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HomeNewsArchivesLLOYD'S LOSES BID TO PUT MORATORIUM ON HOLD

LLOYD'S LOSES BID TO PUT MORATORIUM ON HOLD

Jan. 11, 2002 – Territorial Court Judge Rhys Hodge on Thursday denied a request by Lloyd's insurance underwriters to nullify Lt. Gov. Gerard Luz James II's moratorium on the cancellation or non-renewal of property insurance policies.
The judge stated in his order that Lloyd's may be correct that the lieutenant governor overstepped his authority when he ordered the moratorium on Dec. 19 but that the public's interest in maintaining a stable insurance market is more important.
"Because the public interest in maintaining a competitive and well-regulated insurance market outweighs the short-term injuries on insurance providers, plaintiff's motion is denied," Hodge wrote. "The injuries that Lloyd's complains of are theoretical legal grievances only, while the injuries that may be inflicted on the citizens of the Virgin Islands are very real issues of financial security."
Although Hodge denied the Lloyd's motion for a temporary restraining order, a preliminary injunction and a stay of James's order, the judge scheduled a hearing for Tuesday, Jan. 15, to hear arguments on whether James acted legally in ordering the temporary moratorium on the cancellation of property insurance policies.
Earlier this month, Lloyd's underwriters sued James over the moratorium, saying that he overstepped his authority as commissioner of insurance. Lloyd's stated that James's decision was not based on actuarial evidence, and that the moratorium would force insurance carriers to renew policies that put the carriers at financial risk.
James ordered the moratorium retroactive to Dec. 1, stating that certain insurance companies had not cooperated with his office in providing actuarial data to back up their requests for insurance rate increases.
James also stated at the time that some companies had threatened to begin canceling insurance policies if they did not receive the rate increases. At the time his office was considering the requests for rate increases, James said, he also was receiving complaints that residents could not get affordable property insurance.
The lieutenant governor set the moratorium to last until June 3, and he scheduled a hearing for Jan. 29 to look at issues surrounding the proposed rate increases. He stated that the moratorium would prevent cancellation or non-renewal of policies until his office could make the decision on the rate increases, as well as investigate whether any companies were attempting unlawfully to control insurance rates.
In the court ruling he signed Thursday, Hodge said it appeared that Lloyd's might be right in claiming that James overstepped his statutory authority in imposing the moratorium. But the judge went on to say that the public had an interest in keeping a stable insurance market, and the insurance carriers would not be severely damaged by waiting for hearings to resolve the matter.

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Jan. 11, 2002 – Territorial Court Judge Rhys Hodge on Thursday denied a request by Lloyd's insurance underwriters to nullify Lt. Gov. Gerard Luz James II's moratorium on the cancellation or non-renewal of property insurance policies.
The judge stated in his order that Lloyd's may be correct that the lieutenant governor overstepped his authority when he ordered the moratorium on Dec. 19 but that the public's interest in maintaining a stable insurance market is more important.
"Because the public interest in maintaining a competitive and well-regulated insurance market outweighs the short-term injuries on insurance providers, plaintiff's motion is denied," Hodge wrote. "The injuries that Lloyd's complains of are theoretical legal grievances only, while the injuries that may be inflicted on the citizens of the Virgin Islands are very real issues of financial security."
Although Hodge denied the Lloyd's motion for a temporary restraining order, a preliminary injunction and a stay of James's order, the judge scheduled a hearing for Tuesday, Jan. 15, to hear arguments on whether James acted legally in ordering the temporary moratorium on the cancellation of property insurance policies.
Earlier this month, Lloyd's underwriters sued James over the moratorium, saying that he overstepped his authority as commissioner of insurance. Lloyd's stated that James's decision was not based on actuarial evidence, and that the moratorium would force insurance carriers to renew policies that put the carriers at financial risk.
James ordered the moratorium retroactive to Dec. 1, stating that certain insurance companies had not cooperated with his office in providing actuarial data to back up their requests for insurance rate increases.
James also stated at the time that some companies had threatened to begin canceling insurance policies if they did not receive the rate increases. At the time his office was considering the requests for rate increases, James said, he also was receiving complaints that residents could not get affordable property insurance.
The lieutenant governor set the moratorium to last until June 3, and he scheduled a hearing for Jan. 29 to look at issues surrounding the proposed rate increases. He stated that the moratorium would prevent cancellation or non-renewal of policies until his office could make the decision on the rate increases, as well as investigate whether any companies were attempting unlawfully to control insurance rates.
In the court ruling he signed Thursday, Hodge said it appeared that Lloyd's might be right in claiming that James overstepped his statutory authority in imposing the moratorium. But the judge went on to say that the public had an interest in keeping a stable insurance market, and the insurance carriers would not be severely damaged by waiting for hearings to resolve the matter.