News & Resources

MALLORY L. GOLD received her B.S. degree in 2007 from Pennsylvania State University and her J.D. (summa cum laude; Order of the Coif) from the University of Miami School of Law in 2011. While in law school, Ms. Gold served as an editor of the University of Miami Law Review, a Dean’s Fellow in Contracts, Civil Procedure, and Constitutional Law, and a judicial intern for the Honorable Linda Ann Wells, Third District Court of Appeal. Ms. Gold concentrates her practice in the areas of insurance coverage and bad faith litigation.

The chairman of the board of Citizens Property Insurance Co., Florida’s state-backed insurer, spoke to a roomful of state officials earlier this week. He brought with him 31 new proposals for steps the over-burdened insurance company can take to reduce its exposure, but he also brought the same message the company has delivered throughout the process: Not much will change without a serious overhaul of public policy.

We are continuing our discussion of a study scheduled to be published in January. The researcher, a law school professor, looked at policies from the top 10 insurance groups in six states. (Florida was not one of them.) What he found was that some of the big insurance companies use policy language that is “systematically less generous” than the language used in the once-standard Insurance Services Office policy.

Most Florida homeowners are probably more familiar than they want to be with shopping for insurance. Indeed, in this state, a homeowner may just be grateful that he has a choice. It’s a safe bet that the choice comes down to price, too — premium and deductible, especially in a tight market, tend to outweigh the fine print of the insurance policy. It’s just the standard stuff you find in homeowner policies, right?

As Florida homeowners track arguments between the state and Citizens Property Insurance Co. over sinkhole coverage, they are keeping an eye on Washington. Last week, the National Flood Insurance Program was granted a reprieve — its second since the program officially expired in September. This extension will last another few weeks, at which point debates over coverage for wind and water damage will likely be postponed until 2012.

When Florida Governor Rick Scott threw down the gauntlet a couple of weeks ago, he expected the board of Citizens Property Insurance Company to come back with strategies that would help the company trim its budget and grow its reserve. The state-backed insurer may have taken the governor and the Legislature by surprise when it came back earlier than expected with requests for legislative action.

Two weeks ago, Florida’s governor asked the board of Citizens Property Insurance Company to get its house in order. Concerned that the state’s insurer of last resort would not be able to meet the financial demands of a major storm, the governor chastised Citizens’ management team for allowing the company to become so large without safeguarding its financial stability.

We have been talking about business insurance. The passage of the Dodd-Frank Act in 2010 changed the landscape for businesses — especially financial services companies — by instituting a de facto incentive for whistleblowers. The heightened risk of an investigation, initiated by an internal complaint or a regulatory inquiry, should prompt business to review their insurance policies. The directors and officers coverage of the old days may not be enough.

We are continuing our discussion of the impact of the Dodd-Frank Act on business insurance. The law includes protections and incentives for whistleblowers that may very well result in internal and regulatory investigations. Even if there is no wrongdoing, the costs of these investigations will likely be steep. Companies, then, will want to review their insurance policies, particularly their directors and officers coverage.

In the wake of the financial meltdown, mortgage servicing companies and lenders, banks and brokerage houses, any business that had anything to do with the securitization debacle suddenly became the object of intense regulatory scrutiny. Every investigation poses a risk to the company and its directors and officers. Enron is just one example.