UPDATED THROUGH OCTOBER 12, 2016]

How Is a Covered Loss Divided Between Two Primary Insurers When One Has “Other Insurance” and “Limits Reductions” Clauses?   The Supreme Court certified review following a request under California Rules of Court, rule 8.548, by the U.S. Court of Appeals for the Second Circuit. The Supreme Court initially ordered briefing deferred pending a determination whether to restate the questions presented. On 10/12/16, the Supreme Court stated the issues as follows: Issue 1: When two primary liability insurers agree that their policies cover the same loss, may the primary insurer whose policy contains an “other insurance” clause (stating that its insurance is excess over any “other insurance or . . . self-insurance plan that covers a loss on the same basis”) enforce that clause in an action for equitable contribution brought by the primary insurer who defended and settled the insured’s claim and whose policy does not contain an other-insurance clause? Issue 2: In the same equitable contribution action described in Issue 1, when the amount paid by the primary insurer that settled the claim exceeds the non-settling primary insurer’s liability policy limits, what is the effect, if any, of the non-settling insurer’s “limits reduction” clause (stating that “[a]ll payments made under any local policy issued to [the insured] by us or any other insurance company will reduce the Limits of Insurance of this policy”)? Migdal Insurance Co. v. Insurance Co. of the State of Pennsylvania, S236177 (proceedings below, 2nd Cir. No. 15-2588-cv; __ Fed.Appx. __, 2016 WL 3639102). Review was granted on 9/14/16.

Does the Insurance Code Apply to a Contract which Contains Some Risk Distribution Terms? After the Court of Appeal affirmed judgment for the defendant, the Supreme Court granted review on the following issue: Was a self-storage facility’s storage rental agreement, which included provisions arguably meeting the definition of “insurance” (see Ins. Code, §§ 22, 1758.75), subject to regulation under the Insurance Code when the principal purpose of the agreement between the parties was the rental of storage space rather than the shifting and distribution of risk? Heckart v. A-1 Self Storage, Inc., S232322 (opinion below D066831, formerly 243 Cal.App.4th 525). Petition granted on 3/16/16.

Can the Insurance Commissioner Set Requirements For Replacement Value and Declare Non-Compliance as an Unfair Trade Practice? After the Second Appellate District Court of Appeal affirmed judgment against the Commissioner, the Supreme Court granted review of the following issues: (1) Does the Unfair Insurance Practices Act (Ins. Code, § 790, et seq.) give the Insurance Commissioner authority to promulgate a regulation that sets forth requirements for communicating replacement value and states that noncompliance with the regulation constitutes a misleading statement, and therefore an unfair trade practice, for purposes of the act? (2) Does the Insurance Commissioner have the statutory authority to promulgate a regulation specifying that the communication of a replacement cost estimate that omits one or more of the components in subdivisions (a)-(e) of section 2695.183 of title 10 of the California Code of Regulations is a “misleading” statement with respect to the business of insurance? (Cal. Code of Regs., tit. 10, § 2695.183(j).) Association of California Ins. Companies v. Jones, S226529 (opinion below B248622, formerly at 235 Cal.App.4th 1009). Review was granted 7/13/15.  Update 9/8/16: Oral argument scheduled for 10/5/16. Update 9/14/16: Case is to be called and continued to November 2016 calendar.  Update 10/5/16: Case called and continued. Update 10/6/16: Oral argument scheduled for 11/2/16. Update 10/12/16: Oral argument rescheduled for 11/1/16. The briefs are here.