English Court Upholds Arbitral Award in Which Losses Sustained by Reinsurers Arising Out of World Trade Centre Attacks Were Caused by Two Separate Events

Aioi Nissay Dowa Insurance Company Ltd v. Heraldglen Limited and Others [2013] EWHC 154 (Comm)

This case is an appeal under section 69 of the Arbitration Act 1996 (appeal on a point of law) of an arbitral award dated January 26, 2012 concerning the aggregation of losses sustained by original reinsurers (the respondents in this case) arising out of the September 11, 2001 attacks on the World Trade Center (WTC).

The appellant provided retrocession excess of loss reinsurances to the respondents, who, in turn, subscribed …

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CT Judge Says Insurer’s New Claims Against Reinsurer Are Plausible

Travelers Indem. Co. v. Excalibu R Reinsurance Corp. (D.Conn.Feb. 1, 2013)

On February 1, 2013, a federal judge in Connecticut granted an insurer’s motion to amend its complaint against a reinsurer to include claims based on information revealed during discovery. In the case, the reinsurer refused to pay to the insurer amounts the insurer claims it is owed under a treaty of reinsurance and the insurer sued the reinsurer to recover them. After discovery was already underway, the insurer moved to amend its complaint.

The …

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To [Follow] or Not to [Follow] – That is the Question: NY Court of Appeals Hears Important Case on Follow-the-Fortunes

The weather in Albany, New York might have been cold on January 2, but the New York Court of Appeals’ bench was scorching during the oral argument for the appeal in United States Fid. & Guaranty v Am. Re-Ins. Co. The five-judge bench fired question after question at counsel concerning important issues concerning the reinsurance industry.

The appeal concerns a reinsurance dispute. More specifically, the appeal concerns whether follow-the-fortunes applies to the post-allocation phase of an insurance payout and whether bad faith serves as an …

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No Unjust Enrichment or RESPA Violations in Suit Against HSBC

McCarn v. HSBC USA, Inc.
(E.D.Cal.Nov. 9, 2012)

On November 13, 2012, Judge Lawrence J. O’Neill of California’s Eastern District dismissed claims of unjust enrichment and allegations of Real Estate Settlement Procedures Act (RESPA) violations levied against HSBC USA Inc.’s reinsurance unit. The complaint, brought by a borrower, alleged that HSBC extracted kickbacks, which resulted in steeper premiums for borrowers. Last month, Judge O’Neill determined that the plaintiff had not adequately demonstrated that the one-year statute of limitations for RESPA claims and three-year statute of …

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Hurricane Sandy: Déjà vu on business interruption losses issues? How a 2010 UK case might give some answers.


In the wake of the damage and destructions caused by Hurricane Sandy many policyholders (and insurers and reinsurers) are currently checking what is likely or not likely covered under their policies.  Particularly, with commercial property or business, the main issue seems to be whether and how business interruption losses are covered.  Problems can arise when an insured suffered loss of revenue which was not necessarily caused by the damage to the insured property.

Interestingly, this very issue of business interruption arose in the wake of

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District Court Resolves Complex Retrocessional Debate Largely in Favor of the Insured

Munich Reinsurance America, Inc. v. American National Ins. Co.
(No. 09-6435, September 28, 2012)

This United States District Court for the District of New Jersey case focuses on the complex retrocessional agreements between the plaintiff, Munich Reinsurance America Inc. (Munich), and the defendant, American National Insurance Company (ANICO).

For the period of January 1, 1998 through December 31, 2001, Munich entered into a reinsurance relationship with Everest National Insurance Company (Everest) to reinsure Everest’s workers compensation insurance program under an excess of loss agreement. Munich …

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Whether Reinsurance Intermediary Entitled to Annual Fee After Reinsured Changed Brokers Mid-Year is a Matter for Trial

Homeowners Choice, Inc. v. Aon Benfield, Inc.
(N.D. Ill., September 10, 2012)

Homeowners Choice Property and Casualty Insurance Company (Homeowners Insurance) is a subsidiary of Homeowners Choice, Inc. (Homeowners Choice). Homeowners Insurance signed a broker authorization contract (contract) with Aon Benfield (Aon) designating Aon as its broker of record beginning July 1, 2007.  On March 31, 2009, the parties entered into a revenue-sharing agreement so that Aon would pay Homeowners Choice a portion of commissions that it received from Homeowner Insurance’s reinsurance placements.  In March …

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Reinsurer Avoids Asbestos Defense Costs

Pacific Employers Insurance Co. v. Global Reinsurance Corp. of America
(3d Cir. Sept. 7, 2012)
On September 7, 2012, the US Court of Appeals for the Third Circuit reversed a lower court ruling holding Global Reinsurance Corp. (Global) accountable for $1 million in asbestos litigation costs paid by Pacific Employers Insurance Co. (Pacific), finding that Pacific did not promptly notify Global.

The court said that Pacific was obligated to notify Global of the asbestos suits facing manufacturing company Buffalo Forge Co. as soon as Pacific …

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No Early Exit for Ex-AIG Executives

People v. Greenberg (N.Y. App. Div. 1st Dep’t May 8, 2012)

On March 8, 2012 New York’s Appellate Division, First Department, denied summary judgment motions filed by two former executives of American International Group, Inc. (“AIG”), ex-CEO Maurice “Hank” Greenberg and ex-CFO Howard Smith, and New York’s Attorney General (“AG”), clearing the way for the now seven-year-old case to go to trial.

The case against the two former executives alleges violations of Executive Law § 63(12) and the Martin Act, General Business Law § 352 …

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Federal Judge Dismisses Breach of Contract Suit Against Reinsurance Brokers

Olympus Insurance Co. v. Aon Benfield Inc. and Benfield Inc. (D. Minn. March 30, 2012)

On March 20, 2012 a federal judge in Minnesota dismissed a breach of contract action brought by Olympus Insurance Co. (“the insurer”) against its reinsurance brokers, Aon Benfield Inc. and Benfield Inc. (collectively “the reinsurance broker”), by which the insurer sought money allegedly owed to the insurer, finding that the reinsurance broker did not owe the insurer an annual fee.  The insurer alleged that it hired the reinsurance broker to

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