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Un I Chan

2 days ago

Un I Chan wrote a new wall post

Where can I find the information about the passing percentage/ score for an exam in CPCU? Thank you!
Dwayne C. Akins

3 days ago

Dwayne C. Akins wrote a new wall post

I am studying for this test and I wanted to obtain some feedback on the math questions for this exam. I take the test in 3 weeks.
Uzma Nawab

3 days ago

Uzma Nawab wrote a new wall post

Anyone on H4 visa pursuing CPCU
Jacki Monek

4 days ago

Jacki Monek wrote a new wall post

How much could financial aid help you in pursuing an insurance industry internship? The CPCU Society, an affiliate of The Institutes, is accepting applicants for the CPCU-Loman Education Foundation... see more
Joanna Roberto

5 days ago

Joanna Roberto wrote a new spotlight post

Editors note: Bad Faith Focus, published by the law firm Goldberg Segalla, provides timely summaries and analyses of bad faith litigation matters throughout the United States. We will be sharing them with you periodically throughout the year. Wallis v. Centennial Ins. Co. (E.D., Cal., July 19, 2013) An insured was issued a professional liability policy by an insurer, and filed suit... see more

Editors note: Bad Faith Focus, published by the law firm Goldberg Segalla, provides timely summaries and analyses of bad faith litigation matters throughout the United States. We will be sharing them with you periodically throughout the year.

Wallis v. Centennial Ins. Co.
(E.D., Cal., July 19, 2013)

An insured was issued a professional liability policy by an insurer, and filed suit against the insurer regarding obligation to defend in an underlying lawsuit. The insured brought claims against the insurer and its parent company, alleging that the insurer was a wholly owned subsidiary. The insured claimed the parent company made all of the decisions and took all the actions with regard to the defense in an underlying lawsuit. By alleging certain facts, the court allowed the insured’s claim to go forward on two legal theories: agency and alter ego.

The court allows a breach of good faith and fair dealing claim to go forward against a non-party to a contract if a signing party enters the contract on behalf of a non-signing party. When that occurs, the signing party is said to be the agent of the non-signing party. In parent-subsidiary relationships, agency occurs when the parent controls the subsidiary to the point that it has taken over performance of the subsidiary’s day-to-day operations.

In this case, the court would not dismiss the claims because the insured alleged that once the insurer issued the policy, the parent assumed responsibility for almost everything related to the insured’s defense. This included corresponding with the insured, paying for the defense, and handling the administration of the claims.

The alter ego theory is similar to agency theory. Under alter ego theory, a claim can be brought against a parent when it is abusing the corporate form of its subsidiary.

A party using this theory must prove: (1) that the parent and subsidiary are so united in interests that the two are essentially one company; and (2) that it would be unfair to not allow the claim against the parent.

The court allowed the claims to continue on alter ego theory as well. The insured alleged that the two companies shared a bank account, that the parent company repeatedly stated that it was obligated to pay the insurer’s policy obligations, that the companies shared common officers and directors, and more. According to the insured, it would be unfair for the court to recognize the companies as separate because it would allow the parent company to avoid liability for harm that it caused through the insurer.

Comment: This case illustrates that a claim may be brought against a parent of an insurance company. To receive the benefit of corporate forms, it is important to maintain separate structures and respect corporate forms.

Joanna M. Roberto, a partner in Goldberg Segalla’s Global Insurance Services Practice Group, concentrates her practice in complex insurance coverage and commercial litigation. She serves as coverage counsel for multinational insurance carriers in numerous matters pending throughout the country. Joanna is a Steering Committee member of the national Defense Research Institute’s Insurance Law Committee; chair of the Insurance Coverage Committee in the New York State Bar Association Torts, Insurance, and Compensation Law Section; and a member of the TICL section’s Executive Committee.

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Julia Skuibida

5 days ago

Julia Skuibida wrote a new wall post

Hello, anyone interested in studying for CPCU 530 together in Chicago/Metroarea? We can meet once a week. Let me know jskuibid@amfam.com Thank you, Julia
Jacki Monek

5 days ago

Jacki Monek wrote a new wall post

Welcome to the start of the new testing window! Meet fellow insurance professional Matthew Maxwell, who is currently working toward the AMIM and CPCU designations! *click on the image to learn... see more
Darci Noonan

5 days ago

Darci Noonan wrote a new wall post

i passed CPCU 520 yesterday (the old exam material one) but have yet to receive my email confirmation with my grade and am nervous as to whether it was submitted or lost in cyber space. Customer... see more
Harish Kumar

5 days ago

Harish Kumar wrote a new wall post

Hello, is anyone from Bloomington/Normal taking CPCU 530 in June- 2014
Kimberly Mance

6 days ago

Kimberly Mance wrote a new wall post

Hello, does anyone know how to register for a test online using SF's billing code to pay for it? Thanks