Category: Reinsurance

ACE Property & Casualty Insurance Co. v. Global Reinsurance Corp. of America (U.S. District Court, E.D. PA)

In a case removed to federal court from a Pennsylvania state court, a Pennsylvania excess insurer recently filed a claim against a New York reinsurer in a dispute over its obligations under a facultative reinsurance contract.  Unlike a typical treaty reinsurance contract, which reinsures multiple insurance policies written under certain circumstances, a facultative reinsurance contract reinsures a specific insurance policy.  The parties entered into such an agreement to …

Workmen’s Auto Ins. Co. v. Guy Carpenter & Co., Inc. (Cal. Ct. App. May 4, 2011)

An appellate court in California held last week that an insurance broker does not owe a fiduciary duty to its client. Rather, “an insurance broker’s duties are defined by negligence law, not fiduciary law, and the agency of a broker must be viewed only through the lens of insurance law, which is a constellation of rules and policies all its own.” The court acknowledged the inherent conflict between insurance …

Pacific Employers Ins. Co. v. Global Reinsurance Corp. of America E.D. PA., April 18, 2011

This case involves a dispute over a facultative reinsurance contract entered into by plaintiff policyholder with defendant reinsurer for an umbrella commercial liability policy insuring Buffalo Forge Co.  Some time after the facultative reinsurance contract was executed; Buffalo Forge was named as a defendant in numerous asbestos products personal injury lawsuits.  Plaintiff participated in the defense and indemnity of the suits and made payments in excess of $1 million.  …

White Mountains Reinsurance Co. of America v. Travelers Cas. & Surety Co., Case No. 11 Civ. 390 (DLC) (S.D.N.Y., Apr. 13, 2011)

White Mountains filed an action against Travelers in the Supreme Court of New York, New York County, seeking a declaratory judgment and alleging breach of contract in connection with certain reinsurance contracts. Travelers removed the matter to federal court based on diversity jurisdiction, then moved to transfer the action, pursuant to 18 U.S.C. § 1404, to the District of Connecticut where Travelers …

Health Facilities of California Mut. Ins. Co., Inc. v. British American Ins. Grp., Ltd. et.al.(United States District Court, Central District of California, April 5, 2011)

This reinsurance dispute arises from claims involving the return of excess deposits and premiums from certain reinsurance contracts entered into by plaintiff, Health Facilities of California (HFC), an incorporated risk retention group.  Defendants, British American Insurance Group (BAIG) and Peter Myrtle, are Louisiana citizens acting as reinsurance intermediaries transmitting premiums payments, payments of return premium and collecting payments. 

HFC …

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Ivie v. Diversified Lending Group, Inc., Case No. 1:09-CV-751, 2011 U.S. Dist. LEXIS 27680 (W.D. Mich., Mar. 17, 2011)

Plaintiff, Ivie, invested $2.2 million in a “guaranteed” 9% interest-earning note issued by DLG. DLG represented that the note was a “safe and conservative investment,” guaranteed by an A+ rated insurance company that issued “reinsurance” policies to reinsure Ivie’s principal investment. The investment contract contained a “Reinsurance Endorsement” that provided the principal amount of the investment will be insured by a AA rated or better …

Trenwick Amer. Reinsurance Co. v. IRC, Inc. et.al. (United States District Court, District of Massachusetts, February 16, 2011)

This reinsurance dispute arises from claims that IRC Re and defendant Swasey breached a reinsurance contract under which IRC Re was to provide retrocessional coverage for the Compcare 2000 program, a managed workers' compensation insurance and employers’ liability insurance program.  Specifically, Trenwick sued defendant and Malcolm Swasey ("Swasey"), personally, for fraud and breach of contract in connection with the program.

The original arrangement included Hanover Insurance Company ("Hanover") …

Acceptance Ins. Companies, Inc. v. Granite Reinsurance Co. Ltd.,

(Bankruptcy Court NE January 19, 2011)

A reinsurance company filed a proof of claim against an insurer in its bankruptcy proceeding claiming that it owed premiums of approximately $10.9 million. The reinsurance contract called for premiums of $15 million consisting of an ignition $6 million payment for coverage for crop years 2001 and 2002 and $3 million due in each of the following three years. The insurer objected to the reinsurer’s claim on the basis that …