Category: Reinsurance

U.S. Life Insurance Co. v. Superior National Insurance Co.

(9^th Cir. [CA] January 4, 2010)

The Ninth Circuit Federal Court of Appeals has recently upheld a California District Court ruling affirming an arbitration award in favor of a group of insurers against a reinsurer.  The group of insurers entered into a reinsurance contract with U.S. Life to reinsure the insurers’ workers compensation risks for a five year period.  After entering into the agreement, the insurers declared bankruptcy and entered into liquidation.…

Datacor, Inc. v. Heritage Warranty Insurance Risk Retention Group

(E.D. Mo., December 16, 2009)

The plaintiff purchased a contractual liability policy from the defendant.  The parties also entered into an agreement which required the defendant to reimburse the plaintiff for monies expended for warranty claims.  The agreement contained an arbitration provision, and a choice of law provision.  The choice of law provision designated Nebraska as the applicable law. 

A dispute arose between the parties, and the plaintiff filed suit.…

American Nat’l Ins. Co. v. Texas Dep’t. of Ins.

Ct. App. TX, December 16, 2009

This dispute involves the appeal of insurers against a ruling by the Texas Department of Insurance finding that stop-loss insurance policies that were sold to self-funded employee benefit plans should have been characterized as direct insurance instead of reinsurance.

The insurers contend that the self-funded plans are insurers as defined by the insurance code and thus qualify under the contextual definition of former article 3.10(a) to buy reinsurance …

Union Carbide Corp. v. Affiliated FM Ins. Co.

(NY App. December 15, 2009)

A commercial policyholder sought a declaration that the stated aggregate limits of liability for multi-year excess policies apply on an annual basis. Each of the excess policies contained a declaration that specified a dollar amount as the "limit of liability" and states that the limit applies to each occurrence and "in the aggregate." The policyholder contended that, because the excess policies are silent as to whether the limit of liability is annualized, …

Felman Production, Inc. v. Industrial Risk Insurers

(S.D. W. Va. October 19, 2009)

After a power failure at plaintiff’s metals plant resulted in physical damage and business interruption loss, plaintiff sued its direct insurers and their reinsurer, Swiss Reinsurance.  Swiss Reinsurance moved to dismiss plaintiff’s complaint arguing that no claim could be asserted against it because an insured party cannot maintain a direct action against a reinsurer. 

The court noted that there are two exceptions to this rule.  A reinsurer may …

Sun Life Assurance Co. of Canada v. Liberty Mut. Ins. Co. et. al.

(United States District Court, Southern District California, December 9, 2009)

This action arises from a dispute between the parties over their obligations under two reinsurance contracts.  The petitioner, Sun Life, seeks the confirmation of a prior arbitration award, whereas respondents contend that in seeking confirmation of the award Sun Life also seeks substantive rulings regarding the rights and liabilities of the parties that the arbitration panel did not address.  …

Dinallo v. Dunav Ins. Co.

(U.S. Dist. S.D.N.Y. November 19, 2009)

The Superintendant of Insurance of the State of New York, in his capacity as the liquidator of the insolvent Midland Insurance Company, filed suit against a Serbian reinsurance company.  The Superintendant alleges that, between November 1978 and October 1980, Midland and the defendant entered into four separate reinsurance treaties pertaining to certain insurance policies written by Midland.  Midland incurred various losses from claims on these policies that the Superintendant alleges were …

Ario v. Cologne Reinsurance (Barbados), Ltd.

(M.D. Pa. November 13, 2009)

This action was initiated by the Liquidator of American Integrity Insurance Company to recover on a reinsurance agreement American Integrity had with defendant, Cologne Reinsurance (Barbados), Ltd.  The court confirmed the arbitration award, and denied plaintiff’s motion to vacate, rejecting plaintiff’s claims that the arbitrators manifestly disregarded the law or that their partiality was evident.

The court noted that manifest disregard of the law occurs when (1) the arbitrators knew of …