Here are five cases and their impact on the insurance industry:

The U.S. Supreme Court in Washington, D.C. (Photo: Thinkstock)

1. Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc.

In Texas Dept. of Housing and Community Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. 2507 (2015), the U.S. Supreme Court surprised many by holding that disparate impact claims are cognizable under the Fair Housing Act (FHA). The FHA is a 1968 law that prohibits racial discrimination in the sale, rental and financing of homes. Although the FHA specifically outlaws practices with discriminatory intent, most federal appellate courts have also applied the FHA to practices with discriminatory outcomes.

Accordingly, a practice can be illegal if it disproportionately affects minorities, regardless of the intent, under a disparate impact theory. Inclusive Communities Project, Inc., a non-profit group advocating racial integration, alleged that Texas violated the FHA by disproportionately awarding housing tax credits to developers of properties in poor areas with large minority populations, rather than predominantly white suburban neighborhoods, thereby perpetuating segregated housing patterns.

In examining the history and enactment of the FHA, as well as other anti-discrimination statutes such as Title VII of the Civil Rights Act of 1964, the Supreme Court, in a 5-4 decision, concluded that Congress intended to permit housing discrimination claims even where there was no evidence of discriminatory intent. Therefore, a plaintiff can proceed with a discrimination claim based on the effects of a defendant's policies even if the defendant lacked intent to discriminate. The decision was a surprise, given that the Supreme Court, under Chief Justice John Roberts, has scaled back other civil rights laws, such as the Voting Rights Act.

This decision raises concerns for homeowner insurers that may now be liable for practices that are not intended to discriminate, but still have a disproportionately adverse effect on minority groups. In addition, applying the FHA to the homeowners' insurance marketplace could undermine existing state regulation. Further, federal agencies, which have garnered large settlements from lenders in discrimination challenges brought under a disparate impact theory, may now have an incentive to target insurers.

Related: Housing-discrimination lawsuits backed by U.S. Supreme Court

A crowd gathered outside the Supreme Court in Washington, D.C., on March 4, 2015, as the court heardarguments in King v. Burwell, which was a major test of President Barack Obama's health overhaul. (Photo: Pablo Martinez Monsivais/AP Photo)

2. King v. Burwell

The Obama administration declared a major victory when the Supreme Court ruled that millions of Americans were entitled to keep insurance tax subsidies in King v. Burwell, 135 S. Ct. 2480 (2015). The issue in King was whether low and middle class Americans who purchased health insurance through the federally operated Healthcare.gov marketplace were entitled to subsidies, given that the Affordable Care Act specified tax credits be provided only for marketplaces “established by the state.”

Writing for a 6-3 majority, Chief Justice Roberts noted that, despite the statute's ambiguous language, it was implausible for Congress to have intended to exclude residents of states that had not established exchanges. The decision was a relief to health insurers that were bracing for a monumental decline in customers and a sharp increase in premiums.

Related: King v. Burwell ruling good news for carriers

The California Supreme Court headquarters in San Francisco. (Photo: Wikimedia Commons)

3. Fluor Corp. v. Super. Ct.

In a victory for corporate policyholders, the California Supreme Court in Fluor Corp. v. Super. Ct., 61 Cal. 4th 1175 (2015), held that an anti-assignment clause in a liability policy does not bar coverage where the assignment occurred post-loss. This decision overturned the Court's prior decision, Henkel Corp. v. Hartford Accident & Indemnity Co., 29 Cal. 4th 934 (2003), which held that corporate successors were not entitled to recovery under an insurance policy assigned without the insurer's consent, even if the assignment was post-loss and therefore imposed no additional obligations on insurers.

The Court found that Henkel neglected to consider California Insurance Code § 520, a provision that was intended to avoid unjust enforcement of consent-to-assignment clauses. Fluor is a victory for corporate policyholders because it protects their ability to assign coverage rights to corporate successors. Further, California is now in line with a majority of jurisdictions that prohibit insurers from asserting anti-assignment clauses to avoid coverage for pre-assignment losses.

Related: What the Fluor Corp. ruling means for insurers

The U.S. District Court for Utah in Salt Lake City. (Photo: Wikimedia Commons)

4. Hartford Casualty Insurance Co. v. J.R. Marketing LLC

In Hartford Casualty Insurance Co. v. J.R. Marketing LLC, 61 Cal. 4th 998 (2015), the California Supreme Court was asked to weigh in on an insurer's ability to seek reimbursement of defense costs directly from a policyholder's independent counsel. In this case, the Hartford had been directed by a court enforcement order to pay the legal fees of its policyholder, J.R. Marketing LLC, under a reservation of rights, in a third-party action.

The Hartford argued it was entitled to reimbursement of fees and services beyond the enforcement order to the extent that the costs were “abusive, excessive, unreasonable or unnecessary.” The trial court ruled in favor of Squire Sanders, the policyholder's independent counsel, that the Hartford could not pursue a claim for reimbursement directly against a non-insured. The Court of Appeal affirmed the trial court's decision.

On further appeal, the California Supreme Court reversed the decision, holding that the Hartford could sue Squire Sanders directly. Although the Court noted that its findings were limited to the unusual facts of the case, this case has raised discussion among insurers about whether they can now successfully argue that reimbursement actions can be asserted directly against independent counsel. Such actions would likely be opposed vigorously by the defense bar, which will argue that an independent counsel's duty to zealously advocate on behalf of its client, the policyholder, would be negatively impacted if the costs associated with its legal strategy could be contested by the insurer.

Related: Reservation of rights: Harsh consequences for getting it wrong

Travelers was involved in a Cyber insurance case that did not involve a data breach. (Photo: Ann Heisenfel/AP Photo)

5. Travelers Property Casualty Co. of America et al. v. Federal Recovery Services

In Travelers Property Casualty Co. of America et al. v. Federal Recovery Services, 2015 WL 2201797 (D. Utah May 11, 2015), a Utah federal court issued one of the first rulings concerning coverage of a Cyber insurance policy. Travelers issued a cyber policy to a data storage and processing company, Federal Recovery Services, which provided coverage for “errors and omissions wrongful acts.”

Federal Recovery subsequently entered into a service agreement with fitness center operator Global Fitness Holdings, which required Federal Recovery to process its member accounts and transfer member fees to Global Fitness. Global Fitness later entered into an asset purchase agreement with a different fitness company under which it agreed to transfer all of its member accounts data to the purchaser. Federal Recovery refused to transfer some of this data unless Global Fitness satisfied certain demands for compensation. Global Fitness sued Federal Recovery for breach of contract, as well as other causes of action.

Pursuant to its Cyber policy, Travelers agreed to defend Federal Recovery under a reservation of rights, but then filed a declaratory judgment action seeking a ruling that it did not have to defend. The policy provided coverage to Federal Recovery for “errors and omissions wrongful acts,” which were defined as “any error, omission or negligent act.” The Utah federal court ruled that Travelers did not have a duty to defend Federal Recovery. Although the insured's policy covered errors, omissions and negligent acts, Global Fitness' claim that Federal Recovery willfully withheld data was not covered.

Interestingly, Travelers, one of the few Cyber insurance coverage decisions issued, did not involve one of the many data breaches that have resulted in the cyber insurance boom. This decision suggests that courts will decide at least some future Cyber insurance cases based on well-employed traditional coverage theories. The year 2016 will undoubtedly bring much-needed legal guidance to the cyber insurance field, particularly in light of the U.S. Court of Appeals for the Third Circuit's recent ruling in FTC v. Wyndham Worldwide Corp., 799 F.3d 236 (3d Cir. 2015), that the Federal Trade Commission has the authority to regulate cybersecurity as an unfair business practice.

While insurers have seen a multitude of decisions impacting all aspects of the marketplace in 2015, it is likely that 2016 will bring even more important decisions. In addition to new cyber liability decisions, insurers will likely see litigation challenging the Affordable Care Act and employing disparate impact analysis in 2016. In addition, insurers may see interesting developments in class action jurisprudence, wage and hour litigation, and regulatory actions and investigations.

Related: Conn. court says insurer doesn't have to pay in IBM data breach case