Stephen Burrow recently prevailed on behalf of the Mississippi Windstorm Underwriting Association (MWUA) before the United States Court of Appeals for the Fifth Circuit.
Facing massive losses after Hurricane Katrina, the MWUA was forced to assess its member-insurance companies to make up the difference. During that process, MWUA offered all its members the opportunity to submit corrected 2003 premium data ultimately used to calculate the reassessment to each member (aka a “true-up”). Greenwich represented to MWUA that its previously reported 2003 premium data was accurate. Only after MWUA invoiced Greenwich for its share of the reassessment, Greenwich took a closer look at its previously reported premium figures. Greenwich objected to the reassessment claiming it has misreported non-assessable federal crop insurance premiums as assessable “all lines” premiums. MWUA refused to allow Greenwich to submit revised premium data, thereby enforcing its deadline from the prior year to submit revised premium data.
Greenwich filed suit in U.S. District Court seeking a declaratory judgment MWUA’s enforcement of its deadline to submit corrected premium data was preempted by the Federal Crop Insurance Act (FCIA). Greenwich alleged the its previously reported premium data was in fact federal crop insurance premiums, which were not assessable by MWUA under the FCIA and its implementing regulations. In short, Greenwich claimed MWUA’s deadline and refusal to accept revised premium information from Greenwich a year after the “true-up” deadline, was preempted by federal law.
The U.S. District Court certified the question of preemption for an interlocutory appeal. The U.S. Court of Appeals for the Fifth Circuit held that MWUA’s enforcement of its true-up deadline was not preempted by federal law, because whatever conflict existed with federal law arose from Greenwich’s own actions, and not any act by MWUA.