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Panel: Assignee's Breach Of Contract Suit Against Reinsurer Is Untimely
CHICAGO - A breach of contract lawsuit filed by an assignee of certain reinsurance receivables rights from an insolvent insurer was untimely, the Seventh Circuit U.S. Court of Appeals affirmed Aug. 7, finding that 215 Illinois Insurance Code Statute 5/206, 215 ILCS 5/206, does not provide that a liquidator may wait until the end to net the debits and credits (Pine Top Receivables of Illinois, LLC v. Banco De Seguros Del Estado, No. 16-3499, 7th Cir., 2017 U.S. App. LEXIS 14492).



Panel Finds Error In Ruling That Reinsurance Agreement Is An Insurance Contract
RICHMOND, Va. - A trial judge erred in applying the doctrine of judicial estoppel to hold that a "reinsurance participation agreement" (RPA) constituted an insurance contract under Virginia law, the Fourth Circuit U.S. Court of Appeals ruled Aug. 11, reversing in part a ruling and remanding for further proceedings (Minnieland Private Day School Inc. v. Applied Underwriters Captive Risk Assurance Company Inc., No. 16-1511, 4th Cir., 2017 U.S. App. LEXIS 14916).



Insurer Seeks Clarification On Discovery To Reinsurer In Breach Of Contract Suit
PHILADELPHIA - In a breach of contract suit, an insurer moved for clarification on Aug. 11 with a Pennsylvania federal court to confirm that it is to produce only unredacted versions of documents previously produced with redactions based on proprietary material, reserves and "other reinsurance" information and additional documents reflecting the date when the insurer provided first notice of asbestos claims to other reinsurers of relevant policies (R&Q Reinsurance Co. v. St. Paul Fire & Marine Insurance Co., No. 16-1473, E.D. Pa.).



Panel Remands For Trial On Execution Of Arbitration Clause Under Reinsurance Agreement
SAN FRANCISCO - Vacating a lower court's judgment, the Ninth Circuit U.S. Court of Appeals on Aug. 4 remanded a dispute for a trial on whether a corn and flour tortilla maker executed arbitration agreements under a reinsurance participation agreement (RPA) or a request to bind coverages and services (Arevalo Tortilleria Inc. v. Applied Underwriters Captive Risk Assurance Company Inc., No. 15-56830, 9th Cir., 2017 U.S. App. LEXIS 14399).



Insurer Asserts No Waiver In Right To Arbitrate $1.3M Suit With Reinsurer
MONTGOMERY, Ala. - A nonprofit public insurer argues to an Alabama federal court in an Aug. 9 brief that it did not waive its right to arbitrate its $1.3 million lawsuit under a reinsurance agreement and that a reinsurer will not be prejudiced in sending the dispute to arbitration (Alabama Municipal Insurance Corp. v. Munich Reinsurance America Inc., No. 16-cv-00948, M.D. Ala.).



Reinsurer Appeals To 2nd Circuit Insurer's $18M Arbitration Award
NEW YORK - A reinsurer on Aug. 14 appealed to the Second Circuit U.S. Court of Appeals a ruling requiring it to pay up to an additional $18 million in reinsurance proceeds to an insurer pursuant to an arbitration award (General Re Life Corp. v. Lincoln National Life Insurance Co., No. 17-2496, 2nd Cir.).



Magistrate Judge Issues Sanctions In Favor Of Reinsurer In Promissory Note Dispute
LINCOLN, Neb. - A Nebraska federal magistrate judge on Aug. 7 granted a reinsurer's motion for sanctions against an insurer for its failure to provide complete answers to interrogatories in a dispute concerning sums allegedly owed under a promissory note executed in connection with a reinsurance participation agreement (Applied Underwriters Inc. v. Top's Personnel Inc., No. 15CV90, D. Neb., 2017 U.S. Dist. LEXIS 124136).



Reinsurance Executives Say $50M RICO Suit With Insurers Should Be Sent To Arbitration
NEW YORK - Reinsurance executives argue in an Aug. 14 reply brief that a New York federal court should compel arbitration of insurers' $50 million Racketeer Influenced and Corrupt Organizations Act case or, alternatively, stay the dispute "in the interests of fairness and judicial economy" (Bankers Conseco Life Insurance Co., et al. v. Moshe M. Feuer, et al., No. 16-7646, S.D. N.Y.).



Bank Opposes Insurer's Discovery Sanctions Bid In Reinsurance Dispute
COLUMBIA, S.C. - A bank argues in an Aug. 7 opposition brief that a South Carolina federal court should not impose an insurer's discovery sanctions in a dispute over the mishandling of reinsurance funds because it has appropriately preserved and collected electronically stored information (Companion Property and Casualty Insurance Co. v. U.S. Bank National Association v. Redwood Reinsurance Spc. Ltd., et al., No. 15-01300, D. S.C., 2017 U.S. Dist. LEXIS 54182).



Employer Trust Appeals No Bad Faith Ruling Over Insurer's Delegation To Reinsurer
CHICAGO - An employer's trust on Aug. 2 appealed to the Seventh Circuit U.S. Court of Appeals a ruling that an insurer did not act in bad faith when it delegated to a reinsurer its responsibility to the trust because a contract placed no limits on the insurer's ability to do so and contained no requirements for disclosure of any assignments (Midco International, Inc. Employees Profit Sharing Trust v. Metropolitan Life Insurance Co., No. 17-2570, 7th Cir.).



Judge Approves Payment Of Reinsurance To Insured In Insurer's Liquidation
HARRISBURG, Pa. - In the liquidation of Reliance Insurance Co., a Pennsylvania trial judge on Aug. 9 approved a direct payment of $269,341 in proceeds by a guarantor of a reinsurer to an insured (In re: Reliance Insurance Co. in liquidation, No. 1 REL 2001, Pa. Cmwlth.).



Federal Judge Orders Parties To Consummate Settlement In $9.3M Reinsurance Dispute
NEW YORK - Writing "ok, you win" on a memo endorsement seeking a settlement extension, a New York federal judge ordered the parties in a $9.3 million reinsurance fraud action to consummate their settlement of all claims and counterclaims by Sept. 15 (AmTrust North America Inc., et al. v. Safebuilt Insurance Services Inc., et al., No. 14-cv-9494, S.D. N.Y.).



Nebraska High Court: Insurer Has No Right To Assert Breach Of Reinsurance Agreement
LINCOLN, Neb. - A workers' compensation insurer and a reinsurer's billing agent have no standing to bring a claim for breach of a "Reinsurance Participation Agreement" (RPA), the Nebraska Supreme Court ruled July 21, dismissing their case (Applied Underwriters Inc., et al. v. S.E.B. Services of New York Inc., et al., No. S-16-496, Neb. Sup., 2017 Neb. LEXIS 132).



Judge Orders Insurer To Produce Documents To Reinsurer In Breach Of Contract Suit
PHILADELPHIA - In a breach of contract suit over asbestos insurance claims, a Pennsylvania federal judge on Aug. 1 ordered an insurer to produce to a reinsurer original, unredacted versions of documents concerning proprietary information, historical loss reserves and information related to other reinsurance companies (R&Q Reinsurance Co. v. St. Paul Fire & Marine Insurance Co., No. 16-1473, E.D. Pa., 2017 U.S. Dist. LEXIS 120858).



Finance Company Seeks Collection Of $26M Award Against Insurer, Reinsurers
WASHINGTON, D.C. - A financial services company filed a breach of contract complaint on July 20 in the District of Columbia federal court, seeking to collect on a $26 million judgment arbitration award from a credit insurer and its reinsurers (Vantage Commodities Financial Services I, LLC v. Assured Risk Transfer PCC, LCC, et al., No. 17-01451, D. D.C.).



Justice Declines To Dismiss Reinsurer Contract Breach, Misrepresentation Lawsuit
NEW YORK - A New York trial justice refused on July 17 to dismiss a Pennsylvania reinsurer's misrepresentation and breach of contract lawsuit against an Illinois insurer over asbestos coverage because there is a substantial nexus between New York and the underlying reinsurance transactions (R&Q Reinsurance Co. v. Allianz Insurance Co., No. 653744/2014, N.Y. Sup., New York Co., 2017 N.Y. Misc. LEXIS 2721).



Health Plan's Claim Over Reinsurance Contributions Under ACA Fails, Judge Says
BALTIMORE - A self-funded, self-administered group health plan failed to allege a claim over which jurisdiction would exist under the Patient Protection and Affordable Care Act's (ACA) "internal revenue tax" or "any sum" provisions, a Maryland federal judge ruled July 21, dismissing the health plan's lawsuit alleging that it was improperly required to pay reinsurance contributions under the ACA (Electrical Welfare Trust Fund v. United States of America, et al., No. 16-2186, D. Md., 2017 U.S. Dist. LEXIS 113687).



Government Says Failed ACA Insurer Should File Case In Federal Claims Court
COLUMBIA, S.C. - A failed Patient Protection and Affordable Care Act (ACA) co-operative insurer's liquidator should file his lawsuit challenging a federal loan repayment demand in the U.S. Court of Federal Claims, the government says in a July 19 motion filed in South Carolina federal court (Raymond G. Farmer v. United States of America, et al., No. 17-cv-00956, D. S.C.).



Allegations Support Fraud Claim In Sham Reinsurer Scheme, Justice Concludes
NEW YORK - In two alleged schemes involving a "sham reinsurance company" and a "sham medical billing company," a New York trial justice ruled July 17 that an investment fund sufficiently asserted a fraud claim because it alleged that its assets were used in both schemes (Wimbledon Financing Master Fund Ltd. v. Weston Capital Management LLC, et al., No. 653468/2015, N.Y. Sup., New York Co., 2017 N.Y. Misc. LEXIS 2725).



Reinsurers Allege Scheme To Refuse Selling Reinsured Vehicle-Protection Products
EL PASO, Texas - A car dealership's shareholder and his reinsurance companies allege in a July 27 complaint filed in a Texas federal court that individuals schemed to take control over the dealership and to decline to sell vehicle-protection products that are reinsured by the reinsurers (Richard C. Poe II, et al. v. Anthony E. Bock, et al., No. 17-00232, W.D. Texas).



Insurers Oppose Arbitration Of $50M RICO Suit Against Reinsurance Executives
NEW YORK - Insurers argue in a brief filed July 24 in a New York federal court that they should not be coerced by three reinsurance executives to send a $50 million Racketeer Influenced and Corrupt Organizations Act case to arbitration because the executives are not parties to a reinsurance agreement (Bankers Conseco Life Insurance Co., et al. v. Moshe M. Feuer, et al., No. 16-7646, S.D. N.Y.).



Federal Judge Orders Production Of Reinsurers' General Ledger Info
ATLANTA - A Georgia federal judge on July 19 ordered the production of general ledger information from reinsurers in an insurer's case over alleged fraudulent transfers of reinsurance funds to avoid paying proceeds to the insurer (Canal Insurance Co., et al. v. Golden Isles Reinsurance Company Ltd,, et al., No. 15-03331, N.D. Ga.).



Reinsurer: Insurer Waived Right To Arbitrate $1.3M Suit By Invoking Litigation
MONTGOMERY, Ala. - A nonprofit public insurer waived its right to arbitrate its $1.3 million lawsuit under a reinsurance agreement because it invoked the litigation process, a reinsurer argues in an Aug. 1 reply in Alabama federal court, saying it would be prejudiced (Alabama Municipal Insurance Corp. v. Munich Reinsurance America Inc., No. 16-cv-00948, M.D. Ala.).



Steel Maker Says Settlement With Insurer Triggered Reinsurer's Indemnity Duties
NEW YORK - A steel maker argues in its July 21 reply brief to a New York federal court that its settlement agreement with an insurer triggered a reinsurer's indemnity obligations under an arbitration award because it liquidated the steel maker's claim (National Indemnity Co. v. IRB Brasil Resseguros S.A., No. 15-3975, S.D. N.Y.).



Mortgagors, Reinsurer Seek Judgment On RESPA Claim Under 3rd Circuit Law
PITTSBURGH - In a mortgage insurance reinsurance scheme case, mortgagors and a reinsurer argue in a July 12 motion that they are entitled to judgment on a Real Estate Settlement Procedures Act (RESPA) claim under current Third Circuit U.S. Court of Appeals law (Linda Menichino, et al. v. Citibank, N.A., et al., No. 12-00058, W.D. Pa., 2017 U.S. Dist. LEXIS 86380).



Excess Policies Cap Liability Per Claim, Justice Finds After Reading Reinsurance Policy
BOSTON - Excess and primary insurance policies provide that the maximum coverage for two doctors and a nurse sued in a medical malpractice action was $2.5 million per individual, a Massachusetts justice ruled June 2 after reading the language of two reinsurance policies to determine the excess and primary policies' liability (Li Chen, et al. v. Paul Donovan, et al., 1584 CV 01625-BLS2, Mass. Super., Suffolk Co., 2017 Mass. Super. LEXIS 66).



Farming Co-op Appeals Ruling Over Payment Of Premium Rebates In Reinsurance Years
CINCINNATI - A farming cooperative on Aug. 2 appealed to the Sixth Circuit U.S. Court of Appeals a ruling that after a merger with a nongrandfathered cooperative, it lost its status as an entity approved to make premium-rebate payments for 2005, 2006 or 2007 reinsurance years (Sunrise Cooperative Inc. v. U.S. Department of Agriculture, et al., No. N/a, 6th Cir.).



Judge Approves Reinsurer's Direct Payment To Insured In Reliance's Liquidation
HARRISBURG, Pa. - A Pennsylvania judge on July 25 approved a direct payment of reinsurance by a reinsurer to an insured in the liquidation of Reliance Insurance Co. (In re: Reliance Insurance Co. in liquidation, No. 1 REL 2001, Pa. Cmwlth.).



Liquidator Applies For Direct Payment Of Reinsurance To Insured
HARRISBURG, Pa. - Reliance Insurance Co.'s liquidator on July 20 sought the approval of a Pennsylvania court for a direct payment of $269,341 in proceeds by a guarantor of a reinsurer to an insured (In re: Reliance Insurance Co. in liquidation, No. 1 REL 2001, Pa. Cmwlth.).



Reinsurer Argues To New York High Court For Cap Of Defense Costs In Asbestos Suit
NEW YORK - Reinsurance certificates should be interpreted according to their plain language requiring "all reinsurance 'subject to' the amount of liability and subordinating the follow-the-form clause to the certificates' specific terms," a reinsurer argues in a brief filed June 27 in the New York Court of Appeals, saying that its liability for defending and indemnifying asbestos litigation is capped (Global Reinsurance Corporation of America v. Century Indemnity Co., No. CTQ-2016, 0005, N.Y. App.).



1st Circuit Upholds Ruling Denying Arbitration Of Reinsurance Agreement
BOSTON - An arbitrator did not disregard the law when deciding that arbitration is banned for a breach of contract dispute under a reinsurance participation agreement regardless of the parties' intent to arbitrate, the First Circuit U.S. Court of Appeals held July 13, affirming the denial of a motion to vacate the arbitrator's decision (Mountain Valley Property Inc. v. Applied Risk Services Inc., et al., No. 16-2189, 1st Cir., 2017 U.S. App. LEXIS 12575).



Judge Denies Reconsideration Of Confirmation Of Arbitration Award In Reinsurance Suit
BRIDGEPORT, Conn. - Refusing to reconsider the confirmation of a clarified arbitration award that requires a reinsurer to pay up to an additional $18 million in reinsurance proceeds to an insurer, a Connecticut federal judge on July 18 held that he lacked the authority to issue a judgment for a sum certain (General Re Life Corp. v. Lincoln National Life Insurance Co., No. 15-cv-01860, D. Conn.).



Federal Bankruptcy Judge Strikes Foreign Specialty Reinsurer's $15M Bond
NEW YORK - A foreign specialty reinsurer must post a new $15 million bond as part of its attempt to arbitrate a coverage dispute in Bermuda, a New York federal bankruptcy judge ruled July 17, granting a defunct brokerage company's motion to strike the current bond as defective (In re: MF Global Holdings Ltd., et al., MF Global Holdings Ltd. as plan administrator, and MF Global Assigned Assets LLC v. Allied World Assurance Company Ltd., et al., Chapter 11 No. 11-15059, Adv. Proc. No. 16-01251, S.D. N.Y. Bkcy.).



Reinsurer Declines To Oppose Insured's Motion To Intervene In Dispute Over $5M Claim
NEW YORK - A Brazilian reinsurer told a New York federal court on July 14 that it will not oppose a steel maker's request to intervene in an insurer's lawsuit seeking to require the reinsurer to cover a $5 million settlement with the insured under an arbitration award (National Indemnity Co. v. IRB Brasil Resseguros S.A., No. 15-3975, S.D. N.Y.).



Judge Dismisses Breach Of Contract Suit By Rehabilitator Against Mortgage Reinsurer
CHICAGO - An Illinois federal judge on July 5 dismissed a rehabilitator's lawsuit accusing a reinsurer of breaching its contract with an insolvent mortgage insurance provider by failing to disclose the benefits it derived from a captive reinsurance arrangement because the contract did not impose such a requirement (People of the state of Illinois, ex rel., Acting Director of Insurance, Jennifer Hammer v. Twin Rivers Insurance Co. f/k/a Cherokee Insurance Co., No. 16-7371, N.D. Ill., 2017 U.S. Dist. LEXIS 103833).



Judge Denies Reinsurer's Bid For Amendment In Federal Crop Insurance Suit
WASHINGTON, D.C. - A federal judge in the District of Columbia on June 7 denied a reinsurer's request to amend its complaint against the Federal Crop Insurance Corp. (FCIC) in a reinsurance dispute because the reinsurer untimely filed its motion (ACE American Insurance Co., et al. v. Federal Crop Insurance Corp., et al., No. 14-1992, D. D.C.).



Insured Reaches Settlement With Insurer, Reinsurer In Business Interruption Suit
PITTSBURGH - A glass manufacturer insured, an insurer and a reinsurer have agreed to settle a coverage dispute over property damage and business interruption losses arising from the insured's equipment breakdown, according to a Pennsylvania federal judge's June 7 order (Hartford Steam Boiler Inspection and Insurance Co., et al. v. International Glass Products LLC, et al., No. 08-1564, W.D. Pa.; 2016 U.S. Dist. LEXIS 135045).



Judge Denies Compelling Production Of Communications Of Reinsurance Transactions
OWENSBORO, Ky. - A Kentucky federal judge on July 7 denied the government's motion to compel production of all communications in revised privilege logs submitted by an insurer and its insureds concerning taxable years for insurance and reinsurance transactions (United States of America v. Owensboro Dermatology Associates P.S.C., No. 16-00003, United States of America v. Dermatology Property Management LLC, No. 16-00004, United States of America v. Beveled Edge Insurance Co., No. 16-00005, W.D. Ky., 2017 U.S. Dist. LEXIS 105099).



Reinsurer Seeks Discovery Sanctions In Dispute Over Promissory Note With Insurer
LINCOLN, Neb. - An insurer failed to comply with an order requiring complete answers to interrogatories in a dispute concerning sums allegedly owed under a promissory note executed in connection with a reinsurance participation agreement, a reinsurer argues to a Nebraska federal court in a July 12 brief (Applied Underwriters Inc. v. Top's Personnel Inc., No. 15CV90, D. Neb.).



Reinsurer Opposes Insurer's Motion For Protective Order In Breach Of Contract Suit
PHILADELPHIA - In a breach of contract suit, a reinsurer says in a June 29 filing that a Pennsylvania federal court should deny an insurer's request for a protective order precluding witnesses from testifying to historical reserves and information concerning other reinsurers of asbestos claims (R&Q Reinsurance Co. v. St. Paul Fire & Marine Insurance Co., No. 16-cv-01473, E.D. Pa.).



Reinsurer, Insurer's Late Notice Dispute Set For Trial In Federal Court
UTICA, N.Y. - A reinsurer and insurer's dispute over reinsurance concerning an underlying $325 million settlement of asbestos claims against an insured has been scheduled for trial on Nov. 13 (Utica Mutual Insurance Co. v. Fireman's Fund Insurance Co., No. 09-cv-00853, N.D. N.Y.).



Judge Stays $5M Lawsuit Pending Insurer's Review Of Reinsurer's Brazilian Suit
NEW YORK - A New York federal judge on July 5 stayed an insurer's proceeding seeking to enforce confirmation of an arbitration award that requires a reinsurer to cover a $5 million settlement with a steel maker, finding that the reinsurer has filed a lawsuit against the insurer in a Brazilian court (National Indemnity Co. v. IRB Brasil Resseguros S.A., No. 15-3975, S.D. N.Y.).



Reliance Liquidator Seeks Approval Of Reinsurance Direct Payment To Insured
HARRISBURG, Pa. - The liquidator of Reliance Insurance Co. in a July 5 application seeks the approval of on a Pennsylvania court for a direct payment of reinsurance by an reinsurer to an insured (In re: Reliance Insurance Co. in Liquidation, No. 1 REL 2001, Pa. Cmwlth.).



Discoverability Of Communications With Reinsurers In Bad Faith Cases
By Robert M. Hall I. Introduction When insureds allege bad faith on the part of their insurers, they often seek broad discovery in an attempt to prove their cases. Aside from discovery of reinsurance agreements, which generally is allowed, these efforts can include communications between a ceding insurer and its reinsurer(s) in the hopes of finding a smoking gun. Unsurprisingly, the cases are split on this issue but perhaps the more significant point to be learned from an examination of the selected case law reviewed below is that the outcome of the an effort to obtain such communications can depend on the focus of the request as well as a nuanced response.