Northwest Insurance Law Blog : Seattle Insurance Lawyer & Attorney : Williams Kastner Law Firm : Tacoma, Washington, Portland

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It has been anticipated that the 21st century will mark the rise of the Asia Pacific region as the economic/geopolitical center of the world. The recent global financial recession, which has resulted in unmanageable public debt and slow recovery in the West, accelerated the economic rise of the East. With Asia leading the world out of this unprecedented crisis and emerging relatively unscathed, a new enthusiasm for deals has emerged especially in Australia, China, India, Indonesia, Singapore and South Korea.

These changes have brought about a new climate in international insurance. Underwriters of global insurance risks are more focused on insolvency issues impacting businesses in western countries and product liability, along with employment practice issues impacting the East. Of course, fraudulent business practices traverse the two worlds.

With the current global economic transition, US businesses along with their directors and officers could face new liabilities doing business abroad in the context of civil actions as well as regulatory and law enforcement proceedings. What legal pitfalls can US businesses face when operating within Asian Pacific jurisdictions? What regulatory issues must they be concerned with and what civil liabilities can they incur?

Jörg Ahrens is Head of Financial Lines Claims (common law) for Allianz Global Corporate & Specialty Insurance. He oversees Allianz’s large claim exposures in such jurisdictions as Australia, Canada and the UK, including the entire Asian market (Singapore, Hong Kong, Tokyo, India and China). He weathered some of the largest Professional Indemnity cases in the London market including Arthur Andersen and the TMT stock crash, as well as the US corporate bond crisis cases. He oversaw such noteworthy Directors and Officers Liability claims as Daimler Chrysler, Deutsche Telekom, WestLB and OneTel.

Mr. Ahrens is admitted to the bar in Germany and England (solicitor), in addition to holding 2 Master titles in competition law and economics. He has worked as a lawyer in Germany and the UK and as in-house counsel for the German television channel ZDF (Zweites Deutsches Fernsehen) as well as the Gerling Insurance Company. Mr. Ahrens is fluent in German, English, Russian and French.

Date: Monday, October 11th, 2010

Time: 8:00am - 9:30am

Where: Greater Seattle Chamber of Commerce, 1301 5th Avenue, Suite 2500, Seattle, WA, 98101

RSVP Required

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Registration The cost for this event is $12 for members of TDA and $15 for non-members. Refunds cannot be made after Wednesday, October 6. For more information or to register over the phone please contact Samantha Paxton at 206-389-7319 or samanthap@seattlechamber.com.

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On September 16, 2010, in Dewsnup v. Farmers Insurance (.pdf), the Oregon Supreme Court reversed a summary judgment ruling dismissing a homeowner's property insurance claim for water damage occurring after a storm blew tarping off the top of their home.

A contractor was replacing the insured's roof at the time of the storm. He had removed the wood shake roof and put down with staples a polyurethane plastic sheet. But the storm blew the sheet off the house and the contractor was unable to replace it before water came into the house and caused damage. Under the policy at issue, "for coverage to extend to water damage, the 'direct force of wind or hail' must first damage a building by causing an opening in a roof." Farmer's denied coverage because there was no permanent "roof" at the time of the loss, only a temporary cover.

Because the policy did not define the term "roof," the Oregon Supreme Court focused on the ordinary meaning of the term to evaluate Farmer's position. In doing so, it declined to adopt any temporal standard and instead adopted a functional standard under which "a roof should be sufficiently durable to meet its intended purpose: to cover and protect a building against weather-related risks that reasonably may be anticipated." The Court went on to find that the homeowner had raised genuine issues of material fact by presenting expert testimony that the tarping along with the other materials in place “would have been adequate to protect the home for one or two years if necessary.”

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On September 9, 2010, the Washington Supreme Court ruled in favor of a plaintiff class and against Farmers Insurance (.pdf) with regard to whether the Actual Cash Value (ACV) provision in Farmers Insurance's renter's polices requires payment of sales tax. The ACV provision states that a "[c]overed loss to property will be settled at actual cash value," and defines ACV as "the fair market value of the time of loss." Farmers had refused to pay sales tax to the class representative and appears to have relied largely on the fact that her policy also included a Contents Cost Replacement Coverage endorsement which provides for reimbursement to the insured if they replace items within 180 days of loss. Farmers took the position that the class representative was entitled to sales tax if she actually spent the money to replace items and incurred sales tax but not if she instead chose to take payment under the ACV provision. The Supreme Court rejected Farmer's position, finding that the undefined term "fair market value" was ambiguous and that it was reasonable to include sales tax within the meaning of the term.

Of particular significance for all insurers, the Court's decision turned largely upon the fact that Farmers had disclosed during discovery that it uses multiple ACV methods to measure including a replacement-cost-less-depreciation formula which sometimes includes sales tax. In responding to Farmer's arguments, the Court stated that "[fair market value's] meaning in the context of this insurance contract is what matters, which is why Farmer's own practice of including sales tax is critical. The Court's decision confirms that both insurers and insureds should carefully examine an insurer's own practices when determining the proper meaning of an insurance contract.