9 Search Results

December 2, 2016 |
Gewährleistungsversicherungen beim Unternehmenskauf sind in der Praxis angekommen

​Munich partner Ferdinand Fromholzer is the author of "Gewährleistungsversicherungen beim Unternehmenskauf sind in der Praxis angekommen" [PDF]. This commentary, published in issue 48, dated December 2, 2016, of the German publication Der Betrieb, focuses on the increased acceptance of warranty and indemnity insurances in the practice of M&A transactions.

October 22, 2015 |
Ownership and Control of Indian Insurance Companies with Foreign Investment

​This client alert is supplemental to our client alert dated March 11, 2015. In the March alert, we had advised that the Indian government had increased the ceiling on foreign investment in an Indian insurance company to 49% of its total outstanding share capital. Of this foreign investment ceiling of 49%, 26% is permitted under the automatic route (i.e., without the prior approval of the Indian government). Foreign investment above 26% and up to 49% requires the prior approval of the Indian government. In addition, we had reported that prior approval of the Insurance Regulatory and Development Authority ("IRDA") is required in all circumstances where there is any change in shareholding of an Indian insurance company. However, the ownership and control of an Indian insurance company must remain in the hands of resident Indians at all times. The [Indian] Insurance Act, 1938 was also amended in March, 2015 to define "control" to mean the right to appoint a majority of the directors on the board of the company or the power to control the management or policy decisions of a company by virtue of shareholding, management rights, shareholders agreements or voting rights agreements. On October 19, 2015, the IRDA issued the "Guidelines on Indian Owned and Controlled" Insurance Companies (the "Guidelines") to further clarify the requirements with regard to Indian ownership and control of Indian insurance companies. The Guidelines apply to all Indian insurance companies that receive foreign investment. Indian insurance companies that already have foreign investment must comply with the Guidelines within the next three months. Key Highlights The following are some of the key provisions of the Guidelines:  Criteria for Control: The Guidelines reiterate that control may be exercised on an Indian insurance company by means of (a) shareholding, (b) management rights, (c) shareholder agreements, (d) voting agreements and (e) any other manner as may be defined by applicable law.   Management & Policies: The Guidelines mandate that Indian shareholder(s) of Indian insurance companies must have control over the formulation of "significant policies" and the overall management of the company, subject to approval of the Board of Directors (the "Board") constituted in the manner described below.  Board: The Indian shareholder(s) must, at all times, have the right to nominate a majority of the directors on the Board, excluding independent directors. If the Chairman of the Board has a casting vote, he or she should be nominated by the Indian shareholder(s). While the Guidelines state that the presence of the majority of the Indian shareholder(s)’ nominees on the Board constitutes a valid quorum for a meeting of the Board, they also clarify that a foreign investor’s right to require its nominee director’s presence for constituting the valid quorum for a Board meeting will not constitute control by the foreign investor. Key Management Personnel:  The Chief Executive Officer or Managing Director cannot be a nominee of the foreign investor and can only be appointed by the by the Indian shareholder(s) or the Board (now controlled by the Indian shareholder(s)). While other key management personnel may be nominated by the foreign investor, such appointment will still be subject to the approval of the Board.   Reporting Requirements: Indian insurance companies with foreign investment are required to amend any existing shareholder agreements to ensure conformity with these Guidelines. Additionally, the Chief Executive Officer or the Chief Compliance Officer of such insurance company is required to file with the IRDA a signed undertaking and a copy of the resolution of the Board of the company confirming that these Guidelines have been complied with by the Company.   Given the requirements of the Guidelines, shareholder and other rights of foreign investors in Indian insurance companies will need to be structured appropriately to ensure that the IRDA does not consider such rights as providing control to the foreign investor.   Gibson, Dunn & Crutcher lawyers are available to assist in addressing any questions you may have regarding these issues. For further details, please contact the Gibson Dunn lawyer with whom you usually work or the following lawyers in the firm’s Singapore office: Jai S. Pathak (+65 6507 3683, jpathak@gibsondunn.com)Priya Mehra (+65 6507 3671, pmehra@gibsondunn.com)Bharat Bahadur (+65 6507 3634, bbahadur@gibsondunn.com)Karthik Ashwin Thiagarajan (+65 6507 3636, kthiagarajan@gibsondunn.com)Sidhant Kumar (+65 6507 3661, skumar@gibsondunn.com)  © 2015 Gibson, Dunn & Crutcher LLP Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.   

October 1, 2015 |
The Next Frontier in Sanctions Enforcement

​Washington D.C. of counsel Adam Smith is the author of "The Next Frontier in Sanctions Enforcement" [PDF] published in the October – December issue of  Risk & Compliance Magazine

August 3, 2015 |
RICO Suits Challenge Off-Label Drug Marketing

​Denver associate John D.W. Partridge is the co-author of "RICO Suits Challenge Off-Label Drug Marketing" [PDF] published on August 3, 2015 by Law360.

March 11, 2015 |
Indian Government Permits 49% Foreign Investment in the Insurance Sector

The following Gibson Dunn alert, which originally was distributed on March 9, has been updated to reflect recent developments announced by the Indian Government. The Government of India had recently promulgated the Insurance Laws (Amendment) Ordinance, 2014, dated December 26, 2014 ("Ordinance"), which substantially amended the existing Insurance Act, 1938, including in relation to foreign investment in Indian insurance companies. The Indian Insurance Companies (Foreign Investment) Rules 2015, dated February 19, 2015 ("Rules") issued pursuant to the Ordinance further provided for the modalities of foreign investment in Indian insurance companies. Accordingly, pursuant to the Ordinance and the Rules, the foreign direct investment policy of the Government of India ("FDI Policy") has now been amended by Press Note 3, dated March 2, 2015 ("PN3"), to permit increased foreign investment in Indian insurance companies and to make the FDI Policy consistent with the Ordinance and the Rules. Prior to the Ordinance, the Insurance Act, 1938 imposed an aggregate ceiling of 26% on foreign investment ownership in an Indian insurance company.  Key Amendments The following are the key amendments promulgated by the Ordinance, Rules and PN3, in relation to foreign investment ownership in Indian insurance companies: Total foreign investment ownership through any means, including portfolio investment, in an Indian insurance company (which includes insurance brokers, insurance third party administrators, surveyors and loss assessors), directly or indirectly (through one or more holding companies) cannot exceed 49%. Aggregate foreign investment ownership up to 26% is permitted under the automatic route (i.e., without the prior approval of the Government of India). Foreign investment beyond 26% and up to 49% requires the prior approval of the Foreign Investment Promotion Board of the Government of India. In addition, prior approval of the Insurance Regulatory and Development Authority will continue to be required in all circumstances where there is any change in shareholding of an Indian insurance company. The ownership and control of an Indian insurance company must remain in the hands of resident Indians at all times. "Control" has been defined under the Ordinance to mean the right to appoint a majority of the directors on the board of the company or the power to control the management or policy decisions of a company by virtue of shareholding, management rights, shareholders agreements or voting rights agreements. In order to remain legally binding and effective, the Ordinance must be approved by both houses of the Indian Parliament within six weeks of the assembly of the Indian Parliament (i.e., the first week of April 2015), failing which the Ordinance will lapse. Any action taken prior to the lapsing of the Ordinance will remain valid. We note that the Indian Government has recently introduced a bill (substantially similar to the Ordinance) in the Indian Parliament to replace the Ordinance. While this bill has been passed by the Lok Sabha — the lower house of the Indian Parliament, the bill is currently pending before the Rajya Sabha — the upper house of the Indian Parliament.          Gibson, Dunn & Crutcher lawyers are available to assist in addressing any questions you may have regarding these issues. For further details, please contact the Gibson Dunn lawyer with whom you usually work or the following lawyers in the firm’s Singapore office: Jai S. Pathak (+65 6507 3683, jpathak@gibsondunn.com)Priya Mehra (+65 6507 3671, pmehra@gibsondunn.com)Bharat Bahadur (+65 6507 3634, bbahadur@gibsondunn.com)Karthik Ashwin Thiagarajan (+65 6507 3636, kthiagarajan@gibsondunn.com)  © 2015 Gibson, Dunn & Crutcher LLP Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

March 11, 2015 |
Indian Government Permits 49% Foreign Investment in the Insurance Sector

The following Gibson Dunn alert, which originally was distributed on March 9, has been updated to reflect recent developments announced by the Indian Government. The Government of India had recently promulgated the Insurance Laws (Amendment) Ordinance, 2014, dated December 26, 2014 ("Ordinance"), which substantially amended the existing Insurance Act, 1938, including in relation to foreign investment in Indian insurance companies. The Indian Insurance Companies (Foreign Investment) Rules 2015, dated February 19, 2015 ("Rules") issued pursuant to the Ordinance further provided for the modalities of foreign investment in Indian insurance companies. Accordingly, pursuant to the Ordinance and the Rules, the foreign direct investment policy of the Government of India ("FDI Policy") has now been amended by Press Note 3, dated March 2, 2015 ("PN3"), to permit increased foreign investment in Indian insurance companies and to make the FDI Policy consistent with the Ordinance and the Rules. Prior to the Ordinance, the Insurance Act, 1938 imposed an aggregate ceiling of 26% on foreign investment ownership in an Indian insurance company.  Key Amendments The following are the key amendments promulgated by the Ordinance, Rules and PN3, in relation to foreign investment ownership in Indian insurance companies: Total foreign investment ownership through any means, including portfolio investment, in an Indian insurance company (which includes insurance brokers, insurance third party administrators, surveyors and loss assessors), directly or indirectly (through one or more holding companies) cannot exceed 49%. Aggregate foreign investment ownership up to 26% is permitted under the automatic route (i.e., without the prior approval of the Government of India). Foreign investment beyond 26% and up to 49% requires the prior approval of the Foreign Investment Promotion Board of the Government of India. In addition, prior approval of the Insurance Regulatory and Development Authority will continue to be required in all circumstances where there is any change in shareholding of an Indian insurance company. The ownership and control of an Indian insurance company must remain in the hands of resident Indians at all times. "Control" has been defined under the Ordinance to mean the right to appoint a majority of the directors on the board of the company or the power to control the management or policy decisions of a company by virtue of shareholding, management rights, shareholders agreements or voting rights agreements. In order to remain legally binding and effective, the Ordinance must be approved by both houses of the Indian Parliament within six weeks of the assembly of the Indian Parliament (i.e., the first week of April 2015), failing which the Ordinance will lapse. Any action taken prior to the lapsing of the Ordinance will remain valid. We note that the Indian Government has recently introduced a bill (substantially similar to the Ordinance) in the Indian Parliament to replace the Ordinance. While this bill has been passed by the Lok Sabha — the lower house of the Indian Parliament, the bill is currently pending before the Rajya Sabha — the upper house of the Indian Parliament.          Gibson, Dunn & Crutcher lawyers are available to assist in addressing any questions you may have regarding these issues. For further details, please contact the Gibson Dunn lawyer with whom you usually work or the following lawyers in the firm’s Singapore office: Jai S. Pathak (+65 6507 3683, jpathak@gibsondunn.com)Priya Mehra (+65 6507 3671, pmehra@gibsondunn.com)Bharat Bahadur (+65 6507 3634, bbahadur@gibsondunn.com)Karthik Ashwin Thiagarajan (+65 6507 3636, kthiagarajan@gibsondunn.com)  © 2015 Gibson, Dunn & Crutcher LLP Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

July 31, 2013 |
Current Issues in Director and Officer Indemnification and Insurance

Washington, D.C. partner John Olson, New York partner Jonathan Dickey, Washington, D.C. partner Amy Goodman and Washington, D.C. of counsel Gillian McPhee are authors of “Current Issues in Director and Officer Indemnification and Insurance” [PDF] published in the July 2013 issue of Insights.

March 20, 2013 |
U.S. Supreme Court Prevents Class Action Plaintiffs from Evading Federal Jurisdiction under CAFA

On March 19, 2013, the U.S. Supreme Court unanimously held that a putative class representative may not evade federal jurisdiction under the Class Action Fairness Act of 2005 ("CAFA") by attempting to stipulate that the class will not seek to recover more than $5 million.  In an opinion authored by Justice Breyer in Standard Fire Insurance Co. v. Knowles, No. 11-1450, the Court held that a named plaintiff cannot bind absent members of the proposed class before the class is certified, and therefore cannot unilaterally limit the claims of the absent class members.  Greg Knowles filed a putative class action in Arkansas state court against the Standard Fire Insurance Company, alleging that Standard Fire had underpaid general contractor fees in repairs covered by homeowners’ insurance policies.  Knowles sought to certify a class of Arkansas policyholders and attached an affidavit to the complaint stipulating that he would "not at any time during this case . . . seek damages for the class . . . in excess of $5,000,000 in the aggregate." Standard Fire removed the case to federal district court under CAFA, arguing that the amount in controversy exceeded CAFA’s $5 million amount-in-controversy requirement.  Although the district court found that the amount in controversy would have been above the $5 million threshold absent the stipulation, it remanded the case to state court in light of the stipulation.  Standard Fire petitioned for permission to appeal the remand order, but the Eighth Circuit declined to hear the appeal.  The Supreme Court granted Standard Fire’s petition for a writ of certiorari and, after briefing and argument, unanimously reversed the remand order.  The Court explained that the lower courts "should have ignored the stipulation" altogether (slip op. at 7), because "a plaintiff who files a proposed class action cannot legally bind members of the proposed class before the class is certified."  Id. at 4 (citing Smith v. Bayer Corp., 131 S. Ct. 2368, 2380 (2011)).  The Court rejected Knowles’s argument that class action plaintiffs, as "masters of their complaints," can "avoid removal to federal court . . . by stipulating to amounts at issue that fall below the federal jurisdictional requirement."  Id. at 6-7.  Although that is true for individual plaintiffs, a stipulation in the class-action setting "does not resolve the amount-in-controversy questions in light of [the named plaintiff’s] inability to bind the rest of the class."  Id. at 7.  The Court further explained that, by its plain terms, CAFA provides that "the claims of the individual class members shall be aggregated" to determine whether jurisdiction exists.  Id. at 3 (quoting 28 U.S.C. § 1332(d)(6)).  Thus, "the statute tells the District Court to determine whether it has jurisdiction by adding up the value of the claim of each person who falls within the definition of Knowles’ proposed class and determine whether the resulting sum exceeds $5 million. If so, there is jurisdiction and the court may proceed with the case."  Id. at 3.  To hold otherwise," the Court explained, "would, for CAFA jurisdictional purposes, treat a nonbinding stipulation as if it were binding," thereby permitting the "subdivision of a $100 million action into 21 just-below-$5-million state-court actions"–a result that would "squarely conflict with the statute’s objective" of "ensuring ‘Federal court consideration of interstate cases of national importance.’"  Id. at 6.  The Court’s decision is of great importance for defendants targeted by class actions in plaintiff-friendly state-court jurisdictions, particularly "magnet" jurisdictions like Miller County, Arkansas.  The decision enforces the clear provisions of CAFA and sends a strong message that jurisdictional manipulations by class-action plaintiffs’ lawyers will not succeed.  In enacting CAFA, Congress sought to ensure that sizeable interstate class actions are heard in federal court, where Rule 23 provides uniform class-certification standards and affords defendants with important due process protections.  After the Knowles decision, plaintiffs will no longer be able to evade federal courts and subject defendants to the abuses of certain state courts that lack such protections by slicing and dicing class-action claims.  Gibson Dunn represented Standard Fire on the merits before the U.S. Supreme Court.  Theodore J. Boutrous, Jr. argued the case in the U.S. Supreme Court on January 7, 2013. Gibson, Dunn & Crutcher’s lawyers are available to assist in addressing any questions you may have about this development.  Please contact the Gibson Dunn lawyer with whom you work or the authors: Theodore J. Boutrous, Jr. – Los Angeles (213-229-7000, tboutrous@gibsondunn.com)Amir C. Tayrani – Washington, D.C. (202-887-3692, atayrani@gibsondunn.com) Theane Evangelis Kapur – Los Angeles (213-229-7726, tkapur@gibsondunn.com)Joshua S. Lipshutz – San Francisco (415-393-8233, jlipshutz@gibsondunn.com)Brandon J. Stoker – Los Angeles (213-229-7574, bstoker@gibsondunn.com) Please also feel free to contact any of the following practice group co-chairs: Appellate and Constitutional Law Practice Group:Theodore B. Olson – Washington, D.C. (202-955-8500, tolson@gibsondunn.com)Theodore J. Boutrous, Jr. – Los Angeles (213-229-7000, tboutrous@gibsondunn.com)Daniel M. Kolkey – San Francisco (415-393-8200, dkolkey@gibsondunn.com)Thomas G. Hungar - Washington, D.C. (202-955-8500, thungar@gibsondunn.com)Miguel A. Estrada – Washington, D.C. (202-955-8500, mestrada@gibsondunn.com) Class Actions Practice Group:Gail E. Lees – Los Angeles (213-229-7163, glees@gibsondunn.com)Andrew S. Tulumello – Washington, D.C. (202-955-8657, atulumello@gibsondunn.com)Christopher Chorba – Los Angeles (213-229-7396, cchorba@gibsondunn.com) © 2013 Gibson, Dunn & Crutcher LLP Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.

April 27, 2009 |
Supreme Court of California Exempts Life Insurance Products from Scope of California’s Consumers Legal Remedies Act

On April 20, 2009, the Supreme Court of California narrowed the scope of California’s Consumers Legal Remedies Act ("CLRA") by holding in a unanimous opinion that life insurance is not a "good" or "service" subject to the CLRA.  Fairbanks v. Superior Court (Farmers New World Life Ins. Co.), Case No. S157001. The plaintiffs in Fairbanks sought to bring a class action challenging the marketing and administration of Farmers’ New World Life Insurance Company’s ("FNWL") life insurance policies.  The trial court granted FNWL’s motion for judgment on the pleadings and ruled that the life insurance policies FNWL issued to the plaintiffs were neither "goods" nor "services," as those terms are defined in the CLRA.  The Court of Appeal agreed and affirmed the judgment.  The Supreme Court granted the plaintiffs’ petition for review to consider whether life insurance is a "good" or "service" under the CLRA.  The Court expressly declined to consider whether insurance, generally, may be within the scope of the CLRA, and its opinion "narrowed the issue to focus only on life insurance."   The Court began its analysis with the "unambiguous" statutory language of the CLRA.  Because life insurance "is a contract of indemnity" and not a "tangible chattel," the Court held that life insurance is not a "good" pursuant to the CLRA.  It also held that life insurance is not a "service" under the CLRA, because "[a]n insurer’s contractual obligation to pay money under a life insurance policy is not work or labor, nor is it related to the sale or repair of any tangible chattel."  While a thorough examination of the CLRA’s legislative history was unnecessary given this "unambiguous" statutory language that compelled affirmance, the Court explained that the legislative history "confirms our conclusion" that the CLRA "does not apply to life insurance."  The California Legislature based the CLRA on a model law (the National Consumer Act) that "expressly applied to insurance."  But because the California Legislature "omitted the reference to insurance in the definition of ‘services,’" this reflected "its intent not to treat all insurance as a service" as the CLRA uses that term.  Similarly, the Unruh Act, California Civil Code § 1801 et seq., which was in effect at the time the Legislature drafted the CLRA, defines "services" to include insurance.  The Legislature’s choice of a different definition for the term "service" in the CLRA is significant, the Court held, and this "supports an inference that a difference of meaning was intended."  The Court then rejected each of the plaintiffs’ arguments that the CLRA’s definition of "services" includes life insurance.  First, the Court rejected the plaintiffs’ reliance on a "broad dictionary definition of ‘service’" that would include life insurance, because the Legislature provided a specific definition that excluded life insurance.  Second, the Court dismissed the plaintiffs’ reliance on decisions from other jurisdictions, either because their statutory schemes differ from the CLRA or because the plaintiffs attempted to rely on dicta in those opinions.  Third, the Court held that Civil Code Section 1760’s command that the CLRA’s provisions "shall be liberally construed" only applies where "the statutory language is ambiguous and the intent of the enacting body is in doubt," but neither of these conditions applied here.  Fourth, the Court rejected the plaintiffs’ reliance on Insurance Code Section 1861.03(a), a law that voters enacted through Proposition 103 and that states that the "business of insurance" shall not be exempted from laws of general applicability.  The Court held that Proposition 103 does not apply to life insurance, and the CLRA is not a law of general applicability but rather a specifically and narrowly defined statute that "applies only to transactions for the sale or lease of consumer ‘goods’ or ‘services’ as those terms are defined in the [CLRA]."  Finally, and perhaps most significantly in terms of future litigation over the scope of the CLRA, the Court rejected the plaintiffs’ argument that the mere fact that FNWL’s agents and other employees provided "ancillary services" to policyholders somehow brought FNWL’s life insurance policies within the reach of the CLRA.  As the Court explained, "ancillary services are provided by the sellers of virtually all intangible goods," and to use "the existence of these ancillary services to bring intangible goods within the coverage of the [CLRA] would defeat the apparent legislative intent in limiting the definition of ‘goods’ to include only ‘tangible chattels.’" Aside from its specific discussion of the plaintiffs’ arguments regarding Proposition 103 (as noted above), there is nothing in the Fairbanks opinion to suggest that its reasoning should not apply to other forms of insurance.  In addition, the Court’s determination that ancillary services are insufficient to convert the life insurance policies into "goods" or "services" may have broader impact on other products such as securities, loans, and other intangible items.  At the very least, this decision represents another significant limitation on the CLRA, following the Court’s opinion earlier this year in Meyer v. Sprint Spectrum, Case No. S153846, in which it held that the plaintiff could not bring a "preemptive suit" to challenge allegedly unconscionable terms in a cellular phone agreement that the defendant service provider had not attempted to enforce. Gibson, Dunn & Crutcher’s Class Action and Complex Litigation Practice Group is available to assist in addressing any questions you may have regarding these issues.  Please contact the Gibson Dunn attorney with whom you work or any of the following: Class Action and Complex Litigation Practice Group Chair and Vice-ChairsGail E. Lees – Los Angeles (213-229-7163, glees@gibsondunn.com)Andrew S. Tulumello – Washington, D.C. (202-955-8657, atulumello@gibsondunn.com)G. Charles Nierlich – San Francisco (415-393-8239), gnierlich@gibsondunn.com)Christopher Chorba – Los Angeles (213-229-7396, cchorba@gibsondunn.com)Matthew S. Kahn – San Francisco (415-393-8212, mkahn@gibsondunn.com) © 2009 Gibson, Dunn & Crutcher LLP Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.