Mr. Shanman: Edwards & Angell was founded in Providence, Rhode Island, more than a century ago. It has developed over the years into a national law firm with more than 300 lawyers and offices in Providence, Boston, Hartford, Stamford, New York, Short Hills, West Palm Beach and Fort Lauderdale. The firm is a full service law firm, with a major focus on financial services and technology. We do a great deal of work in the insurance and banking industries and, in addition, have major practice concentrations in the corporate, private equity, litigation, intellectual property, real estate and environmental areas, among others.
TWST: In the insurance arena itself, what are some of the key areas of
contention today or those that are perhaps attracting the most attention
or litigation?
Mr. Shanman: Edwards & Angell has an insurance and reinsurance
department that has approximately 50 people in it. We do virtually
everything in insurance and reinsurance, from M&A work to regulatory
work to product development to reinsurance on both the contentious and
transactional sides to coverage and claims. So we see most of what's
there. Obviously, the last several years have included a fair amount of
turmoil for the industry. It's certainly my perception that litigation
continues to grow and that disputes within the industry, particularly on
the reinsurance side, continue to grow. Reinsurance disputes used to be
relatively rare ' they're much less so now. The amounts in issue have
gone up very substantially. I can remember a time not too long ago, not
even 10 years ago, when a $1 million reinsurance dispute was a pretty
hefty dispute. Unfortunately, it's not so unusual anymore. Obviously,
it's important to the parties who are involved in it when it's their $1
million, but the fact is that we're seeing much larger disputes.
Conversely, we're seeing much smaller disputes because there is a
disposition, at least among some companies, to fight over amounts that
people wouldn't have fought over even a few years ago. Another trend is
that while litigation over claims and coverage issues ' particularly
involving asbestos and toxic torts and similar issues ' continues to
increase, there is a significant push to come up with some global
mechanism to resolve those kinds of issues. They continue to be a very
serious problem, not only for the industry, but also for the economy as
a whole. I seem to remember about 20 years ago somebody saying, 'We'll
get through this asbestos stuff and some day we'll all look back and
this will be resolved.' Well, it still hasn't been resolved and it's
obviously a huge drain on society, not to mention the industry. So I
see a trend of continuing efforts to push for some sort of global
asbestos resolution, but I don't think it has happened yet. There are
some smaller initiatives to restrict class actions and to restrict
medical malpractice liability, something that most everyone is probably
familiar with. Those don't seem to have gone very far yet, and certainly
nothing has been resolved. On the regulatory side, there are a number of
issues. Some of them are very technical, but one that continues to
attract a lot of attention is the issue of federal regulation versus
state regulation. It's an issue that has been around for some time.
There continues to be pressure in some quarters to federalize or partly
federalize insurance regulation. There's also a lot of opposition to it.
Whether it's coming or not, it doesn't appear to be coming in the next
day or two, although people have been saying for a number of years that
it's just around the corner. Another issue that I see as a growing
source of controversy is the power of rating agencies. There are a few
major rating agencies and their role has always been very important, but
it has become more and more important as the industry has encountered
more problems. There is a certain amount of complaint because the rating
agencies themselves, which have tremendous power, are largely
unregulated. Ratings mean a great deal more than they did 10 or 15
years ago, and there are certainly companies that have been downgraded
and had their business seriously affected by ratings downgrades. That
isn't by any means the fault of the rating agencies, but it has raised
concerns. Certainly companies that have been the subjects of those
downgrades have from time to time expressed those concerns quite
strongly. My remarks are not meant to criticize the rating agencies, but
simply to point out that this is an emerging issue, at least for some.
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