Category: Reinsurance

Canal Ins. Co. v. Montello, Inc. et. al. (United States District Court, Northern District of Oklahoma, September 26, 2011)

This environmental reinsurance action stems from the use of asbestos containing materials in the drilling mud distributed by Montello.  Specifically, Montello was the distributor of products used in the drilling industry.  One of its products was a drilling mud that contained asbestos.  Defendant Montello was sued by numerous individuals who were allegedly exposed to asbestos through Montello’s products.  Thereafter, Montello sought coverage from the group of …

In re Liquidation of Midland Ins. Co.  (N.Y. App. Div. (1^st Dept.) Aug. 25, 2011)

A New York appellate court recently refused to modify an injunction against bankrupt insurer Midland Insurance Company to permit its reinsurer to assert a breach-of-contract claim against its liquidator.

A New York court placed Midland in liquidation in 1986 and permanently enjoined the commencement and prosecution of all actions against it. Everest Reinsurance Company had entered into excess of loss reinsurance treaties and facultative reinsurance certificates with Midland for …

U.S. v. Ferguson, et al

(2nd Circuit August 1, 2011)

The Second Circuit federal appellate court vacated the 2008 and 2009 convictions of four executives of General Reinsurance and an executive of American International Group and the matter was remitted to the district court for retrial. The convictions stemmed from a finite reinsurance transaction designed to reallocate risk in a way that shored up AIG’s loss reserves which were believed to be depressing AIG’s stock price. The defendants were convicted of conspiracy, mail …

Affinity Financial Corp. v. AARP Financial, Inc. (U.S. District Court, .D.C.)

In a dispute over a contract in which Affinity Financial agreed to provide financial services to AARP members, both parties entered into binding arbitration proceedings pursuant to the terms of the contract.  The arbitration Panel held that it was difficult to pinpoint the moment when any one party “crossed the line and breached the Agreement when the other party was not in breach” and found that “one could readily conclude that both parties were …