Insurer sue three reinsurers to recover amounts paid in loss settlements for asbestos-related injuries on behalf of ACandS.

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Travelers Casualty and Surety Co. v. Nationwide Mutual Ins. Co., Case No. 3:11-cv-00107 (D. Conn. Jan. 19, 2011).

On January 19, 2011, Travelers Casualty and Surety Company (“Travelers”) filed suit in the U.S. District Court for the District of Connecticut against three reinsurers who allegedly failed to pay valid claims. Travelers seeks a declaration of coverage and damages for breach of contract. The suit involves reinsurance treaties referred to as Travelers Blanket Excess of Loss Reinsurance Agreements, covering April 1976 through April 1979.

In its Complaint, Travelers alleges that the reinsurance treaties obligated the reinsures to indemnify Travelers for all losses paid out by Travelers and that the treaties considered all loss resulting from a series of accidents, occurrences and/or causative incidents having a common origin to be considered as having resulted from a single accident or occurrence. The treaties further provided that the reinsurers would not second-guess settlements made by Travelers, would abide by the loss settlements of Travelers, and would pay amounts to Travelers immediately upon proof of loss settlement by Travelers.

At issue in the Complaint are loss settlements for asbestos-related injury claims made against Travelers’ insured, Armstrong Contracting and Supply Company (“ACandS”). Travelers made indemnity and defense payments on behalf of ACandS for pre-1976 policies until such policies’ limits were exhausted. Then, in 2007, Travelers settled post-1976 liability by paying $449 million to the ACandS Asbestos Settlement Trust. Travelers submitted the $449 million settlement as a single loss under the reinsurance treaties, but, Travelers alleges, the reinsurers wrongly refused to pay their respective shares of Travelers’ loss settlements as they were obligated to do under the reinsurance treaties. By its Complaint, Travelers alleges Nationwide is liable for $2.7 million, National Casualty is liable for $2.76 million, and Wausau is liable to it for $693,000 under the treaties.

For a copy of the complaint click here

Patrick Omilian and Thomas Segalla

https://www.goldbergsegalla.com/attorneys/Omilian.html

https://www.goldbergsegalla.com/attorneys/Segalla.html