smaller, decreases.

None of the surveyed lines saw a deepening of price reductions from the fourth quarter of 2008 and, for lines where prices fell, all first quarter decreases were in the low single digits.

You can access the article here on the BusinessWire website.  You can access the abstract from the survey here on the Towers Perrin website.

The American Medical Association has long battled Democrats who oppose protecting doctors from malpractice lawsuits. But during a private meeting at the White House last month, association officials said, they found one Democrat willing to entertain the idea: President Obama.

In closed-door talks, Mr. Obama has been making the case that reducing malpractice lawsuits — a goal of many doctors and Republicans — can help drive down health care costs, and should be considered as part of any health care overhaul, according to lawmakers of both parties, as well as A.M.A.

Read the full story here on the New York Times website.

This Monday morning, I've done a quick review of some of the great "Friends of the PLUS Blog" sites and come up with three interesting, albeit different, posts.

Over on the Insurance and Reinsurance Report, there is discussion about the recent California court decision which held that a restaurant is liable for an unintential ADA violation.  Links to the original decision, and an article addressing the relevant issues can be found here.

The Specialty Insurance Blog has an article about Black Swans (Nassim Nicholas Taleb's term for a large impact, hard to predict rare event beyond the realm of normal expectations).  It looks at the thesis that models are sometimes defective and lead to incorrect conclusions because some events are not contained in data.  You can read the analysis here.

Finally, over on the D&O Diary, Kevin LaCroix is writing about the cost versus value of D&O Insurance.  He notes that instead of being "the" factor, cost is just one of many factors to be considered in determing the best policy.  You can read the full article here.

Registration for the 2009 PLUS University Philadelphia is now open!

This is an exciting educational opportunity for any insurance or legal professional with minimal experience in the professional liability industry. PLUS University is a week long, classroom-style instructional event that includes teamwork involving a case study, culminating in team presentations on the final day.

In addition to four full days studying a professional liability curriculum, students will hear from – and be able to interact with – senior industry professionals and PLUS leaders, both in the classroom and during scheduled evening functions. The program is filed for almost 30 hours of Continuing Education credits.

PLUS University Philadelphia
August 3-7, 2009
Desmond Hotel & Conference Center
Malvern, PA
Member Price: $2,200.00
Non-Member Price: $2,600

Lodging for the evenings of August 3 through August 6 and most meals are included.

Click here for PLUS University Philadelphia Information and Registration:

https://plusweb.org/index.cfm/p/Events.EventDetails/eventID/PLUSUEAST09

Recently, in a number of intermediate appellate court cases, insurers have successfully argued that some language in excess policies negates coverage if underlying insurers do not pay the full amount of applicable underlying liability limits.

Richard Shore, Stephen Weisbrod and Andrea Hopkins from the Gilbert Oshinsky Law Firm wrote an article about this trend here on the Firm website.

Financial institutions did not empower their risk management functions enough to curb the activities of risk takers which played a major role in the near collapse of the international financial system in 2008, according to a report from the Economist Intelligence Unit (EIU) co-sponsored by insurer ACE.

Whilst the negative perceptions of operating risks in the Middle East have reduced sharply in the 12 months prior to the survey, according to ACE, the region faces specific challenges from the global recession that may pose future risks.

Read the full story here on the EuroInvestor website.

The U.S. Federal Reserve drew back the curtain on its emergency repairs to the financial system on Wednesday, showing $5.3 billion in losses on assets taken over from firms it bailed out in 2008.

In a report on its $2.1 trillion balance sheet, the Fed also said it earned $1.2 billion from loan programs and $4.6 billion in interest on its holdings of Treasury and other securities in the first three months of the year.

The Fed is making more information available about its finances, and its rescues of investment bank Bear Stearns and insurer American International Group in order to show the public it is using its resources wisely, a senior Fed official said, speaking to reporters on condition of anonymity.

Read the full story here on the Insurance Journal website.

Building green is starting to develop it's own group of legal pitfalls.

In the New York Times Green Inc. Blog, Discussion is about the increase in litigation.

What if the building was intended to meet certification standards of the Leadership in Energy and Environmental Design program or other government green-building standards, but falls short, for example? What if it fails to receive expected tax breaks from the government for building green?

Already, according to Robert Fox, a managing partner with the Philadelphia firm, a number of legal disputes have arisen in the area of green building.

Over on the Green Building Law Update, Chris Cheatham details some of the cases cited and how they are developing.

It's never too early to mark your calendar and make plans to attend the PLUS International Conference!

In addition to the broad impact general sessions and informative breakout educational sessions at our 2009 program, we are pleased to have the following presenters:

• President Bill Clinton, Founder, William J. Clinton Foundation and 42nd President of the United States
• Malcolm Gladwell, best selling author of Blink, The Tipping Point, Outliers, and Staff Writer for the New Yorker Magazine
• Marvin Zonis, Professor Emeritus, Graduate School of Business, University of Chicago Business School
• Dr. Robert Hartwig, President of the Insurance Information Institute
• Walter Bond, Former NBA player and "America's Accountability Leader"
• Corbette S. Doyle, Lecturer of Leadership and Organizations, Vanderbilt University

We know that this year, more than ever, there is competition for your support.  To that end, we've put together a program rich in information and networking opportunities that will deliver on your expectations.

2009 PLUS Conference Teaser from Scott Billey on Vimeo.

Mark your calendar now for November 11-13, 2009 in Chicago, IL

David A. Shaneyfelt, a partner in the Ventura, California office of Anderson Kill Wood & Bender, LLP, discusses the potential for increases in reservation of rights letters, and how to address them when they arise.

You can read the full article here from the Anderson Kill website. 

Directors and officers liability insurance is one of the few types of insurance that interests a company's senior management. This is because D&O is one of the few insurance products left that still provides reasonably broad protection against serious losses and defense costs - a protection that is especially valuable in a time where many corporations are on life support.

Ironically, the broad scope of D&O coverage gives rise to its own set of problems - namely, a fight between various insured interests for the policy proceeds.D&O policies protect against a wide range of liabilities including regulatory actions, class actions, derivative suits, federal and state securities suits and state breach of duty suits.

Read the full story here on the AllBusiness website.

Robert and Paea Olah allege their daughter suffered brain damage during delivery because of negligence by osteopathic physician Ronald Baird, who denies the allegation and who refuses to grant permission to his insurer to settle the claim out of court.

However, a bankruptcy filing by Baird and the ruling by the 10th U.S. Circuit Court of Appeals in Denver could bring a resolution to the litigation. The court said the "right to settle" is an asset and the trustee in the bankruptcy case has the option of "selling" that right to the Olahs.

And if they obtain the right to settle, the Olahs can submit their claim for $1 million to the doctor's insurance company for a fair evaluation, according to their attorney, Ruth Lybbert.

Read the full story here on the Salt Lake Tribune website.

Insurance company Aetna has contacted 65,000 current and former employees whose Social Security numbers (SSNs) may have been compromised in a Web site data breach.

The job application Web site also held names, phone numbers, e-mail and mailing addresses for up to 450,000 applicants, Aetna spokeswoman Cynthia Michener said. SSNs for those people were not stored on the site, which was maintained by an external vendor.

The company found out about the breach earlier this month when people began receiving spam messages that appeared to come from Aetna and complained to the company, Michener said. The spam purported to be a response to a job inquiry and requested more personal information.

Read the full story here on the PC World website.

Kevin LaCroix has an interesting post on his D&O Diary Blog detailing the May 29, 2009 action by the Amsterdam Court of Appeals authorizing Royal Dutch Shell to begin funding the April 2007 securities settlement.

Kevin gives a background of the case and discusses some of the ramifications of the decision.

Check out the full article here on the D&O Diary.

Christopher Cox's policies while he led the Securities and Exchange Commission frequently stalled or diluted corporate penalties, several SEC officials said.

"Clearly some people wonder, 'If they don't want these kinds of cases, why should I bother doing them even though they're very important,'" James Coffman, a former assistant director of the SEC's enforcement division, told The Washington Post Monday.

Eric Dinallo announced Thursday that he is resigning his position as Superintendent of the New York State Insurance Department. Dinallo was closely tied to the government rescue to prevent the bankruptcy of American International Group, Inc. (AIG), and defended the company in congressional hearings in the wake of its collapse.

In a statement, New York State governor David Paterson called Dinallo a "stalwart advocate" for New Yorkers, adding that he and Dinallo had worked on the "rescue" of AIG.

Read the full story here on the ForeEx TV Website.