Douglass v. Nationwide Mutual Insurance

Robert L. Brown, Justice.

This appeal by Lee Douglass, Commissioner of the Arkansas Insurance Department, and the Arkansas Insurance Department itself (collectively referred to as Department), focuses on whether an insurance company may unilaterally rescind coverage based on fraud or material misrepresentations by the insured after a loss has occurred, when no third-party claims are involved. According to a Memorandum of Decision and Declaratory Order by the Department, rescission by an insurance company may only transpire when the company (1) seeks declaratory relief from a court of competent…