Insurance Industry Practice

Charles S. Johnson, III has practiced extensively in the areas of regulatory and administrative law, antitrust and commercial litigation. Much of his administrative practice has involved the regulation of insurance, and much of his litigation practice has involved insurance issues.

Insurance Regulation

Mr. Johnson has served as Chair of the American Bar Association Committee on Insurance Regulation. His insurance regulation practice has included extensive representation of numerous insurance clients. This practice has included numerous formal hearings before the Georgia Insurance Department, appeals from such hearings, and informal conflict resolution. Examples include the following:

Workers Compensation Examination. The Georgia Insurance Department performed a Workers Compensation Examination regarding an insurance client, in which the examiner noted difficulties in obtaining information from the company. Many of the documents which were requested by the Department’s examiner related to workers’ compensation coverages in Georgia which represented incidental exposures on the Company in other states. Because of the manner in which these documents were dispersed throughout the company, it was difficult to retrieve some of these files prior to the examiner’s submission of his report to the commissioner. Based on the examiner’s report, the Department tentatively concluded that the client had refused to cooperate with the examiner. Mr. Johnson contested this conclusion and requested a hearing before an impartial hearing examiner. He met and talked with Department representatives on numerous occasions to explain the Company’s efforts to cooperate with the examiner. He explained the understanding that, after the examiner’s report had been submitted, the Company had been led to believe that the Department’s examination had been completed, and that it was under no further obligation to produce further documents after that time. Following these meetings, the Company promised that, when an examiner asks for information, the Company will provide it. Thereafter, the Department deleted all references in the examination report to violations of Georgia law and further indicated its intention to take no further enforcement action against the Company.

Rate Examination. Several member companies of a client’s insurance group filed with the Georgia Insurance Department a proposed rate modification to their private passenger automobile insurance policies which would produce an aggregate rate increase in excess of ten percent within any twelve month period. The Commissioner ordered an examination of these filings to ascertain, among other things, the accuracy of the data offered in support of the rate increase proposal. The report of examination did not suggest that the proposed rates were excessive or inadequate or that a reasonable degree of competition was absent in the effected areas and classifications. The Department indicated that it was unable to accept the filing as proposed and requested that the filing be withdrawn and refiled as required under Senate Bill 110, which had recently passed both houses of the General Assembly but not yet been signed by the Governor. When the client requested clarification of the Department’s findings, the Department indicated that it intended to hold a hearing on the filings. The Notice of Hearing inaccurately indicated that the hearing had been requested by the insurer. Mr. Johnson prepared the insurer’s response to the Notice of Hearing, which initiated a demand for full pre-hearing discovery and challenged the substance of the Notice of Hearing. The Commissioner issued a directive ordering that all motor vehicle insurers comply with Senate Bill 110, and the Commissioner further notified the client that failure to withdraw and refile would be treated as willful noncompliance. Mr. Johnson gave notice that the client was withdrawing its rate filing and intended to refile it. Thereafter, the Department’s file was closed.

Market Conduct Examination. An insurance company client filed its homeowners insurance rates as part of a composite filing for several companies within its combined insurance group. The complexity of the composite filing, together with a number of erroneous cross-references, led the Insurance Department to conclude that the client had, in essence, not filed its rates. A hearing was scheduled on the filings. Prior to any hearing taking place, Mr. Johnson met with various members of the Department’s staff and explained the filing to them, showed that the client’s rates had been filed in a manner which could be understood, argued that the Department’s objection was untimely, and further argued that the Commissioner was not authorized to require a penalty or refund of premiums for a rate which (although filed) is imperfect. At the Department’s request, the client subsequently submitted corrections to its exhibit books with explanations, confirmed that some of the confusion had been eliminated, forwarded an independent review of the filing, forwarded a rollback impact statement, and argued the adequacy of the client’s filing. The Department’ Report of Examination was subsequently revised to show that, although there was difficulty in finding the rates, the rates nevertheless had been filed. The client thereafter withdrew its request for a hearing and negotiated a Consent Order regarding the trend errors disclosed in the report. Mr. Johnson provided an analysis of the Department’s proposed fines, which enabled the company to make a decision as to the level of fines which it considered to be acceptable.

Other Matters

Mr. Johnson participated in the successful defense of a Georgia domestic insurer against the Department’s proposed revocation of its certificate of authority arising out of questions concerning the adequacy of the company’s “home office” staff and operations.

Mr. Johnson participated in the representation of a major Connecticut-based property and casualty company in connection with its efforts to withdraw or wind down its personal lines business in Georgia.

Mr. Johnson represented a major national funeral service and cemetery company and its wholly-owned insurance company in efforts to obtain insurance Department approval for its life insurance-funded pre-need funeral arrangements. This representation involved extensive hearings within the department, followed by an appeal to the Superior Court of Fulton County.

Mr. Johnson successfully obtained a Georgia certificate of authority and other regulatory clearances for a major international company's variable life product line.

Mr. Johnson successfully obtained Georgia certificates of authority and other regulatory clearances for a third-party administrator and for a preferred provider organization .

Mr. Johnson represented numerous agents with respect to licensing issues.

Mr. Johnson represented a group of companies whose practices were the subject of a major investigation of insurance fraud by the Permanent Investigations Subcommittee of the U.S. Senate Government Operations Committee.

Insurance-Related Litigation

Mr. Johnson has represented a major insurance group in connection with claims seeking to recover additional premium owed by insureds as the result of audits of their residual market assigned-risk workers compensation and truckers insurance coverage.

Mr. Johnson served as antitrust counsel a major insurance rating agency in the defense of antitrust counterclaims arising from a civil RICO lawsuit by the agency and various servicing carriers alleging premium and underwriting fraud by an employee leasing company. This representation included the preparation of an extensive summary judgment package, involving a survey of the regulatory environments of four New England States, seeking rulings with respect to the state action, McCarran, and Noerr defenses.

Mr. Johnson successfully represented ten companies, against whom the Georgia Insurance Department had obtained an injunction prohibiting their conducting any business, in setting aside the injunction.

Mr. Johnson represented the purchasers of a computer software company in the arbitration against a major insurer in connection with the insurer’s alleged breach of warranties and representations in the acquisition agreement.

Mr. Johnson represented numerous insurers and agents in connection with claims asserted by and against the Commissioner in his capacity as receiver for various insolvent insurance companies.

Mr. Johnson represented the Ohio owner of an insolvent Georgia insurer in asserting its claims against the receiver and defending the receiver’s RICO claims.

Mr. Johnson represented a New Jersey agent who, following the insolvency of a Georgia insurer, secured a new insurer to provide coverage, and transmitted to the new insurer premiums which were earned prior to the insolvency. This dispute involved arbitration proceedings against the receiver, proceedings to confirm the arbitration award, and a federal interpleader proceeding involving the Georgia receiver and the substitute carrier.

Mr. Johnson has litigated issues arising under life insurance policies, including “death before contract” issues.