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Preview: LexisNexis® Mealey's™ Reinsurance Legal News

LexisNexis® Mealey's™ Reinsurance Legal News



Headline Reinsurance Legal News from LexisNexis®



 



Magistrate Judge Denies Protection On Reinsurance Participation Agreement
SACRAMENTO, Calif. - In two putative class actions, a California federal magistrate judge ruled Jan. 12 that insurers are not entitled to a protective order regarding submission of a reinsurance participation agreement (RPA) (Shasta Linen Supply Inc. v. Applied Underwriters Inc., et al., Nos. 16-00158 & 16-01211, E.D. Calif., 2018 U.S. Dist. LEXIS 6079).



Reinsurers Breached Their Contract By Failing To Pay Share Of Loss, Insurer Says
BRIDGEPORT, Conn. - With regard to settlements of underlying asbestos claims, two reinsurers breached their contract by failing to pay their share of losses, an insurer says in its Jan. 16 complaint filed in Connecticut federal court (Travelers Casualty and Surety Co. v. Nationwide Mutual Insurance Co., et al., No. 18-00088, D. Conn.).



Insurer Asserts Breach Of Contract Against Reinsurer In Federal Court
HARTFORD, Conn. - A reinsurer breached its contract by refusing to pay $1.25 million under a series of reinsurance agreements with an insurer for the insurer's settlement of underlying asbestos claims, the insurer says in a Dec. 22 complaint filed in Connecticut federal court (Travelers Casualty and Surety Co. v. Allstate Insurance Co., No. 17-02144, D. Conn.).



Insurer: Excess Reinsurer Breached Contract In Denial Of Claim Reimbursement
MIAMI - An international health insurer alleges in a Dec. 20 complaint filed in a Florida federal court that an excess reinsurer breached its contract by refusing to pay $139,000 for an underlying medical claim paid by the health insurer (VIP Universal Medical Insurance Group Ltd. v. BF&M Life Insurance Company Ltd., et al., No. 17-24633, S.D. Fla.).



Liquidator Files Breach Of Contract Claim Against Holding Company In Reinsurance Suit
NEW YORK - In a dispute over reinsurance proceeds allegedly owed to an insolvent insurer, a liquidator on Jan. 2 asserted a breach of contract claim in a New York federal court against a holding company based upon its alleged assumption of facultative reinsurance agreements and subsequent breach of those agreements (Roger A. Sevigny v. Trygvesta Forsikring A/S, Trygvesta Forsikring A/S v. Cerberus Holding Company LLC., No. 16-04874, S.D. N.Y.).



Insurer Opposes New Trial As Jury Had Evidence For $64M Award Against Reinsurer
UTICA, N.Y. - In response to a reinsurer's motion for a new trial, an insurer argues in a Jan. 12 brief to a New York federal court that a jury had ample evidence in a "dozen witnesses and hundreds of exhibits" before reaching a $64 million verdict against a reinsurer over asbestos claims (Utica Mutual Insurance Co. v. Fireman's Fund Insurance Co., No. 09-00853, N.D. N.Y.).



Insurer Says Reinsurer Breached Contract With Regard To Asbestos Claims
BRIDGEPORT, Conn. - A reinsurer breached its contract by refusing to pay its share of losses arising out of the settlement of asbestos claims, an insurer says in a Jan. 16 complaint filed in the Connecticut federal court (Travelers Casualty and Surety Co. v. Lamorak Insurance Co., No. 18-00087, D. Conn.).



6th Circuit Denies Rehearing For Ruling On Documents Between Insurer, Reinsurer
CINCINNATI - In an asbestos coverage dispute, the Sixth Circuit U.S. Court of Appeals on Jan. 3 denied a panel rehearing and rehearing en banc on a decision to not conduct an in camera review of an insurer's documents disclosed to third parties other than a reinsurer and a claims adjuster (In re OneBeacon Insurance Co. v. The William Powell Co., No. 17-3852, 6th Cir.).



Insurer Seeks To Certify $3.2M Default Judgment Final Against Reinsurer
SAN DIEGO - An insurer asks a California federal court in a Jan. 12 motion to certify as final a $3.2 million default judgment against a reinsurer over its alleged breach of reinsurance agreements as a result of a series of fraudulent transfers (Odyssey Reinsurance Co. v. Richard Keith Nagby, et al., No. 16-3038, S.D. Calif.).



SEC Settles With Reinsurance Executive On $2.5 Fraudulent Scheme Against Investors
NEW HAVEN, Conn. - A reinsurance executive accused of engaging in a $2.5 million fraudulent scheme settled claims brought by the Securities and Exchange Commission on Jan. 11 after the SEC filed a complaint in Connecticut federal court (Securities and Exchange Commission v. David S. Haddad, et al., No. 18-00055, D. Conn.).



Federal Judge Grants Additional Discovery Extension To Reinsurer
NEW YORK - In a reinsurance coverage dispute for a trucking accident, a New York federal judge on Jan. 3 granted a two-month discovery deadline extension to a reinsurer (Endurance Assurance Corp. v. Florists' Mutual Insurance Co., et al., No. 16-09955, S.D. N.Y.).



Federal Judge Dismisses Case Over Insurers' Breach Of Policy For Failing To Pay
MILWAUKEE - In a dispute where a state insurance fund claimed that a policy above its own was reinsurance, a Wisconsin federal judge adopted on Dec. 29 the fund and insurers' joint stipulations for dismissal of the lawsuit alleging that the insurers breached their agreements with the fund by failing to pay a fire claim (State of Wisconsin Local Government Property Insurance Fund v. Lexington Insurance Co., et al., No. 15-142, E.D. Wis.).



Government Appeals Ruling On Yield Crop Exclusion For Reinsurance With FCIC
DENVER - The U.S. government on Dec. 12 filed a notice of appeal to the 10th Circuit U.S. Court of Appeals regarding a decision that a division of the U.S. Department of Agriculture improperly determined that a yield crop exclusion was not immediately available to farmers upon the passage of a farm bill for purposes of calculation in reinsurance coverage (Glenn Ausmus, et al. v. Sonny Perdue, et al., No. 16-01984, D. Colo., 2017 U.S. Dist. LEXIS 169305).



Reinsurer Questions Supreme Court On Arbitration Clause In Reinsurance Agreement
WASHINGTON, D.C. - A reinsurer on Nov. 9 petitioned the U.S. Supreme Court to answer whether "an argument that applies equally" to an arbitration clause under a reinsurance participation agreement (RPA) "as a whole is sufficient to specifically challenge a delegation provision" under Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 70 (2010) (Applied Underwriters Captive Risk Assurance Company Inc. v. Minnieland Private Day School Inc., No. 17-717, U.S. Sup., 2017 U.S. S. Ct. Briefs LEXIS 4426).



Magistrate Judge Confirms Arbitration Award To Workers' Comp Insurer
SAN FRANCISCO - In a dispute regarding a reinsurance participation agreement (RPA), a California federal magistrate judge on Dec. 28 confirmed an arbitration award, ordering an insured to pay $539,246.88 to an insurer in remaining premium payments for the workers' compensation coverage (American ETC, Inc. v. Applied Underwriters Captive Risk Assurance Company Inc., No. 17-03660, N.D. Calif., 2017 U.S. Dist. LEXIS 212811).



Panel Remands Dispute For Decision On Whether Clause Is Unconscionable
SAN DIEGO - A California appeals panel ruled Dec. 22 that a trial judge erred in denying a motion to compel arbitration in a workers' compensation coverage dispute arising from a reinsurance participation agreement (RPA) without deciding whether the RPA's delegation clause is unconscionable (Ramar Production Services Inc., et al. v. Applied Underwriters Inc., et al., No. D071443, Calif. App., 4th Dist., Div. 1, 2017 Cal. App. Unpub. LEXIS 8741).



New York High Court Finds No Set Rule On Reinsurer's Liability Cap On Defense Costs
NEW YORK - In a coverage dispute over asbestos litigation costs, the New York Court of Appeals on Dec. 14 ruled that one of its previous rulings did not establish a general rule that a reinsurance contract's total liability cap encompasses both indemnity and defense costs incurred by an insurer (Global Reinsurance Corporation of America v. Century Indemnity Co., No. CTQ-2016, 0005, N.Y. App., 2017 N.Y. LEXIS 3723).



New York Federal Jury Awards $64M To Insurer, Finds Reinsurer Is Liable
UTICA, N.Y. - A jury in a New York federal court on Dec. 15 awarded an insurer more than $64 million after finding that a reinsurer is liable under seven reinsurance agreements for sums the insurer paid to an insured in an asbestos claims settlement (Utica Mutual Insurance Co. v. Fireman's Fund Insurance Co., No. 09-00853, N.D. N.Y.).



Reinsurer Seeks New Trial After New York Federal Jury Awards $64M To Insurer
UTICA, N.Y. - Following a jury's verdict of $64 million, a reinsurer in a Dec. 29 motion asked a New York federal court for a new trial, arguing that it is not liable under seven reinsurance agreements for sums an insurer paid to an insured in an asbestos claims settlement (Utica Mutual Insurance Co. v. Fireman's Fund Insurance Co., No. 09-00853, N.D. N.Y.).



Judge Dismisses Reinsurer, Related Entities From Breach Of Contract Case
SALT LAKE CITY - A Utah federal judge on Dec. 19 dismissed a reinsurer and other related entities from a breach of contract and bad faith lawsuit over denied coverage under a professional liability policy because there is no personal jurisdiction (Allegis Investment Services LLC, et al. v. Arthur Gallagher & Co., et al., No. 17-515, D. Utah, 2017 U.S. Dist. LEXIS 209257).



Insurer, Reinsurer Agree To Dismiss Dispute Over Payments Made For Asbestos Losses
BOSTON - An insurer and reinsurer on Dec. 15 agreed to dismiss a lawsuit in a Massachusetts federal court concerning coverage under six facultative reinsurance certificates for asbestos losses paid to an insured (Lamorak Insurance Co. v. Everest Reinsurance Co., No. 15-13425, D. Mass.).



Claims Administrator Sues Insurer For Failing To Reimburse Defense Costs
MINNEAPOLIS - A claims administrator and an insurer allege in an Oct. 23 complaint filed in a Minnesota federal court that an insurer breached its contract by failing to reimburse them for unpaid defense costs in a settlement of an underlying workers' compensation claim after reinsurance initially provided coverage (Berkley Risk Administrators Co. LLC, et al. v. National Union Fire Insurance Company of Pittsburgh, PA, No. 17-04765, D. Minn.).



Judge Stays Discovery Until Ruling On Motion To Dismiss Reinsurers' RICO Lawsuit
EL PASO, Texas - In a lawsuit alleging a scheme to take control over an auto dealership and to decline selling vehicle-protection products that are reinsured, a Texas federal judge on Dec. 26 stayed all discovery until a ruling on a motion to dismiss (Richard C. Poe II, et al. v. Anthony E. Bock, et al., No. 17-00232, W.D. Texas).



Government Owed Interest For Reinsurance Payments On Promissory Notes, Judge Says
LOS ANGELES - The federal government is entitled to recover prejudgment interest and attorney fees in its lawsuit seeking to enforce three promissory notes for which the government made reinsurance payments, a California federal judge ruled Dec. 18 (United States of America v. Lorin S. Rosemond, No. 17-00854, C.D. Calif., 2017 U.S. Dist. LEXIS 207751).



Homeowner Says To Court: Reinsurance Scheme Existed With Mortgage Insurance
TRENTON, N.J. - A homeowner argues in his Dec. 4 opposition brief filed in a New Jersey federal court that an insurer and a bank engaged in kickbacks and entered into "riskless captive reinsurance arrangements" for the insurer to "reinsure" property insurance force-placed on borrowers (Mufti Quarashi v. M&T Bank Corp., et al., No. 17-06675, D. N.J.).



Parties Set Arbitration In Reinsurance Suit Over Workers' Comp Risks For August 2018
NEW YORK - In a dispute regarding reinsurance of workers' compensation risks, a New York federal judge on Dec. 18 endorsed a joint status report indicating that the parties have scheduled an arbitration hearing the week of Aug. 13 (In re arbitration between National Union Fire Insurance Company of Pittsburgh, PA v. Federal Insurance Co., No. 16-CV-8821, S.D. N.Y., 2017 U.S. Dist. LEXIS 88470).



Business Arguments Undercutting Bellefonte Re
By Robert M. Hall I. Introduction One of the more controversial reinsurance decisions in living memory is Bellefonte Reins. Co. et al. v. Aetna Casualty and Surety Co., 903 F.2d 910 (2nd Cir. 1990) ("Bellefonte Re"). It held that the limit of liability in a facultative certificate unambiguously capped the reinsurer's liability for losses and expenses. Stated differently, even though the underlying policy paid expenses in addition to limits, the facultative certificate did not thus creating a gap in reinsurance coverage for the ceding insurer. Other courts have followed this decision.