LexisNexis® Legal Newsroom
Midland Liquidator Demands $2 Million From Reinsurer

Eric Dinallo, New York's Superintendent of Insurance, has sued OneBeacon Insurance Co. in an attempt to obtain more than $2 million in reinsurance proceeds allegedly owed to the estate of Midland Insurance Co. for insurance claims paid by Midland's predecessor to Bayer and Bristol/Meyers Squibb...

Seventh Circuit Cautions Use Of "Reinsurance-ese" Language

If you've ever felt lost in the world of reinsurance terms and jargon, well, you are not alone - a panel of federal circuit judges recently admitted how difficult it can be to translate "reinsurance-ese" language. In issuing an opinion on Jan. 16 in the reinsurance case titled Indiana...

James Veach on Union Indemnity's Belated Distribution: Tumult on the way to a First Partial Payment

The mid-1980s were the golden age of insurance insolvency. The current sub-prime meltdown and the agonies at mono-line insurers MBIA and Ambac scare a lot of people about the consequences of slipping from a AAA to a AA rating. But the 1980s, on the other hand, saw dozens of insurers and several large...

Reinsured is Not Entitled to Tort Damages for Reinsurer's Alleged Breach of Implied Covenant of Good Faith and Fair Dealing

On April 21, 2008, a district court decision in California, captioned California Joint Powers Insurance v. Munich Reinsurance America, Inc. addressed for the first time the issue of whether a reinsured can seek tort damages against a reinsurer for breach of the covenant of good faith and fair dealing...

Reinsurance Pool Representative Says It’s Not Proper Party In Suit

An organization representing members of a workers’ compensation reinsurance pool recently moved to dismiss fraud and accounting counterclaims made directly against it, noting that it is not a proper party but that it had merely filed the original suit on behalf of the members of the pool In an...

Reinsurer And Reinsured Separately Move To Confirm Arbitration Award, But Disagree On Which Convention Governs

Responding to a reinsurer’s cross-motion to confirm an arbitration award, a reinsured party to certain retrocessional reinsurance contracts agreed with the request for confirmation but noted that it does not waive its right to have the award construed by another arbitration panel. Arbitration...

James D. Ossyra on TIG Insurance Co. v. Aon Re, Inc: Statute of Limitations Issues In Long Developing Reinsurance Disputes

In TIG v. Aon, the Fifth Circuit applied Texas law to dismiss a seemingly viable claim on statute of limitations grounds, even though the plaintiff there may not have even known of its claim before the limitations period had run. The Fifth Circuit’s opinion points up the issues and difficulties...

Glen Kanwit and Andrew Oberdeck on the Evolving Role of Custom and Usage of Reinsurance Contracts

This commentary initially notes that custom and usage is defined in the Uniform Commercial Code as a “practice or method of dealing having such regularity of observance in place, vocation or trade as to justify the expectation that it will be observed with respect to the transaction in question...

Robert C. Leventhal on National Council on Compensation Insurance, Inc. v. American International Group, Inc.: The Discovery Obligations of Reinsurance Pool Participants – When Is A Non-Party Treated Like A Party

A new trial court decision from Illinois holds that counsel for a reinsurance pool in a lawsuit brought by the pool against a pool member is obligated to produce documents and information within the possession of each of the approximately 500 pool members when responding to Rule 34 requests for production...

STATE LEGISLATIVE/REGULATORY UPDATE

The following is an update on what has recently transpired in the state legislatures and insurance departments relating to reinsurance: On October 2, 2008, the New Jersey Consumer Catastrophe Preparedness and Protection Act was introduced in the state Senate ( Bill No. 2089 ). This Act would establish...

Daniel W. Gerber and Jeffrey L. Kingsley on Allstate Insurance v. American Home: When and Under What Circumstances can a Reinsurer Decline to Follow the Follow-The-Fortunes Doctrine

Typically, a reinsurer in the complex relationship with its reinsured, must adhere to the follow-the-fortunes doctrine. A recent case, Allstate Insurance v. American Home appears to have craved out a niche in which a reinsurer does not have to abide by the “follow-the-fortunes” doctrine if...

Argentina: New Resolution Requires That Reinsurance Contracts Conform To Argentinean Law and Jurisdiction

Under prior law (Law No. 17418, Article 162), Argentina treated reinsurance as an international undertaking and permitted the ceding company and the reinsurer to choose the appropriate law and jurisdiction in their contract. Recent Resolution 33.320/2008, however, provides that all new reinsurance contracts...

Reinsurance Roundtable – Teresa Zink Interviews Edward Krugman on the Impact of the Subprime Crisis on Reinsurers: Allocation, D&O and E&O

Teresa Zink interviewed a team of top reinsurance experts for the inaugural issue of the Reinsurance Roundtable Continuum, a monthly journal of insights and analysis from the best reinsurance law minds available. One of them was Edward Krugman, a partner with Cahill, Gordon & Reindel of New York...

Regulatory Modernization -- Reinsurers Need a New Paradigm (Part 1 of 2): An interview with Debra Hall by Teresa Zink for HB Litigation Conferences LLC

Debra Hall is a reinsurance consultant ( http://www.regulatoryandriskconsultants.com/ ) and reinsurance arbitrator (debra@hallarbitrations.com). She served as Senior Vice President and Senior Regulatory Counsel of Swiss Re America Holding Corp. and Swiss Re America from June 2005 to Oct. 2008, and before...

Regulatory Modernization -- Reinsurers Need a New Paradigm (Part 2 of 2): An Interview with Debra Hall by Teresa Zink for HB Litigation Conferences LLC

Debra Hall is a reinsurance consultant ( http://www.regulatoryandriskconsultants.com/ ) and reinsurance arbitrator (debra@hallarbitrations.com). She served as Senior Vice President and Senior Regulatory Counsel of Swiss Re America Holding Corp. and Swiss Re America from June 2005 to Oct. 2008, and before...

Lovells Insurance and Reinsurance News Flash - Lexington v. Wasa and Lexington v. AGF

Lexington -v- Wasa Lexington -v- AGF [2009, UKHL 40] Judgment 30 July 2009 The House of Lords finds for reinsurers, in a ruling of strict orthodoxy and traditional insistence on the primacy of the contract terms. An English law facultative reinsurance contract is not to be read so...

Sneak Preview from the upcoming New Appleman on Insurance Law Library Edition

Section 2.09[4] is devoted to the multi-faceted issue of determining a reinsurance intermediary’s liability. It observes that there are similarities, but also crucial differences, between the duties of an insurance agent to a policyholder and insurer and the duties of a reinsurance intermediary...

Reinsurer’s Right to Access Ceding Insurer’s Records

Section 40.10 of the New Appleman Insurance Law Practice Guide considers the reinsurer’s right to access the ceding insurer’s records. Most reinsurance contracts include a provision (some broader in scope than other) granting the reinsurer the right to inspect or audit the cedent’s...

Akin Gump’s Rosenblum on Reinsurability of Punitive Damages

David Raim of Chadbourne & Parke LLP asks Rick Rosenblum of Akin Gump Strauss Hauer & Feld LLP about a reinsurance contact with an ECO or XPL clause but does not specify whether it covers punitive damages. How does that clause apply in the context of punitive damage awards? These and other attorneys...

Chinese Drywall – Judicial Panel on MDL Rules that Coverage Matter Should Not Be Transferred to Chinese Drywall MDL Proceedings

In December 2009, the Judicial Panel on Multi-District Litigation (JPML) rejected efforts to transfer an insurance coverage action to the federal Chinese Drywall Multi-District Litigation (MDL) pending in the Eastern District of Louisiana ( In Re: Chinese-Manufactured Drywall Product Liability Litigation...

Chinese Drywall – Judicial Panel on Multi-District Litigation Rules that North American Manufactured Drywall Matter Should Not Be Transferred to Chinese Drywall MDL

On December 2, 2009 the Judicial Panel on Multi-District Litigation (JPML) ruled that an action alleging damage from North American manufactured drywall should not be transferred to the federal Chinese Drywall Multi-District Litigation (MDL) that was pending in the Eastern District of Louisiana ( In...

Insurance Solvency Regulation – New Appleman on Insurance Law Library Edition, Chapter 14

By Gary Hernandez and Paige Waters The following chapter discusses the philosophy and methodology behind the regulation of insurer solvency. It begins in Section 14.01[1] with a brief review of the field of solvency regulation. Such regulation seeks to mitigate the risk of loss to businesses and individuals...