Corporate and Financial Weekly Digest - May 11, 2012

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In this issue:

- SEC Reopens Comment Period for Proposed Amendments to Broker-Dealer Financial Responsibility and Related Rules

- NASDAQ Proposes to Institute an Excess Order Fee

- Second Amendment to Effective Date for Swap Regulation

- CFTC Issues Draft of 2012 Rulemaking Schedule

- Financial Statements and Settlement Negotiations of Cooperating Witnesses in SEC Action Not Discoverable by Defendants

- State Claims Related to Renewal of FEMA “Write Your Own” Floor Insurance Programs are Federally Preempted

An excerpt from "State Claims Related to Renewal of FEMA “Write Your Own” Floor Insurance Programs are Federally Preempted"

The U.S. Court of Appeals for the Fifth Circuit last week held that any state claim related to the Federal Emergency Management Agency’s (FEMA) “Write Your Own” (WYO) flood insurance program is preempted by federal law if it is based on events which took place while the insured was already covered. The plaintiff, James Grissom, purchased WYO flood insurance from Liberty Mutual, and alleged that, when he applied for renewal, Liberty Mutual failed to disclose that the plaintiff was eligible for a preferred rate policy. Liberty Mutual defended that the plaintiff’s negligent misrepresentation claim was preempted by the National Flood Insurance Act, which establishes WYO insurance. WYO allows private insurers to issue flood insurance policies in their own names, underwritten by the Federal government. FEMA regulations govern the methods by which these carriers adjust and pay claims.

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