Current U.S. Reinsurance Claim Issues 2013 - Tressler LLP

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Current U.S. Reinsurance 

Claim Issues 

Volume 14 | Number 1 

April 2013 

Bruce M. Engel 

Andrew S. Boris 

Zhanna Plotkin 

Michael A. Conlon 

Laura J. Pfeiffer 

Jonathan M. Feinstein 

bengel@tresslerllp.com 

aboris@tresslerllp.com 

zplotkin@tresslerllp.com 

mconlon@tresslerllp.com 

lpfeiffer@tresslerllp.com 

jfeinstein@tresslerllp.com 

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© 2013 Tressler LLP All Rights Reserved

TABLE OF CONTENTS 

I. The Duty of Utmost Good Faith .......................................................................................... 1 

A. At The Time Of Reinsurance Contracting.................................................................... 1 

B. At The Time Of Resolution Of Underlying Claim ........................................................ 6 

C. At The Time Of Presentation Of Reinsurance Claim ................................................... 6 

II. Follow The Fortunes/Follow The Settlements .................................................................... 8 

III. Extra Contractual Obligations ........................................................................................... 21 

IV. Insolvency Of Reinsurer .................................................................................................... 24 

V. Insolvency of Ceding Company and Set Offs .................................................................... 27 

VI. Cut Through ...................................................................................................................... 31 

VII. Late Notice ........................................................................................................................ 35 

VIII. Allocation .......................................................................................................................... 39 

A. The Number Of Occurrences Issue ........................................................................... 39 

B. The Allocation Of Losses Among Reinsurance Treaties ............................................ 41 

IX. Arbitration ......................................................................................................................... 43 

A. Motion To Compel Or Stay Arbitration ..................................................................... 43 

B. Choosing A Qualified Arbitrator ................................................................................ 59 

C. Authority Of Arbitrators ............................................................................................ 67 

D. Consolidation Of Arbitrations ................................................................................... 76 

E. Motion To Confirm, Vacate Or Modify Arbitration Award ....................................... 79 

F. Posting Of Security .................................................................................................... 90 

X. Discovery of Reinsurance Information ............................................................................. 93 

XI. Reinsurance Claim Issues Arising From September 11, 2001 ......................................... 107 

Office Locations .............................................................................................................. 110 

ii 

Current U.S. Reinsurance Claim Issues | © 2013 Tressler LLP

I. The Duty of Utmost Good Faith 

The cedent/reinsurer relationship is often considered to be based on utmost good faith 

and “uberrimae fidei.” Indeed, the reinsurance contract may contain such a provision or it may 

be implied by custom and practice. The conduct of the parties will be “measured” or “judged” 

by this standard. 

A. At The Time Of Reinsurance Contracting 

• Generally cedent must disclose to its reinsurer all known facts relevant to the 

reinsured risk. 

United States Life Ins. Co. v. Superior National Ins. Co., No. CV 05-678-GLT 

(C.D. Cal. 2005), reprinted in Mealey’s Litigation Report: Reinsurance, 

Vol. 16, No. 2 (05/26/05), aff’d, 160 Fed.Appx. 559 (9th Cir. 2005). Court 

upheld arbitration panel’s finding that reinsured “should have acted in 

more open and forthright manner” regarding information about its 

subsidiaries’ business and thus granted reinsurer 10 percent reduction of 

its obligation under quota share reinsurance contract. 

AXA Corporate Solutions v. Underwriters Reinsurance Co., No 02 C 3016, 

2004 U.S. Dist. LEXIS 22609 (N.D. Ill. 2004). Duty of utmost good faith 

exists between reinsured and reinsurer in both formation and 

performance of reinsurance agreement in order to maintain incentive for 

insurers to give full and prompt disclosure to reinsurers. 

Gerling Global Reinsur. Corp. v. ACE Property & Cas. Ins. Co., No. 01 Civ. 

7825 (S.D.N.Y. 2003); reprinted in Mealey’s Litigation Report: 

Reinsurance, Vol. 14, No. 2 (5/22/03). Reinsurer entitled to rescission 

when reinsured’s managing general agent did not disclose original 

insured was defending various asbestos-related lawsuits at time 

reinsurance was placed. 

George Nichols III v. American Risk Management Inc., et al., 2002 U.S. 

Dist. LEXIS 22221 (S.D.N.Y. 2002). Reinsurer entitled to rescission 

because there was abundant evidence that management knew or should 

have known that the company had inadequate reserves. 

Sirius International Ins. Corp. v. Oriental Assurance Corp., No. 91, (Eng. 

Comm., QBD); reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 

9, No. 24 (4/29/99). 

Mander and Others v. Prudential Assurance, No. 1024, (QBD, Commercial 

Ct.); reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 8, No. 24 

© 2013 Tressler LLP | Current U.S. Reinsurance Claim Issues 1

(4/30/98). Retrocessionaires may avoid liability due to broker’s 

misrepresentations. 

Michigan Nat’l Bank-Oakland v. American Centennial Ins. Co. et al., 89 

N.Y.2d 94, 674 N.E.2d 313, 651 N.Y.S.2d 383 (N.Y. 1996). 

Compagnie de Reassurance d’Ile de France v. New England Reinsurance 

Corp., 944 F. Supp. 986 (D.Mass. 1996). Retrocedent owes fiduciary duty 

to retrocessionaires. 

International Surplus Lines Ins. Co. v. Fireman’s Fund Ins. Co., 1989 WL 

99771 (N.D.Ill. 1989), on reconsideration, 1989 WL 165045. No fiduciary 

duty needed. 

Mutuelle Generale Francaise Vie v. Life Assur. Co. of Pennsylvania, 688 F. 

Supp. 386 (N.D.Ill. 1988). 

Cf. American Re-Ins. Co. v. MGIC Investment Corp., No. 77 CH 1457 

(Cir.Ct. Cook Cty., Ill. Oct. 20, 1987). Treaty situation; fiduciary duty 

found. 

Calvert Fire Ins. Co. v. Unigard Mut. Ins. Co., 526 F. Supp. 623 (D.Neb. 

1980) aff’d, 676 F.2d 707 (8th Cir. 1982). 

A/S Ivarans Rederei v. Puerto Rico Ports Authority, 617 F.2d 903 (1st Cir. 

1980). 

Security Mut. Cas. Co. v. Transport Indem. Co., 66 Cal.App.3d 1009, 136 

Cal.Rptr. 365 (1977). 

• Extrinsic evidence is admissible to demonstrate parties’ intent when reinsurance 

agreement is ambiguous. 

Physicians Professional Services Organization Inc. v. Combined Insurance 

Co. of America, et al., 345 F. Supp.2d 214 (D. R.I. 2004). Where new 

terms incorporated into final copy of reinsurance policy are ambiguous 

and significantly change coverage under body of policy, extrinsic evidence 

is appropriate to determine whether duty of good faith was breached 

and parties’ intent at onset of the contract. 

• Cedent provided false information in response to specific inquiry or application 

question. 

General Reinsurance Corp. v. Southern Sur. Co., 27 F.2d 265 (8th Cir. 

1928). 

2 Current U.S. Reinsurance Claim Issues | © 2013 Tressler LLP

• Reinsurance contract voided based on fraud in the inducement. 

In re Liquidation of Union Indemnity, 234 A.D.2d 120, 651 N.Y.S.2d 436 

(N.Y. App. Div. 1996). 

Curiale v. AIG Multi Line Syndicate Inc., 204 A.D.2d 237, 613 N.Y.S.2d 360 

(N.Y. App. Div. 1994). 

• If misrepresentation, rescission is probable remedy. 

Gulf Ins. Co. v. Transatlantic Reinsurance Co., et al. Index No. 601602/03 

(Supreme Court of New York, County of New York, November 21, 2007). 

Unresolved issues of fact as to whether reinsured had undervalued its 

loss ratio and failed to disclose increased loss frequencies warranted 

denying reinsured’s motion for summary judgment on the reinsurer’s 

rescission claim. 

Houston Cas. Co. v. Certain Underwriters at Lloyd’s London, 51 F. Supp. 

2d 789 (S.D.Tex. 1999), aff’d, 252 F.3d 1357 (5th Cir. 2001). Reinsurance 

broker’s misstatement, made without any intent to mislead or defraud. 

Mercantile General Reinsurance Co. v. Colonial Assurance Co., et al., 82 

N.Y.2d 248, 624 N.E.2d 629, 604 N.Y.S.2d 492 (N.Y. 1993). 

• Reinsurance broker may be subject to intermediary liability for negligently 

providing material misinformation. 

United Nat’l Ins. Co. v. Aon Ltd., No. 04-539, 2008 U.S. Dist. LEXIS 28249 

(E.D. Pa. April 7, 2008). Motion for judgment as a matter of law denied, at 

2008 U.S. Dist. LEXIS 98747 (E.D. Pa. Dec. 4, 2008) stating record evidence 

existed to preclude a finding as a matter of law. 

• Claim that reinsurance intermediary breached fiduciary duty by failing to 

secure most favorable reinsurance terms properly denied where plaintiff could 

not properly support such an assertion. 

Workmen’s Auto Insurance Co. v. Guy Carpenter & Co., Inc, No. 

B211660 c/w B213853, 2012 Cal. App. Unpub. LEXIS 1601 (Cal. App. 2nd 

Dist. 2012). 

• Reinsurance contract voided insofar as intermediary failed to get special 

approval from reinsurer. 

Scottsdale Ins. Co v. Am. Re-Insurance Co., No. 06-cv-00016, 2008 WL 

2001750 (D. Neb. May 6, 2008). Where contract limited the ability of 

wholesale insurance intermediary to bind reinsurer to coverage for 


certain activities without special acceptance from reinsurer, 

intermediary’s failure to get such permission voided the reinsurance 

contract. 

• Reinsured’s fraud in the inducement warranted punitive damages. 

AXA Versicherung AG v. N.H. Ins. Co., No. 05-cv-10180, 2008 WL 1849312 

(S.D.N.Y. April 22, 2008), remanded, at 2009 U.S. App. LEXIS 21923 (2d 

Cir. Oct. 6, 2009). Second Circuit remands matter back to district court to 

establish record relevant to its “fraudulent inducement” finding, and 

whether insurer had waived its right to arbitrate. On remand, at 2010 

U.S. Dist. LEXIS 42060 (S.D.N.Y April 29, 2010). The district court found 

the fraudulent inducement claim was not within the scope of the 

arbitration clause because it did not “‘aris[e] out of the interpretation’ of 

the contracts”, and that AIG had waived its arbitral rights. Aff’d in part, 

judgment vacated in part and remanded for entry of judgment, at 2010 

U.S. App. LEXIS 17645 (2d Cir. Aug. 23, 2010). Second Circuit affirmed the 

district court’s finding that AXA’s allegations sounded in fraud, but 

vacated the judgment against AIG because AXA’s fraudulent inducement 

claims were barred by the statute of limitations. 

• No duty of good faith if cedent specifically contracted to avoid such a duty. 

PXRE Reinsurance Co. v. Lumbermens Mut. Cas. Co., No. 03 C 5155, 2004 

WL 1166631 (N.D. Ill. 2004), motion for reconsideration denied, 330 F. 

Supp.2d 981 (N.D. Ill. 2004). Utmost good faith standard does not 

override express contractual limitations. 

Harleysville Mutual Ins. Co. v. GE Reinsur. Corp., 2002 U.S. Dist. LEXIS 

8064 (E.D. Pa. May 6, 2002). 

• If cedent shows it disclosed all available information, no material 

misrepresentation. 

American Special Risk Ins. Co. v. Greyhound Dial Corp., 1996 WL 551659 

(S.D.N.Y. 1996), motion to amend denied, 1997 WL 115637 (S.D.N.Y. 

1997). 

Christiania General Ins. Corp. v. Great American Ins. Co., 745 F. Supp. 150 

(S.D.N.Y. l990), aff’d in part, rev’d in part, remanded, 979 F.2d 268 (2nd 

Cir. 1992). The relationship between an insurer and a facultative 

reinsurer does not rise to the fiduciary level. 

New Hampshire Ins. Co. v. Philadelphia Reinsurance Corp., Nos. 90-15588 

and 90-15858 (9th Cir. 1990). 


Old Reliable Fire Ins. Co. v. Castle Reinsurance Co., 665 F.2d 239 (8th Cir. 

1981). 

• Whether non-disclosure of information is material is a question of fact. 

Compagnie De Reassurance v. New England Reinsurance Corp., 57 F.3d 

56 (1st Cir.) cert. denied, 516 U.S. 1009, 116 S.Ct. 564, 133 L.Ed.2d 490 

(1995), on remand to 944 F. Supp. 986 (D.Mass. 1996). 

Reliance Ins. Co. v. Certain Member Cos., 886 F. Supp. 1147 (S.D.N.Y. 

1995), aff’d, 99 F.3d 402 (2d Cir. 1995). 

American Home Assurance Co. v. Fremont Indem. Co., 745 F. Supp. 974 

(S.D.N.Y. 1990). 

• Reinsurance relationship not fiduciary. 

Employers Reinsurance Corp. v. Massachusetts Mut. Life Ins. Co., 654 

F.3d 782 (W.D. Mo. 2007), later proceeding at 2008 US Dist. LEXIS 69756 

(W.D. Mo. June 6, 2008), summary judgment granted by, partial summary 

judgment granted by, motion denied by as moot, motion to strike denied 

by 2008 US Dist. LEXIS 63420 (W.D. Mo. August 19, 2008), Court found 

that the reinsurance contract contained a follow the settlements 

provision and the reinsurer was obligated to follow the settlement 

decisions of the reinsured. Aff’d, 654 F.3d 782 (8th Cir. 2011), the Eighth 

Circuit, discerning no ambiguity in the reinsurance contract, concluded 

that it contained a follow-the-settlements provision. Later proceeding on 

other issues at 2010 U.S. Dist. LEXIS 85326 (W.D. Mo. Aug. 19, 2010). 

PXRE Reinsurance Co. v. Lumbermens Mut. Cas. Co., No. 03 C 5155, 2004 

WL 1166631 (N.D. Ill. 2004), motion for reconsideration denied, 330 F. 

Supp.2d 981 (N.D. Ill. 2004). 

United States v. Brennan, 938 F. Supp. 1111 (E.D.N.Y. 1996), rev’d on 

other grounds, 183 F.3d 139 (2d Cir. 1999). In dicta, stated that there is 

substantial reason to conclude that the reinsurance relationship at issue 

was not fiduciary. 

• Contractual relationship between parties for the creation of an off-shore 

reinsurance program known as a “Rent-A-Captive” may give rise to a fiduciary 

relationship between the parties. 

WEB Mgmt. LLC v. Arrowood Indem. Co., No. 3:07-cv-424, 2008 WL 

619310 (D. Conn. 2008). 


• Cedent’s managing general underwriter has no duty of disclosure to reinsurer. 

Odyssey Re (London) Ltd. v. Stirling Cook Brown Holdings, Ltd., 85 F. 

Supp. 2d 282 (S.D.N.Y. 2000), aff’d, 242 F.3d 366 (2d Cir. 2001). 

B. At The Time Of Resolution Of Underlying Claim 

Suter v. General Accident Ins. Co. of America, 2006 U.S. Dist. LEXIS 48209 

(D.N.J. 2006), vacated pursuant to settlement by, Goldman v. General 

Acc. Ins. Co. of America, 2007 WL 2781935 (D.N.J. May 24, 2007). 

Reinsured did not undertake a reasonable, businesslike investigation nor 

make a reasonable determination about whether the underlying claims 

were covered under its excess policies, thus, reinsured’s allowance of 

underlying claims was grossly negligent, amounted to bad faith, and 

reinsurer was not obligated to pay. 

American Employers’ Ins. Co. v. Swiss Reinsurance America Corp., 413 

F.3d 129 (1st Cir. 2005). Cedent’s settlement of underlying pollution 

claims based on only subset of those claims is consistent with modern 

practice in similar cases and does not demonstrate lack of good faith. 

Unigard Security Ins. Co. v. North River Ins. Co., 4 F.3d 1049 (2nd Cir. 

1993). 

C. At The Time Of Presentation Of Reinsurance Claim 

• The follow the fortunes clause only binds the reinsurer where “the insurers have 

acted honestly and have taken all proper and businesslike steps in making the 

settlements.” 

Allstate Ins. Co. v. Am. Home Assurance Co., 43 A.D. 3d 113 (N.Y. App. 

Div. 1st Dept. 2007). Cedent’s inconsistent positions in regard with the 

number of occurrences showed that it was not acting in good faith in its 

post settlement allocation of loss with its reinsurer. 

American Marine Ins. Group v. Neptunia Ins. Co., 775 F.Supp. 703 

(S.D.N.Y. 1991), aff’d, 961 F.2d 372 (2d Cir. 1992). 

Employers Reinsurance Corp. v. Ins. Co. of the State of Pennsylvania, No. 

96 Civ. 9458 (S.D.N.Y. 1996). 

• If cedent operates treaty in manner inconsistent with treaty’s terms but 

reinsurer cannot show any damages, duty is not breached. 

Unigard Security Ins. Co. v. Kansa Gen. Ins. Co., 42 F.3d 1402 (9th Cir. 

1994). 


• A reinsurer owes neither a fiduciary duty to its cedent, nor may be liable for bad 

faith or extracontractual liability. 

Brand v. AXA Equitable Life Ins. Co., No. 08-2859, 2008 U.S. Dist. LEXIS 

69661 (E.D. Pa. Sept. 16, 2008). Court granted reinsurer’s motion to 

dismiss bad faith claim brought by original insured finding that the 

reinsurer did not qualify as an insurer for purposes of assessing liability 

under Pennsylvania’s bad faith statute. 

Cal. Joint Powers Ins. Auth. v. Munich Reinsurance Am., Inc., No. cv-08- 

956, 2008 WL 1885754 (C.D. Cal. 2008). California courts do not permit 

recovery in tort in the reinsurance context. Thus, claims against reinsurer 

for breach of the covenant of good faith and fair dealing are 

unsustainable. 

Gaffer Ins. Co., Ltd. v. Discover Reinsurance Co., et al., 2007 WL 2972580 

(M.D. Pa. 2007). Pennsylvania’s bad faith statute, 42 Pa. Cons. Stat. Ann. 

§ 8371, does not apply to reinsurance agreement. Additionally, 

Pennsylvania’s limited “insurance exception” to the general prohibition 

against an independent cause of action for breach of the duty of good 

faith and fair dealing does not apply in the reinsurance context. 

Houston Cas. Co. v. Lexington Ins. Co., Civil Action No. 4:05-CV-01804 

(S.D. Tx. 2007). Magistrate Judge concluded that Texas Insurance Code 

article 21.55 does not apply to a reinsurance claim. While the Magistrate 

concluded that reinsurance did qualify as a “policy of insurance” under 

the statute, a claim for reinsurance did not qualify as “a first party claim” 

under article 21.55. 

Stonewall Ins. Co. v. Argonaut Ins. Co., 75 F.Supp. 2d 893 (N.D.Ill. 1999). 

• Reinsurer may be held liable for bad faith damages through conduct rising to the 

level of unfair or deceptive business practices. 

Commercial Union Ins. Co. v. Seven Provinces Ins. Co. Ltd., 217 F.3d 33 

(1st Cir. 2000), cert. denied, Seven Provinces Ins. Co. v. Commercial Union 

Ins. Co., 121 S.Ct. 1084 (2001). In affirming a judgment awarding bad 

faith damages, the 1 st Circuit Court of Appeals found that a reinsurer’s 

conduct of raising multiple, shifting defenses and engaging in a “lengthy 

pattern of foot-dragging and stringing [the cedent] along,” with the 

intent to pressure settlement was “extortionate” in nature, and sufficient 

to warrant double damages, plus attorneys’ fees and costs under M.G.L. 

ch. 93A, §11. 


Trenwick America Re. Corp., et al. v. IRC Inc., et al., 764 F.Supp. 2d 274 (D. 

Mass. Feb. 16, 2011). Retrocesssionaire’s “outrageous” conduct results in 

imposition of double damages, plus attorney fees and costs under 

Massachusetts General Laws c. 93A § 2(a). Awarding fees under chapter 

93A at 2011 U.S. Dist. LEXIS 54857 (D. Mass. May 23, 2011). 

• Reinsurer may be fiduciary under ERISA. 

Vescom Corporation v. Merrion Reinsurance Company, No. 01-CV-146-bs 

(D. Maine 2003), 2003 U.S. Dist. LEXIS 17287. Following a default 

judgment, attorney’s fees were awarded against a reinsurer who 

allegedly breached its ERISA fiduciary duties by failing to process and pay 

the claims it received as the reinsurance carrier for the insured’s 

employee health benefit plan. 

• Captive reinsurer may be liable for fraud, false promises and misrepresentation 

in the face of allegations that insured purposely under-capitalized captive 

reinsurer so as to make it unable to comply with financial obligations. 

Mills v. Ramona Tire Co., No. 07-cv-0052, 2007 US Dist. LEXIS 89438 (S.D. 

Cal. Dec. 5, 2007), defendant’s motion for summary judgment granted by 

2009 U.S. Dist. LEXIS 43525 (S.D. Cal. May 22, 2009). Court held that the 

plaintiff’s fraud based claims were time-barred and the remaining claims 

presented no genuine issue of material fact. 

• Illinois law does not recognize an independent cause of action for breach of duty 

of utmost good faith. 

Guarantee Trust Life Ins. Co. v. Insurers Administrative Corp., et al., 2010 

U.S. Dist. LEXIS 101088 (N.D. Ill. Sept. 23, 2010). 

II. 

Follow The Fortunes/Follow The Settlements 

“Follow the fortunes” describes the obligation of the reinsurer to follow the cedent’s 

underwriting fortunes. “Follow the settlements” characterizes the duty of the reinsurer to 

follow the cedent’s claim handling. Although courts sometimes confuse the two, issues are 

most often resolved using the “follow the settlements” standard. 

• Whether a custom and usage to “follow the settlements” exists is a question of 

fact. 


Mass. Feb. 16, 2011). Follow the fortunes doctrine can be established 

through expert testimony regarding industry custom and practice. 


North River Ins. Co. v. Employers Reinsurance Corp., 197 F.Supp.2d 972 

(S.D. Ohio 2002). It is a question of fact whether the “follow the 

settlements” clause can be implied by custom and practice. 

Nat’l American Ins. Co. v. Certain Underwriters at Lloyd’s London, 93 F.3d 

529 (9th Cir. 1996). Custom and usage can be basis for implying “follow 

the settlements” clause in policy; question of fact precluded summary 

judgment as to whether custom or usage to follow settlements existed 

when certificates were made. 

• Reinsurer is not obligated by the reinsured’s settlement decisions where there is 

no “follow the settlements” clause in the reinsurance agreement. 

Employer Reinsurance Corp. v. Laurier Indemnity Co., No. 8:03cv1650; 

2006 U.S. Dist. LEXIS 40451 (M.D. Fla. June 25, 2007). 

American Motorists Ins. Co. v. American Re-Insurance Co., 2007 U.S. Dist. 

LEXIS 41257 (N.D. Cal. May 29, 2007). “Follow the settlements” provision 

cannot be read into a certificate of facultative reinsurance contract as a 

matter of law. 

North River Ins. Co. v. Employers Reinsurance Corp., 2002 U.S. Dist. LEXIS 

11711 (S.D. Ohio June 3, 2002). Court found there was no reinsurance 

custom or practice implying a duty on behalf of the reinsurer to “follow 

the settlements” of the reinsured in the absence of an express clause. 

North River Ins. Co. v. Employers Reinsurance Corp., 197 F.Supp.2d 972 

(S.D. Ohio 2002). Finding no sound basis for implying the “follow the 

settlements” clause as a matter of law. 

Village of Thompsonville v. Federal Ins. Co., 233 Mich.App. 422, 592 

N.W.2d 760 (1999). 

Michigan Millers Mut. Ins. Co. v. North American Reinsurance Corp., 182 

Mich.App. 410, 452 N.W.2d 841 (1990). “Although it is true that parties 

may agree to such terms in reinsurance as will bind the reinsurer to the 

settlement or adjustment of loss made between the parties to the 

original insurance, we will not impose liability on the reinsurer for a 

settlement contribution absent such an agreement.” (internal citation 

omitted). 


• Follow-the-settlement language can vary such that the court may construe 

multiple contractual provisions taken collectively to create an express followthe-settlement 

provision. 

Employers Reinsurance Co. v Mass. Mut. Life Ins. Co., 654 F.3d 782 (8 th 

Cir. June 14, 2011). 

• Where reinsurer was not required to “follow the settlements,” the cedent bears 

the burden of establishing that the underlying claim was covered by the 

reinsured certificate of insurance. 

American Motorists Ins. Co., as successor in interest to Specialty National 

Ins. Co. and subsidiary of Lumbermens Mut. Cas. Co. v. American Re- 

Insurance Co., 2007 WL 4197427 (N.D. Cal. 2007). 

• Follow-the-settlements doctrine inapplicable as between reinsurer of excess 

insurer and primary insurer. 

Texas Farmers Ins. Co. v. Lexington Ins. Co., No. 08-55835, 2010 U.S. App. 

LEXIS 10427 (9th Cir. May 21, 2010). 

• Where facultative certificate is silent as to a definition for "loss" and/or 

"expense," such terms will be defined pursuant to the underlying policies and 

the reinsurer’s liability follows that of the cedent. 

ACE Prop. & Cas. Ins. Co., et al. v. R&Q Reinsurance Co., 2012 Phila. Ct. 

Com. Pl. LEXIS 128 (May 15, 2012). 

• The duty to “follow the settlements” can be implied in the reinsurance 

agreement. 


Mass. Feb. 16, 2011). Follow the fortunes doctrine can be established 

through expert testimony regarding industry custom and practice. 

Aetna Cas. & Sur. Co. v. Home Ins. Co., 882 F.Supp. 1328 (S.D.N.Y. 1995). 

It is custom and practice to “follow the settlement” decisions of the 

ceding company even in the absence of an explicit loss settlement clause. 

International Surplus Lines Ins. Co. v. Certain Underwriters & 

Underwriting Syndicates at Lloyd’s of London, 868 F.Supp. 917 (S.D. Ohio 

1994). “It is commonly understood that the reinsurers must ‘follow the 

fortunes’ of their insured. This fact may be formally expressed in an 

agreement of reinsurance. Even if it is not, the ‘Follow the Fortunes’ 

doctrine applied to all reinsurance contracts.” 


ReliaStar Life Ins. Co. v. IOA Re, Inc., 303 F.3d 874 (8th Cir. 2002). “Follow 

the fortunes” implied where reinsurer and retrocessionaire’s experts 

agreed “follow the fortunes” customarily applies in reinsurance business, 

and retrocession contract did not incorporate terms of reinsurance 

contract requiring strict proof of coverage. 

• “Follow the settlements” requires payment where the cedent’s good faith 

payment is arguably covered. 

United States Fid. & Guar. Co., et al. v. Am. Re-Ins. Co., et al., 2012 N.Y. 

App. Div. LEXIS 416 (N.Y. App. Div. Jan. 24, 2012). Reinsurers were 

required to accept the cedent’s $262 million asbestos reinsurance 

presentation under the follow the fortunes doctrine, including the 

reinsured’s allocation decisions. 


Mass. Feb. 16, 2011). “Doctrine does not allow a reinsurer to raise 

defenses that the reinsured has already decided to waive in good faith.” 

Global Reinsurance Corp. v. Argonaut Ins. Co., 634 F. Supp. 2d 342 

(S.D.N.Y. 2009); U.S. Dist. LEXIS 37460 (March 23, 2009). Holding that 

there was no “manifest disregard of the law” since the Panel found that 

the claims at issue were covered by the original reinsurance contracts, 

and thus, the panel properly applied the “follow-the-fortunes/follow-thesettlements” 

doctrine to the scope of the retrocession agreements. 

Employers Reinsurance Corp. v. Massachusetts Mut. Life Ins. Co., No. 06- 

0188-cv-w-fjg, 2008 U.S. Dist. LEXIS 63420 (W.D. Mo. Aug. 19, 2008). 

Since court interpreted contract as containing an express “follow-thesettlements” 

provision (also relying on course of conduct), an excess 

disability income reinsurer may not question the claims handling 

practices of its reinsured. 

Columbia Cas. Co. v. TransFin Ins. Ltd., No. 2:05-CV-199 (D. Vt. April 27, 

2007). Court finds that cedent properly settled underlying claims against 

insured, thereby triggering reinsurer’s duty to “follow the settlements.” 

National Union Fire Ins. Co. of Pittsburgh, Pa. v. American Re-Insurance 

Co., 441 F.Supp.2d 646 (S.D.N.Y. 2006). Reinsured’s payment in 

settlement of claims against insured were at least arguably within scope 

of reinsured policy, thus, reinsurer was required to “follow the fortunes” 

of the reinsured. 



Co., No. 03-6999 (S.D.N.Y.), 2005 U.S. LEXIS 37, reprinted in Mealey’s 

Litigation Report: Reinsurance, Vol. 15, No. 18 (01/20/05); upheld, 2005 

U.S. Dist. LEXIS 927. Court found that pollution exclusion in reinsurance 

certificate was overbroad and thus ambiguous, and since there was 

arguably coverage for the underlying claims under the reinsured policy, 

reinsurer was required to “follow the fortunes” of the reinsured. 

Commercial Union Ins. Co. v. Swiss Reinsur. America Corp., 413 F.3d 121 

(1st Cir. 2005). “Follow the fortunes” bound reinsurer to cedent’s 

annualization of occurrence limits in underlying settlement. 

American Employers’ Ins. Co. v. Reinsurance America Corp., 413 F.3d 129 



Travelers Casualty & Surety Co. v. Gerling Global Reinsurance Corp. of 

America, 419 F.3d 181 (2d Cir. 2005). Reinsurer is obligated to “follow 

the fortunes” of cedent’s post-settlement single occurrence allocation 

regardless of whether the allocation reflects a position initially taken by 

the cedent. 

Riunione Adriatica di Sicurta v. Atlanta International Ins. Co., 264 A.D.2d 

959, 697 N.Y.S.2d 228 (N.Y. App. Div. 1998). Reinsurer required to 

indemnify for payments reasonably within the terms of the original policy 

even if not technically covered by it. 

North River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194 (3d Cir. 

1995). “‘[F]ollow the fortunes” doctrine… requires indemnification for all 

payments made in good faith that are reasonably within the scope of the 

policy’s coverage.” 

Aetna Cas. & Sur. Co. v. Home Ins. Co., 882 F.Supp. 1328 (S.D.N.Y. 1995). 

“[T]he court’s review is limited to deciding whether the ceding company, 

through a reasonable and businesslike inquiry, concluded that the claim 

was arguably covered, and hence properly one to be settled. It is only 

when the ceding company pays a claim that is manifestly outside the 

scope of the cedent’s policy coverage that the reinsurer may successfully 

challenge the ceding company’s interpretation and avoid the obligation 

to follow its settlement fortunes.” 


International Surplus Lines Ins. Co. v. Certain Underwriters & 

Underwriting Syndicates at Lloyd’s of London, 868 F.Supp. 917 (S.D.Ohio 

1994). “Follow the settlements” requires the reinsurer to reimburse the 

reinsured for payment of a settled claim so long as the settlement was 

made reasonably and in good faith. 

Mentor Ins. Co. (U.K.) Ltd. v. Brannkasse, 996 F.2d 506 (2nd Cir. 1993). 

“The follow-the-fortunes principle does not change the reinsurance 

contract; it simply requires payment where the cedent’s good-faith 

payment is at least arguably within the scope of the insurance coverage 

that was reinsured.” 

Christiania General Ins. Corp. v. Great American Ins. Co., 979 F.2d 268 (2d 

Cir. 1992). “Under the ‘follow-the-fortunes’ doctrine, a reinsurer is 

required to indemnify for payments reasonably within the terms of the 

original policy, even if not technically covered by it. A reinsurer cannot 

second guess the good faith liability decisions made by its reinsured, or 

the reinsured’s good faith decisions to waive defenses to which it may be 

entitled.” 

Unigard Security Ins. Co. Inc. v. North River Ins. Co., 762 F.Supp. 566 

(S.D.N.Y. 1991), aff’d and rev’d in part, 4 F.3d 1049 (2d Cir. 1993). 

“Follow the settlements” requires the reinsurer to indemnify for 

payments reasonably within the terms of the original policy, even if not 

technically covered by it. 

Royal Ins. Co. v. Caledonian Ins. Co., 182 Cal. 219, 187 P. 748 (1920). 

Pursuant to follow the settlements clause, the reinsurer was “in no 

position to object” to its cedent’s settlement decisions absent fraud or 

bad faith. 

• Under “follow the settlements,” the standard for determining whether the 

cedent’s payment was made in bad faith is more than mere negligence. 

Arrowood Indem. Co. v. Assurecare Corp., 2012 U.S. Dist. LEXIS 134368 

(N.D. Ill. Sept. 19, 2012). Applying Connecticut law, absent a showing of 

bad faith, collusion or fraud on the cedent’s part in entering into the 

settlement, a cedent’s decision to settle a claim regarding a coverage 

dispute may not be second guessed by the reinsurer. 

Lexington Ins. Co. v. Clearwater Ins. Co., No. 116324, 28 Mass. L. Rep. 

519; 2011 Mass. Super. LEXIS 127 (Mass. Sup. Ct. July 26, 2011). Mere 

inconsistencies in pre-settlement damage analyses is insufficient to avoid 

the binding principles of the follow-the-settlements doctrine, rather gross 

negligence must be present. 


Travelers Cas. & Sur. Co. v. Ins. Co. of N. Am., 609 F.3d 143; 2010 U.S. 

App. LEXIS 11689 (3rd Cir. June 9, 2010). In the post-settlement 

allocation context, in order to avoid the application of “follow the 

fortunes”, the reinsurer “must either provide direct evidence that the 

insurer was motivated primarily by reinsurance considerations, or show 

that the after-the-fact rationales offered by the insurer are not credible.” 


Co., 441 F.Supp.2d 646 (S.D.N.Y. 2006). Reinsurer who seeks to avoid 

application of “follow the fortunes” by claiming bad faith must make an 

“extraordinary showing of a disingenuous or dishonest failure.” 

ReliaStar Life Ins. Co. v. IOA Re, Inc., 303 F.3d 874 (8th Cir. 2002). 

American Bankers Ins. Co. v. Northwestern Nat’l Ins. Co., 198 F.3d 1332 

(11th Cir. 1999). Minimum standard for bad faith is deliberate deception, 

gross negligence or recklessness. 

North River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194 (3rd Cir. 

1995). “[B]ad faith requires an extraordinary showing of a disingenuous 

or dishonest failure to carry out a contract. The standard is not mere 

negligence, but gross negligence or recklessness.” 

Unigard Security Ins. Co. v. North River Ins. Co., 4 F.3d 1049 (2d Cir. 

1993). “[T]he proper minimum standard for bad faith should be gross 

negligence or recklessness.” 

• Even under “follow the fortunes” and “follow the settlements,” the loss must 

come within both the original policy and the reinsurance agreement before the 

reinsurer’s indemnity obligation arises. 

Arrowood Surplus Lines Ins. Co. v. Westport Ins. Corp., No. 08-cv-1393, 

2010 U.S. Dist. LEXIS 426 (D. Conn. Jan 5, 2010). Reinsurer is not 

obligated to “follow-the-fortunes” of the cedent in connection with the 

cedent’s settlement on an underlying policy spanning three years where 

the reinsurance agreement terminated after one year. aff’d at 2010 U.S. 

App. LEXIS 20951 (2d Cir. Oct. 8, 2010), reh’g denied (Dec. 16, 2010). 

Court found that a "follow the fortunes" provision cannot expand 

coverage beyond the express time limitations imposed by the 

reinsurance agreement. 

Am. Home Assurance, et al. v. Everest Reinsurance Co., et al., No. 

602485/06 (N.Y. Sup. Ct. May 27, 2010). Follow-the-settlements does not 

apply when cedent does not make a reasonable investigation into 

whether the underlying policies covered the claims that were settled, and 


the claims fell outside the scope of coverage afforded. Rev’d, judgment 

vacated, reinstated complaint regarding question of fact whether insurer 

settled in good faith at 90 A.D.3d 580 (N.Y. App. Ct. Dec. 27, 2011). 

City of Renton, et al. v. Lexington Ins. Co., et al., 2007 WL 2751356 (W.D. 

Wash. 2007). As the underlying loss did not fall within the scope of the 

original policy, the reinsurer was not required to “follow the settlement” 

of the reinsured. 

Nat’l Union Fire Ins. Co. v. Clearwater Ins. Co., 2007 WL 2106098 (S.D.N.Y. 

2007). Reinsurer provided sufficient evidence to demonstrate a genuine 

issue of material fact as to whether a portion of the underlying 

settlement was for claims that were not covered under the reinsurance 

certificates. 

Affiliated FM Ins. Co. v. Employers Reinsurance Corp., 369 F.Supp.2d 217 

(D. R.I. 2005). Defense costs are not “losses” under the reinsurance 

certificate, and thus reinsurer not obligated to reimburse these costs. In 

addition, claims incurred by cedent outside certificate period cannot be 

used to satisfy retention. 

Kenecott Utah Copper Corp. v. Cornhill Ins. plc, No. 3454, (Eng. Comm., 

QBD), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 10, No. 

15 (12/9/99). 

United Fire and Cas. Co. v. Arkwright Mut. Ins. Co., 53 F.Supp. 2d 632 

(S.D.N.Y. 1999). Facultative reinsurance certificate did not extend to 

coverages added by endorsement to reinsured policy and not disclosed 

to reinsurer. 

Village of Thompsonville v. Federal Ins. Co., 233 Mich. App. 422, 592 

N.W.2d 760 (1999). “The extent of the liability of the reinsurer is 

determined by the language of the reinsurance contract, and the 

reinsurer cannot be held liable beyond the terms of its contract merely 

because the original insurer has sustained a loss.” 

North River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194 (3d Cir. 

1995). “While a ‘follow the fortunes’ clause limits a reinsurer’s defenses, 

it does not make a reinsurer liable for risks beyond what was agreed 

upon in the reinsurance certificate.” A loss is unreinsured if it “was not 

contemplated by the original insurance policy or if it was expressly 

excluded by terms of the certificate of reinsurance.” 

Unigard Security Ins. Co. Inc. v. North River Ins. Co., 762 F.Supp. 566 

(S.D.N.Y. 1991), aff’d and rev’d in part, 4 F.3d 1049 (2d Cir. 1993). 


State Auto. Mut. Ins. Co. v. American Re-Insurance Co., 748 F.Supp. 556 

(S.D. Ohio 1990). A “follow the settlements” clause does not obligate the 

reinsurer beyond the terms of the reinsurance agreement. 

Michigan Millers Mut. Ins. Co. v. North American Reinsurance Corp., 182 

Mich. App. 410, 452 N.W.2d 841 (Ct.App. 1990). 

Central Nat’l Ins. Co. v. Prudential Reinsurance Co., 196 Cal.App.3d 342, 

241 Cal.Rptr. 773 (1987), reh’g denied (Feb. 4, 1988), opinion withdrawn 

(May 5, 1988). 

Independence Ins. Co. of California v. Republic Nat’l Life Ins. Co., 447 

S.W.2d 462 (Tex. Ct. App. 1969). 

• “Follow the settlements” cannot bind the reinsurer to the cedent’s ex gratia or 

voluntary settlement that is outside the scope of the underlying policy. 




Reinsurer not obligated to pay toward cedent’s settlement of faulty heart 

valve claims under follow the settlements provision because cedent’s 

payments were clearly beyond the scope of its excess policies, as most of 

the injuries occurred after the policy period. In addition, cedent did not 

undertake a reasonable, businesslike investigation and make a 

reasonable determination about whether the claims were covered under 

its excess policies. 

Lexington Ins. Co. v. Prudential Reinsurance Co. of America, No. 95-4083, 

(Mass. Super., Suffolk Co.), reprinted in Mealey’s Litigation Report: 

Reinsurance, Vol. 8, No. 1 (5/14/98). 

Commercial Union Assurance Co. v. NRG Victory Reinsurance Ltd., 1996 

Folio No. 1350 and Skandia International Ins. Corp. v. NRG Victory 

Reinsurance Ltd., 1997 Folio No. 1042, Eng.App. [1998] 2 Lloyd’s Rep. 

600. 

Hiscox v. Outhwaite, U.K. High Court, 1990 Folio No. 2491 [1991] 2 

Lloyd’s Rep. 524. 

American Ins. Co. v. North American Co. for Prop. & Cas. Inc., 697 F.2d 79 

(2d Cir. 1982). 

Insurance Co. of North America v. United States Fire Insurance Co., 322 

N.Y.S.2d 520 (Sup. Ct. 1971), aff’d, 42 A.D.2d 1056, 348 N.Y.S.2d 122 (1st 

Dep’t 1973). 


• Issues of fact as to whether bad faith and ex gratia payment exceptions to the 

“follow the fortunes” doctrine precluded summary judgment in favor of 

reinsurer 

Granite State Ins. Co. v. ACE Reins. Co., 46 A.D.3d 436, 849 N.Y.S.2d 201 

(1 st Dept. 2007). 

• “Follow the fortunes” does not obligate the reinsurer to reimburse the reinsured 

for declaratory judgment expenses. 

British Int’l Ins. Co. v. Seguros La Republica, S.A., 2001 U.S.Dist. LEXIS 

11453 (S.D.N.Y. 2001), aff’d, 342 F.3d 78 (2d Cir. 2003). “Follow the 

fortunes” does not obligate the reinsurer to reimburse declaratory 

judgment expenses since such costs are not for coverage owed to the 

insured or a claim against the reinsurer. 

• “Follow the fortunes” and “follow the settlements” do not override the 

limitation on liability. Therefore, a reinsurer is not liable for expenses in excess 

of policy limits. 

Pacific Employers Ins. Co. v. Global Reinsurance Corp. of America, No. 09- 

cv-06055, 2010 U.S. Dist. LEXIS 40506 (E.D. Pa. April 23, 2010) 

reconsideration denied by 2010 U.S. Dist. LEXIS 56758 (E.D. Pa. June 9, 

2010). Construing facultative certificate language stating “[the reinsurer] 

shall promptly pay its proportion of such loss [up to a $1 million cap] as 

set forth in the Declaration. In addition thereto, the Reinsurer shall pay 

its proportion of expenses. . . .”, expenses were found to be included 

within limits. Later proceeding on other issues at 2011 U.S. Dist. LEXIS 

41672 (E.D. Pa. Apr. 18, 2011) and at 2011 U.S. Dist. LEXIS 54825 (E.D. Pa. 

May 23, 2011), rev’d & remanded, 693 F.3d 417 (3d Cir. 2012). 

Excess Insurance Company v. Factory Mutual Ins. Co., 769 N.Y.S.2d 487, 

2003 N.Y. Slip Op. 19083 (App. Div. 2003), aff’d 2004 WL 2792537 (N.Y. 

2004). “Follow the settlements” does not obligate reinsurer to reimburse 

declaratory judgment expenses in excess of policy limits. 

Aetna Cas. & Sur. Co. v. Philadelphia Reinsurance Corp., 1995 WL 338488 

(E.D.Pa. 1995). Collateral estoppel based on Bellefonte Reinsurance Co. 

v. Aetna Cas. & Sur. Co., 903 F.2d 910 (2d Cir. 1990) (see below) 

precluded reinsured from relitigating the issue of whether the 

reinsurance certificates included the reinsured’s costs to defend the 

underlying insured. 


1993). Binding arbitration context. 


Bellefonte Reinsurance Co. v. Aetna Cas. & Sur. Co., 903 F.2d 910 (2nd 

Cir. 1990). Settlement context. 

• Application of “follow the fortunes” and “follow the settlements” to allocations. 

Lexington Ins. Co. v. Clearwater Ins. Co., No. 116324, 28 Mass. L. Rep. 

519; 2011 Mass. Super. LEXIS 127 (Mass. Sup. Ct. July 26, 2011). Followthe-fortunes 

and follow-the-settlements binds a reinsurer to postsettlement 

allocations absent gross negligence or bad faith on the part of 

the cedent. 

United States Fidelity & Guaranty Co., et al. v. American Re-Insurance Co., 

et al., 2010 N.Y. Misc. LEXIS 4315 (N.Y.Sup. Aug. 20, 2010). Reinsurer’s 

request to determine the actual amount recovered by each claimant 

through trust distribution procedure would amount to the kind of relitigation 

that the follow the fortunes doctrine seeks to preclude. Follow 

the settlements doctrine does not require a cedent to settle an 

underlying matter in such a way so as to have a lesser impact on its 

reinsurers. Aff’d at 2012 N.Y. App. Div. LEXIS 416 (N.Y. App. Div. Jan. 24, 

2012) finding the follow the fortunes doctrine required reinsurer to 

accept cedent’s reinsurance presentation and, therefore, precluding from 

the court’s review the reinsurer’s efforts to second guess the cedent’s 

decision concerning allocation. 

Travelers Cas. & Surety Co. v. Ins. Co. of North America, 609 F.3d 143; 

2010 U.S. App. LEXIS 11689 (3d Cir. June 9, 2010). Follow the fortunes 

doctrine applies to post-settlement allocation unless the reinsurer can 

demonstrate that the insurer’s post settlement allocation was not in 

good faith, (i.e., motivated primarily by reinsurance considerations or no 

credible rationales for allocation). However, a cedent may not allocate 

amounts beyond the limits of the reinsurance contracts. “A reinsurer 

cannot be held liable for a kind of loss that is did not agree to cover.” 

State of Oklahoma, ex rel. Kim Holland, Insurance Commissioner, as 

receiver of Hospital Cas. Co. v. Employers Reinsurance Corp., 2007 WL 

2703157 (W.D. Okla. 2007). Even if “follow of settlements” was implied, 

it did not permit the reinsured to re-allocate the risk among policy years 

in an effort to maximize its reinsurance recovery. 

Allstate Ins. Co. v. American Home Assurance, 837 N.Y.S.2d 138 (N.Y. App. 

Div. June 12, 2007). Reinsurer was not bound by “follow-the-fortunes” 

doctrine when cedent treated number of occurrences issue differently 

than post-trial settlement with policyholder in order to trigger 

reinsurance. 


The Hartford Accident and Indemnity Co. v. ACE American Reinsurance 

Co., 2005 WL 3663930 (Conn. Super. December 14, 2005). Cedent may 

not present 12,000 workers’ asbestos claims as one occurrence, as 

meaning of “occurrence” is each individual claimant’s initial exposure to 

asbestos and “follow the fortunes” does not apply. 

Travelers Insurance Co. v. ACE American Reinsurance Co., 392 F.Supp.2d 

659 (S.D.N.Y. 2005). Three year facultative reinsurance certificate 

covering losses on an “each occ.-agg.” basis must provide coverage for 

three annual aggregate limits where cedent provided such coverage and 

the reinsurance certificate contained a “follow the form” clause. 





F.3d 129 (1st Cir. 2005). “Follow the fortunes” bound reinsurer to 

cedent’s annualization of occurrence limits in underlying settlement. 





the cedent. 

Travelers Cas. & Sur. Co. v. Constitution Reinsur. Corp., 2004 WL 2387313 

(E.D. Mich. 2004), motion for reconsideration denied, reprinted in 

Mealey’s Litigation Report: Reinsurance, Vol. 20, No. 5 (12/01/05). Per 

occurrence limits of multi-year reinsurance contracts cannot be 

annualized, and “follow the fortunes” clause in reinsurance contracts 

does not override stated limits. 

North River Ins. Co. v. ACE American Reinsurance Co., 2002 U.S. Dist. 

LEXIS 5536 (S.D.N.Y. 2002), aff’d in relevant part, 361 F.3d 134 (2nd Cir. 

2004). Under “follow the fortunes”, to allow reinsurers to second-guess 

good faith methods of allocation would make settlement impossible and 

reinsurance problematic, and thus reinsurer must follow cedent’s postsettlement 

allocation. 

Travelers Cas. and Sur. Co. v. Certain Underwriters at Lloyd’s of London, 

96 N.Y.2d 583, 760 N.E.2d 319 (N.Y. 2001). Losses arising from long-term 

environmental pollution at numerous sites may not be aggregated as a 

single event; a “follow the settlements” clause does not alter the terms 

or override the language of reinsurance policies. 


Commercial Union Ins. Co. v. Seven Provinces Ins. Co. Ltd., 217 F.3d 33 

(1st Cir. 2000), cert. denied, Seven Provinces Ins. Co. v. Commercial Union 

Ins. Co., 121 S.Ct. 1084 (2001). Doctrine of “follow the settlements” 

requires the reinsurer to follow the reinsured’s good faith and reasonable 

allocation of settlement dollars for environmental liability between 

different policies and sites. 

Hartford Accident & Indem. Co. v. Columbia Cas. Co., 98 F.Supp.2d 251 

(D.Conn. 2000). Summary judgment denied based on issues of fact as to 

whether the cedent unreasonably settled and allocated an underlying 

environmental claim in order to maximize its reinsurance recovery. 

Aetna Cas. & Sur. Co. v. Certain Underwriters at Lloyd’s [of] London, No. 

118675/95 (N.Y.Sup.Ct.), reprinted in Mealey’s Litigation Report: 


• “Follow the settlement” and/or “follow the fortunes” doctrine held to be 

inapplicable. 

Texas Farmers Ins. Co. v. Lexington Ins. Co., No. 06-cv-08220 (C.D. Cal. 

Apr. 21, 2008), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 

19, No. 1 (5/2/2008). Although it was unclear whether reinsurance 

agreement contained express “follow the settlements” language, the 

doctrine did not bind reinsurer of an excess policy to follow the primary 

insurer’s settlement agreement. Aff’d at 2010 U.S. App. LEXIS 10427 (9th 

Cir. May 21, 2010). Ninth Circuit court agreed with district court that the 

doctrine did not apply since the excess carrier was not primary insurer’s 

reinsurer, and, therefore, could not incur liability under the “follow-thesettlement” 

doctrine. 




Reinsurer not obligated to pay toward cedent’s settlement of faulty heart 

valve claims under follow the settlements provision because cedent’s 

payments were clearly beyond the scope of its excess policies, as most of 

the injuries occurred after the policy period. In addition, cedent did not 

undertake a reasonable, businesslike investigation and make a 

reasonable determination about whether the claims were covered under 

its excess policies. 

The Hartford Accident and Indemnity Co. v. ACE American Reinsurance 

Co., 2005 WL 3663930 (Conn. Super. December 14, 2005). Cedent may 

not present 12,000 workers’ asbestos claims as one occurrence, as 


meaning of “occurrence” is each individual claimant’s initial exposure to 

asbestos and “follow the fortunes” does not apply. 

Argonaut Ins. Co. v. Travelers Ins. Co., No. 124063/2000 (N.Y. Sup., New 

York Co.), 2005 N.Y. Misc. LEXIS 20, reprinted in Mealey’s Litigation 

Report: Reinsurance, Vol. 15, No. 18 (01/20/05). 


(D. R.I. 2005). “Follow the fortunes” does not create coverage where 

none exists. 







Employers Reinsur. Corp. v. NewCap Ins. Co., 209 F.Supp.2d 1184 (D.Kan. 

2002). “Follow the settlement” doctrine did not apply since there had 

never been a decision to allocate the loss to one or the other of the two 

policies (HPL or CGL). 

• “Follow the fortunes” doctrine does not bar reinsurers from requesting discovery 

from insurer. 


2007). Reinsurer was entitled to the reinsured’s communication with its 

other reinsurers regarding the cedent’s settlement of the same reinsured 

loss. 

United States Fidelity & Guaranty Co. v. American Re-Insurance Co., No. 

02-604517 (N.Y. Sup. Ct. 2004), reprinted in Mealey’s Litigation Report: 

Reinsurance, Vol. 14, No. 23 (4/1/04), aff’d No. 6210 (N.Y. Sup. App. Div., 

1 st Dept. 2005), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 

16, No. 4 (06/23/05). 

III. 

Extra Contractual Obligations 

Reinsurance agreements generally cover only the cedent’s contractual obligations under 

the latter’s policy. The treaty or certificate language may, however, modify the reinsurer’s 

undertaking. Reinsurance for bad faith, tortuous infliction of emotional distress, punitive 

damages and declaratory judgment fees and expenses are some of the extra contractual issues 

discussed below. 


• Generally, damages arising out of the commission of torts are not covered. For 

example, reinsurance agreements routinely do not cover a cedent’s tortious, 

intentional or negligent infliction of emotional distress conduct. 

Reliance Ins. Co. v. River Road Recycling, Inc., 2003 U.S. Dist. LEXIS 9400 

(E.D. La. 2003). 

Reliance Ins. Co. v. General Reinsurance Corp., 506 F.Supp. 1042 (E.D. Pa. 

1980). 

• Bad faith. Absent specific reinsurance agreement provisions, indemnification for 

such amounts is not required. 

Duber Industrial Security. Inc. v. Allendale Mut. Ins. Co., 2nd Civ. No. 

69133 (Cal.Ct.App. Feb. 16, 1984) (unpublished opinion). 

Employers Reinsurance Corp. v. American Fidelity & Cas. Co., 196 F.Supp. 

553 (W.D. Mo. 1959). 

• Reinsurer liable for its portion of loss settlement payments related to bad faith 

claims as well as loss adjustment expenses when such claims are “arguably” 

within the scope of the reinsurance contract. 


(N.D. Ill. Sept. 19, 2012). Applying Connecticut law. 

• Reinsurers liable for bad faith judgments against their reinsureds where there is 

a “follow the fortunes” clause and the reinsurer was fully involved in the 

handling of the claim. 

Peerless Ins. Co. v. Inland Mut. Ins. Co., 251 F.2d 696 (4th Cir. 1958). 

• Reinsurer is subject to a direct action by the original claimant for the bad faith 

actions of the reinsured. 

Ott v. All-Star Ins. Corp., 299 N.W.2d 839 (Wis. 1981). 

• Punitive damages. Generally reinsurance companies are not held liable beyond 

the limits of liability as stated in the agreement. 

American Ins. Co. v. North American Co. for Prop. & Cas. Ins., 697 F.2d 79 

(2d Cir. 1982). 


• Reinsurer has no obligation to indemnify for punitive damages because a 

contract that indemnifies a party for its own wrongdoing is against public policy. 

AIU North America, Inc. v. Caisse Franco Neerlandaise de 

Cautionnements, 72 F.Supp.2d 350 (S.D.N.Y. 1999). 

• Reinsurance agreement covering punitive damages enforced under arbitration 

agreement that allowed arbitrators to abstain from following strict rules of law. 

Hartford Fire Ins. Co. v. Lloyd’s Syndicate 0056 Ash, 1997 U.S.Dist. LEXIS 

10858 (D.Conn. 1997). 

• Reinsured’s settlement including punitive damages based on the insured’s 

vicarious liability for the acts of another qualify as “loss” within the meaning of 

the reinsurance policy. 



2703157 (W.D. Okla. 2007). 

• Reinsurance for declaratory judgment action expenses. 


(N.D. Ill. Sept. 19, 2012). Applying Connecticut law, reinsurer liable for 

its portion of loss settlement payments related to bad faith claims as 

well as loss adjustment expenses when such claims are “arguably” 

within the scope of the reinsurance contract. 

Fireman’s Fund Insurance Co. v. General Reinsurance Corp., 2005 WL 

1865424 (N.D.Cal. August 5, 2005). Reinsurer is liable for cedent’s 

underlying declaratory judgment expenses. 

Folksamerica Reinsurance Co. v. Republic Ins. Co., No. 03 Civ. 0402 [HB], 

2004 U.S. Dist. LEXIS 21703 (S.D.N.Y. 2004). Cedent is not entitled to 

recover attorney fees incurred in defending itself in a declaratory action 

brought against it by reinsurer seeking to settle its rights, unless reinsurer 

had a duty to defend under the contract. 

Excess Insurance Company v. Factory Mutual Ins. Co., 769 N.Y.S.2d 487, 

2003 N.Y. Slip Op. 19083 (App. Div. 2003), aff’d 2004 WL 2792537 (N.Y. 

2004). “Follow the settlements” does not obligate reinsurer to reimburse 

declaratory judgment expenses in excess of policy limits. 

Employers Ins. Co. of Wausau v. American Re-Insurance Co., 256 F. Supp. 

2d 923 (W.D. Wis. 2003). Reinsurer liable for 80% of cedent’s declaratory 

judgment defense costs because these costs were encompassed within 


definition of “allocated loss expenses” and contract did not exclude 

declaratory judgment expenses. 

Employers Reinsurance Corp. v. Mid-Continent Casualty Co., 202 

F.Supp.2d 1221 (D.Kan. 2002), aff’d 358 F.3d 757 (10th Cir. 2004). 

• Reinsurer held liable for declaratory judgment expenses incurred by the cedent 

and its policyholders. 

British International Ins. Co. v. Seguros La Republica, S.A., 2001 U.S.Dist. 

LEXIS 11453 (S.D.N.Y. 2001), aff’d 342 F.3d 78 (2d Cir. 2003). “Follow the 

fortunes” does not obligate the reinsurer to reimburse the reinsured for 

declaratory judgment expenses. 

Affiliated FM v. Constitution Reins. Corp., 416 Mass. 839, 626 N.E.2d 878 

(1994). Holding that summary judgment was improper because a factual 

issue was raised as to whether an insurer was entitled to reimbursement 

from a reinsurer for legal expenses incurred in defending a declaratory 

action brought by an insured where the meaning of the word “expenses” 

was ambiguous. 

• Reinsurance for underlying defense costs. 


(D. R.I. 2005). Defense costs are not “losses” under the reinsurance 

certificate, and thus reinsurer not obligated to reimburse these costs. 

• Reinsurers have no duty to ascertain existence of unknown assignees 

Banco Ficohsa v. Aseguradora Hondurena S.A., 937 So.2d 161 (Fla.App. 

2006), reh’g denied, September 11, 2006. Where reinsurance contract is 

silent as to the obligation of a reinsurer to ascertain the existence of an 

assignee, reinsurers are under no duty to ascertain the existence of 

unknown assignees before settling a claim. 

IV. 

Insolvency Of Reinsurer 

Given today’s uncertain financial markets and institutions, this issue will, unfortunately, 

continue to challenge both the insurance and reinsurance industries. 

• Court prohibits actions against insolvent reinsurer. 

Amcomp Preferred Ins. Co. v. Koken, 916 So.2d 986 (Fla. App. 2005). 

Reinsurer’s liquidator not required to arbitrate against cedent to recover 

preferential payment. 


Vesta Fire Ins. Corp. v. New Cap Reinsurance Corp., 244 B.R. 209 (S.D.N.Y. 

2000), aff’d, In re McKenna, 238 F.3d 186 (2d Cir. 2001). Foreign receiver 

entitled to stay of ongoing arbitration by commencing ancillary 

bankruptcy proceedings. 

In Re Petitions of Magnus Pousette, et al., Nos. 95-B-40385 and 95-B- 

40386 (S.D.N.Y.), reprinted in Mealey’s Litigation Report: Reinsurance, 

Vol. 5, No. 20 (2/22/95). 

In Re Petition of Philip J. Singer, et al., No. MI 93-00140 U.S.Bkcy.Ct. 

(C.D.Cal. Dec. 1, 1993). 

• Court prohibits action against insolvent reinsurer’s retrocessionaires in U.S. 

courts. 

• Setoffs permissible. 

In Re Petition of the Board of Directors of Hopewell International 

Insurance Ltd., 281 B.R. 200 (S.D.N.Y. 2002). 

Stephens, Commissioner of Ins. v. Federal Ins. Co., 1995 WL 702385 

(S.D.N.Y. 1995), aff’d, Rich, Commissioner of Ins. v. Federal Ins. Co., 113 

F.3d 1230 (2d Cir. 1997). 

• Setoffs only allowed as to mutual debts and credits between companies. 

In Re Mission Ins. Co., 41 Cal.App.4th 828, 48 Cal.Rptr.2d 209 (Cal. App. 

2d Dist. 1995). 

• Setoffs not limited to claims arising from same transaction. 

Harold T. Duryee v. The American Druggists’ Ins. Co., No. 86 CV 03-1381, 

(Ohio C.P.), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 6, 

No. 17 (1/17/96). 

• Liquidators of insolvent reinsurer permitted to question auditors regarding 

financial statements it prepared for reinsurer. 

In Re Subpoenas to Mr. John Slusarski and Ms. Kristin Meehan, No. 01- 

16090 (S.D.N.Y. 2002), reprinted in Mealey’s Litigation Report: 



• Solvent member of an insolvent casualty reinsurance must pay reinsurance 

recoverables, less certain offsets, to a creditor of the pool. 

B.D. Cooke & Partners Ltd. v. Nationwide Mutual Insurance Co., No. 

600655/02, (N.Y. Sup. N.Y. Co. 2003), reprinted in Mealey’s Litigation 

Report: Reinsurance, Vol. 14, No. 12 (11/13/03), aff’d 16 A.D.3d 208 

(N.Y. App. Div., 1 st Dept. 2005), order enforcing prior judgment, Nos. 

5114, 5115 (N.Y. Sup. Jan. 25, 2006), reprinted in Mealey’s Litigation 


• Court compels assignee of insolvent reinsurer’s estate to arbitrate. 

B.D. Cooke & Partners Limited v. Certain Underwriters at Lloyd’s London, 

606 F.Supp. 2d 420 (S.D.N.Y. March 31, 2009). Court granted insurer’s 

motion to compel arbitration against the assignee of an insolvent 

reinsurer’s estate finding a material distinction between a liquidator and 

an assignee. Motion for stay denied at 2009 U.S. Dist. LEXIS 108436 

(S.D.N.Y Nov. 19, 2009), Motion for reconsideration denied at 2010 U.S. 

Dist. LEXIS 21710 (S.D.N.Y March 9, 2010). Court concluded that while a 

liquidator, under New York law, could not be compelled to arbitrate, the 

liquidator’s assignee did not enjoy the same right of rejection. 

• Receiver not required to provide notice of proof of claim deadline to 

policyholders of expired policies. 

In Re Liquidation of American Mut. Liability, 802 N.E.2d 555 (Mass. 2004). 

• Guaranty association responsible for claims where assumption reinsurance 

agreement was a novation so that the reinsurer became a direct insurer. 

Bowles v. BCJ Trucking Services Inc., 615 S.E.2d 724 (N.C. App. 2005). 

• Compromise Agreements Between Liquidator and Creditors Permissible. 

In re The Liquidation of the Home Insurance Company, No. 03-E-0106, 

N.H. Sup., reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 16, 

No. 11 (10/06/05). 

• Reciprocal reinsurance arrangements may allow for setoff. 

Republic Western Ins. Co. v. Reliance Ins. Co. in Liquidation, No. 12 REL 

2009 (Commw. Pa. June 29, 2011). Court overrules liquidator’s 

preliminary objection to petition for relief and states that setoff may be 

permissible based on reciprocal reinsurance arrangements entered into 


etween two parties who served as both cedent and reinsurer for one 

another under various reinsurance contracts. 

• The effect of failing to submit a claim in reinsurer’s rehabilitation and liquidation 

action. 

Propak Logistics, Inc. v. Foundation Ins. Co., 2007 WL 2302466 (W.D. Ark. 

2007). Plaintiff’s failure to submit a claim in the reinsurer’s rehabilitation 

and liquidation action resulted in the plaintiff being barred from 

obtaining relief from the reinsurer. 

V. Insolvency of Ceding Company and Set Offs 

Ceding company insolvency, and a reinsurer’s attempts to offset loss payments by 

premium owed, continue to generate arbitration and litigation. 

• Reinsurer allowed to offset. 

Imagine Ins. Co. v. Florida Dept. of Fin. Serv., No. 1D07-6027, 2008 Fla. 

App. LEXIS 18834 (Dec. 16, 2008). Reinsurer properly offset the 

remaining premium installments from the loss payment made to 

insurance company. Reh’g denied, 2009 Fla. App. LEXIS 21244 (Jan. 26, 

2009), rev denied 2009 Fla. LEXIS 1000 (June 16, 2009). 

Angoff v. Marion A. Allen, Inc., 2000 Mo. App. LEXIS 832 (2000), rev’d on 

other grounds, 39 S.W.3d 483 (Mo. 2001), reh’g denied, (March 20, 

2001). 

State of Florida, Dept. of Ins. v. Nat’l Reinsurance Corp., et al., 755 So.2d 

677, 1999 WL 436830 (Fla.Ct.App. 1999). 

Commissioner of Ins. v. Munich Am. Reinsurance Co., 429 Mass. 140, 706 

N.E.2d 694 (1999). 

Transit Cas. Co. v. Selective Ins. Co., 137 F.3d 540 (8th Cir. 1998), reh’g 

denied, 1998 U.S. App. LEXIS 8218 (8th Cir. 1998). Set offs allowed as to 

mutual obligations. 

Stephens, Commissioner of Ins. v. Federal Ins. Co., 1995 WL 702385 

(S.D.N.Y. 1995), aff’d, Rich, Commissioner of Ins. v. Federal Ins. Co., 113 

F.3d 1230 (2d Cir. 1997). 

Chesapeake Ins. Co. v. Curiale (In re Realex Group, N.V.), 210 A.D.2d 91, 

620 N.Y.S.2d 37 (N.Y. App. Div. 1994). 

Stamp v. Ins. Co. of North America, 908 F.2d 1375 (7th Cir. 1990). 


Selcke v. New England Ins. Co., 995 F.2d 688 (7th Cir. 1993). 

In re Liquidation of Midland Ins. Co., 79 N.Y.2d 253, 590 N.E.2d 1186 

(Ct.App. 1992). 

Prudential Reinsurance Co. v. Superior Court, 3 Cal.4th 1118, 14 

Cal.Rptr.2d 749 (1992). 

Employers Ins. of Wausau v. Nat’l Fire Ins. Co., 933 F.2d 1481 (9th Cir. 

1991). 

• Reinsurer not allowed to offset. 

In re Liquidation of the Home Ins. Co., 158 N.H. 677 (N.H. 2009); 972 

A.2d 1019. Reinsurer not permitted to offset debt against reinsurance 

claims asserted by liquidator of insolvent insurer. 

Garamendi v. California Compensation Ins. Co., No. B177760, Cal.App., 

2nd Dist., reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 

16, No. 18 (01/19/06). 

In Re: Liquidation of American Mut. Liability:, 434 Mass. 272, 747 

N.E.2d 1215 (Mass. 2001). 

Albany Ins. Co., et al. v. Stephens, et al., 926 S.W.2d 460 (Ky.Ct.App. 

1995), rev. denied (Aug. 21, 1996). 

Mission Ins. Co. v. Imperial Cas. & Indem. Co., 41 Cal.App.4th 828, 48 

Cal.Rptr.2d 209 (1995). 

Curiale v. Universal Reinsurance Corp., No. 40924/86 (N.Y.Sup.Ct.), 

reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 4, No. 11 

(10/13/93). 

Bluewater Ins. Ltd., et al. v. Balzano, 823 P.2d 1365 (Colo. 1992), 

modified, 1992 Colo. LEXIS 157 (Colo. Feb. 24, 1992). Right to offset 

excluded in reinsurance contract. 

In re: American Mut. Reinsurance Co., 238 Ill.App.3d 1, 606 N.E.2d 32 

(1992). 

Allendale Mut. Ins. Co., et al. v. Melahn, 773 F.Supp. 1283 (W.D.Mo. 

1991). 

Albany Ins. Co. v. Stephens, 926 S.W.2d 460 (Ky.Ct.App. 1995). 


• Reinsurer not allowed to rescind policy with insolvent cedent where reinsurer 

never dealt with cedent but dealt with pool to whom it “blindly delegated” 

underwriting. 

In the Matter of the Rehabilitation of American Mut. Reinsurance Co., 

238 Ill.App.3d 1, 606 N.E.2d 32 (1992). 

Garamendi v. Abeille-Paix Reassurances, No. 683233, Slip Op. (Sup.Ct. of 

Cal., County of L.A. 1991). 

• Contingent claims of insolvent insurer allowed in liquidation as well as 

corresponding charges to reinsurers. 

In re: Liquidation of Integrity Ins. Co., 691 A.2d 898, 299 N.J. Super. 677 

(1996), aff’d. in part and rev’d in part, 165 N.J. 75, 754 A.2d 1177 (2000). 

Angoff v. Holland-America Ins. Co. Trust, 937 S.W.2d 213 (Mo.Ct.App. 

1996). Missouri statute. 

• Contingent claims of insolvent insurer not allowed in liquidation and 

corresponding charges to reinsurer rejected. 

In re: Liquidation of Am. Mut. Liab. Ins. Co., 434 Mass. 272, 747 N.E. 2d 

1215 (2001). 

Quackenbush v. Mission Ins. Co., 62 Cal.App.4th 797, 73 Cal.Rptr.2d 95 (2d 

Dist. 1998). 

• Failure to disclose insolvency voids reinsurance contracts. 

Michigan Nat’l Bank v. American Centennial Ins. Co. (In re: Liquidation of 

Union Indem. Ins. Co.), 89 N.Y.2d 94, 674 N.E.2d 313, 651 N.Y.S.2d 383 

(1996). 

• Liquidators entitled to recover premiums on rescinded reinsurance contract. 

Curiale v. AIG Multi-Line Syndicate, 225 A.D.2d 409, 640 N.Y.S.2d 18 (N.Y. 

App. Div. 1996). 

• Liquidator’s claim for reinsurance not barred by the statute of limitations. 

Ario, Insurance Commissioner of the Commonwealth of Pennsylvania, in 

his official capacity as Liquidator for Reliance v. The Underwriting 

Members of Syndicates 33, 205 and 506, 996 A.2d 588 (Pa. Commw. Ct., 

June 4, 2010). Pennsylvania’s four-year limitation period, 42 Pa. C.S. § 

5525 (a)(8), did not apply to bar the Liquidator’s claim. 


• Insolvency of reinsured does not relieve reinsured of its obligation to pay 

reinsurance premium. 

In the matter of: Acceptance Ins. Cos. Inc., 383 B.R. 128 (8th Cir. BAP 

2008) (applying Iowa law). Insolvent debtor was not relieved of 

obligation to make $9 million reinsurance premium payment, aff’d at 567 

F.3d 369 (8th Cir. May 18, 2009). Reinsurer entitled to $15 million in 

premium deposits from insolvent reinsured. Furthermore, the Eighth 

Circuit confirmed that the fundamental purpose of the reinsurance 

contract had not been “frustrated” by the reinsured being placed into 

liquidation and ordered to stop writing insurance prior to the expiration 

of the reinsurance contract. Motion for entry of judgment granted, 2011 

Bankr. LEXIS 211 (Bankr. D. Neb. Jan. 19, 2011). Prejudgment awarded on 

each of the three premium payments from each payment’s due date. 

Post-judgment interest on award also granted. 

• Liquidator not bound to arbitrate reinsurance dispute. 

Mary Jo Hudson, Ohio Superintendent of Insurance, et al. v. John 

Hancock Financial Services, Inc., 2007 WL 4532704 (Ohio App. 10th Dist. 

2007). 

• Enforcement of arbitration provision against receiver allowed. 

Matter of the Rehab. Of Manhattan Re-Ins. Co., 2011 Del. Ch. LEXIS 146 

(Del. Ch. October 4, 2011). Appeal denied sub nom. Steward v. Am. 

Motorists Ins. Co., 44 A.3d 923 (Del. 2012). 

• Liquidator has broad discretion to administer an insolvent insurer’s estate, and 

while reinsurer maintains certain protections, reinsurer may not interfere with 

the administration of the estate. 

Matter of Liquidation of Midland Ins. Co. v. Wrynn, 929 N.Y.S.2d 116 (N.Y. 

App. Div. 2011). Overruled in part by Matter of Liquidation of Midland 

Ins. Co., 16 N.Y.3d 536 (N.Y. 2011). 

• Reinsurer’s petition to intervene in rehabilitation of insurer denied. 

Koken v. Legion Ins. Co., No. 183 Md. 2002 (Pa. Cmwlth. 2003), reprinted 

in Mealey’s Litigation Report: Reinsurance, Vol. 13, No. 7 (8/8/02), aff’d, 


(8/07/03). Reinsurer’s challenge of propriety of insurer’s rehabilitation 

order was speculative until arbitration between the parties was resolved. 


• Reinsurer’s motion to stay lawsuit pending resolution of its rehabilitation 

proceeding denied. 

Kimberly Lentz, in her capacity as interim trustee of the bankruptcy 

Estate of Gary E. Hale v. Claire W. Trinchard, et al., 2010 U.S.Dist. LEXIS 

82299 (E.D. La. Aug. 2, 2010). District Court refrains from abstaining, 

pursuant to Buford v. Sun Oil Co., 319 U.S. 315, 63 S. Ct. 1098, 87 L.Ed. 

1424 (1943), insofar as resolution of the case would not “substantially 

interfere” in the administration of reinsurer’s assets in the state court 

rehabilitation proceeding. 

• A state security fund is authorized to impose an assessment on the reinsurer of a 

town mutual insurer in wake of the insurer’s insolvency. 

American Eagle Insurance Co. v. Wisconsin Insurance Security Fund, 704 

N.W.2d 44 (Wisc.App. 2005). 

• Reinsurer’s default judgment cannot be enforced against insolvent insurer’s 

parent company. 

Employers Reinsurance Corp. v. Guaranteed Financial Corp., et al., 2006 

U.S. Dist. LEXIS 69428 (D. Ariz. 2006). Reinsurer’s default judgment 

cannot be enforced against insolvent insurer’s parent company when 

insurer’s provisional liquidator, not the parent company, had control over 

the relevant litigation and the ability to defend against judgment. 

• Incurred-but-not-reported claims against liquidated estate of insolvent insurer 

are not “cognizable” under New Jersey’s Insurer Liquidation Act, and thus cannot 

be collected from reinsurers. 

In re Liquidation of Integrity Ins. Co., 193 N.J. 86, 935 A.2d 1184 (N.J. 

2007) 

VI. 

Cut Through 

If a cedent becomes insolvent, the underlying claimant or plaintiff generally cannot 

maintain an action directly against the reinsurer. Nevertheless, a cut through endorsement on 

the reinsurance contract may allow such a direct action. 

• Original insured has direct access to reinsurer only if reinsurance contract 

specifically creates such a right or if reinsurer voluntarily enters into a direct 

contract with the reinsured. 

Navistar, Inc v. Affiliate FM Insurance Company, et al., No. 2009 CH 

20384, Cook Co. Cir., County Dept., Chanc. Div. (Feb. 29, 2012). Where 

an underlying insured has not been granted third-party beneficiary 


ights in a reinsurance contract and the reinsurance agreement does not 

contain a cut-through provision, no direct action is allowable. 

Callon Petroleum Co. v. Nat’l Indem. Co., et al., 2012 U.S. App. LEXIS 

13538 (2d Cir. July 3, 2012)(unpublished opinion). 

Canal Ins. Co. v. Montello, Inc., 826 F. Supp. 1264 (N.D. Okla. 2011). 

Policy holder cannot maintain a direct cause of action against the 

reinsurer of its direct insurer absent an express, or implied, cut-through 

provision present within the insurer-reinsurer reinsurance contract. 

Callon Petroleum Company v. National Indemnity Company, 2010 U.S. 

Dist. LEXIS 136056 (E.D.N.Y. Dec. 23, 2010). Relying on Jurupa Valley 

Spectrum LLC v. National Indemnity Company, 55 F.3d 87 (2d Cir. 2009), 

the district court concluded that the reinsurance agreement’s “no-thirdparty-rights” 

language prevented third-parties from having cut through 

rights. Motion to reconsider denied at 2011 U.S. Dist. LEXIS 119355 

(E.D.N.Y. Oct. 11, 2011), aff’d, 472 Fed. Appx. 57 (2d Cir. 2012). 

LaSalle Parish School Board v. Allianz Global Risks U.S. Ins. Co., No. 07- 

0399, 2008 WL 1859847 (W.D. La. 2008). Reinsurance agreement did not 

indicate the reinsurer would agree “to assume and carry out directly 

with” the insured policy obligations of the insurer, nor was the insured a 

third party beneficiary of the contract. Thus, the insured could not “cut 

through” and directly pursue reinsurer. Nevertheless, there were factual 

issues as to whether the reinsurer could be liable based on detrimental 

reliance or negligent misrepresentation. 

Jurupa Valley Spectrum v. National Indemnity Co., et al., No. 06-4023; 

2007 U.S. Dist. LEXIS 46876 (S.D.N.Y. June 29, 2007), aff’d by 555 F.3d 87 

(2d Cir. NY 2009). Beneficiary under surety bond could not seek direct 

relief from reinsurer because the reinsurance agreement at issue did not 

contain cut-through provision and expressly prohibited non-parties from 

obtaining rights under the agreement. 

Aftab v. New Jersey Property-Liability Ins. Guaranty Ass’n, 898 A.2d 1041 

(N.J.Super. 2006). 

Koken v. Reliance Ins. Co., 846 A.2d 167 (Pa. Cmwlth. 2004), vacated, No. 

60 MAP 2004 (Pa. Nov. 23, 2005), reprinted in Mealey’s Litigation Report: 

Reinsurance, Vol. 16, No. 15 (12/01/05), concurring opinion issued, (Pa. 

Sup. Feb. 8, 2006), reprinted in Mealey’s Litigation Report: Reinsurance, 

Vol. 16, No. 21 (03/02/06). 


Durgin v. Cresent Towing & Salvage, Inc., 2002 U.S. Dist. LEXIS 9650 (E.D. 

La. May 20, 2002). 

• Underlying claimant has no direct action against reinsurer where contract is 

clearly for reinsurance only. 

Banco Ficohsa v. Aseguradora Hondurena, S.A., 937 So.2d 161 (Fla.App. 

2006), reh’g denied, September 11, 2006. 

Carlson Holdings, Inc. v. NAFCO Ins. Co., Ltd., No. 00-2080 (D. Minn. Jan. 

8, 2001) (unpublished opinion). 

Gannon Trucking v. Aon Corp., No. BC-199481 (Cal. Super. Ct., L.A. 

County), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 10, 

No. 23 (4/13/00). 

Donaldson v. United Community Ins. Co., 741 So.2d 676 (La.Ct.App. 

1999), writ of error denied, 740 So.2d 1285 (La. 1999). 

Litho Color Inc. v. Pacific Employers Ins. Co., 98 Wa. App. 286 (1999). 

USX Corp. v. Adriatic Ins. Co., 64 F. Supp. 2d 469 (W.D.Pa. 1999). 

• General rule that an insured has no direct action against a reinsurer does not 

apply when a reinsurer has absolute control. 

Aftab v. New Jersey Property-Liability Ins. Guaranty Ass’n, 898 A.2d 1041 

(N.J.Super. 2006). 

Koken v. Legion Ins. Co., No. 183 M.D. 2002, (Pa. Cmwlth. 2003), 


(07/03/03); aff’d, reprinted in Mealey’s Litigation Report: Reinsurance, 

Vol. 14, No. 7 (08/07/03). See also, Mealey’s Litigation Report: 


World Omni Financial Corp. v. ACE Capital Re, Inc., 2002 U.S. Dist. LEXIS 

16870 (S.D.N.Y. Sept. 6, 2002). 

Unisys Corp. v. Ins. Co. of North America, No. L-1434-94, (N.J.Super., 

Middlesex Co.), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 

10, No. 4 (6/24/99). 

Central Maine Power Co. v. Ernest A. Moore, No. CV-93-489, (Maine 

Super., Kennebec Co.), reprinted in Mealey’s Litigation Report: 



Employers Mut. Cas. Co. v. Owens Ins. Ltd., Nos. MRS-C-51-96, 

(N.J.Super., Morris Co.), reprinted in Mealey’s Litigation Report: 


• Insured entitled to direct access to reinsurance proceeds where reinsurance was 

a pure fronting arrangement, but not where arrangement was more like 

traditional reinsurance. 

Ario v. Reliance Ins. Co., 981 A.2d 950 (Pa. Cmwlth. Sept. 4, 2009). The 

totality of circumstances warranted treating the insured as a third-party 

beneficiary of the reinsurance agreements; thus permitting the insured 

direct access to reinsurance. 

Ario v. Swiss Reinsurance America Corp., 940 A.2d 552 (Pa. Cmwlth. 12- 

28-2007) 

• If reinsurance policy contains a “cut-through,” then there is a question of fact as 

to whether the identity of the reinsured, or fronting company, is material and 

whether mistake in reinsured’s identity relieves reinsurer of its obligations under 

policy. 

Trans-Resources, Inc. v. Nausch, Hogan and Murray, 298 A.D.2d 27, 746 

N.Y.S.2d 701 (N.Y. App. Div. 2002). 

• A “cut through” clause in a reinsurance treaty must be explicit, not implied. 

Kadouh d/b/a K&K v. Liberian American Ins. Corp. and St. Paul 

Reinsurance Management Corp., The General Ins. Co. of Trieste and 

Venice, No. 12405/91, (Sup.Ct. of N.Y. 1991). 

• “Cut through” only valid where beneficiary of “cut through” is specified and 

named. 

In re Bennett Funding Group, Inc. v. Ades Investor Group, 2003 U.S. App. 

LEXIS 4611 (S.D.N.Y. 2003). Even if reinsurance contract contained a “cut 

through” provision, investors of a bankrupt insured company were not 

insured parties under the contract, and New York courts have not 

extended reinsurance contractual rights beyond original insured. 

Eaken Comm. Indiana v. Allied Fidelity Ins. Co., No. C86-0469, Ind. County 

Ct., Marion County (1987). See also, Mitchell v. State, 223 So.2d 792 (Fla. 

Ct. App. 1969). 


• Equitable subrogee of the cedent may sue reinsurers directly. 

The Royal Administration Inc. v. Hannover Life Reassur. Co. of America, 

848 So.2d 1244 (Fla.App. 2003). 

• Policyholder can sue reinsurer as alleged undisclosed principal to policies issued 

by now insolvent insurer. 

Law Offices of David J. Stern P.A., et al. v. SCOR Reinsurance Corp, et al., 

354 F.Supp.2d 1338 (S.D. Fla. 2005). 

• Cut through provision in insurance policy entitles reinsurer to revise claim 

determinations of insolvent cedent and seek overpayments. 

Lynn Olsen, d.b.a., Olsen Agriprises v. United States of America, et al., 

Nos. 08-5012 and 08-5013, 2009 U.S. Dist. LEXIS 93614 (E.D. Wash. Sept. 

30, 2009). 

VII. 

Late Notice 

A cedent may lose its reinsurance benefits if it does not provide timely notice under the 

contract. Whether a cedent’s notice is timely frequently depends upon the determination of 

whether the notice provision is a condition precedent and prejudice does not have to be shown 

or is a covenant in the contract and prejudice must be shown. 

• Must reinsurer show prejudice? No; notice provision is a condition precedent. 

AIU Ins. Co. v. TIG Ins. Co., No. 07 Civ. 7052 (S.D.N.Y. March 25, 2013). 

In applying Illinois law, the Southern District of New York, found 

cedent’s three-year delay in providing notice to its reinsurer 

“unreasonable,” and thus in breach of contract’s “prompt” notice 

provision. The court assumed that the reinsurer had suffered no 

prejudice as a result of the delay, but under Illinois law, a notice 

provision is a condition precedent to recovery. 


(N.D. Ill. Sept. 19, 2012). Under Connecticut law, as applied by the 

Northern District of Illinois, a cedent’s failure to provide prompt notice 

may entitle the reinsurer to relief without demonstrating prejudice, if 

the cedent acted in bad faith. However, as the court held, a cedent’s 

inadvertent failure to include certain claims in its routine report to the 

reinsurer does not amount to “gross negligence” for purposes of 

establishing bad faith. 

Pacific Employers Ins. Co. v. Global Reinsurance Corp. of America, 693 

F.3d 417 (3d Cir. 2012)(applying New York law). Where contract made 


notice a condition precedent, the court found that no prejudice was 

required and held in favor of the reinsurer based upon the reinsured’s 

failure to comply with the “prompt” notice requirement in the 

certificate. 

Allstate Insurance Co. v. Employers Reinsurance Corp., No. 01C1093 

(N.D.Ill. 2005), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 

15, No. 24 (04/28/05). 

Constitution Reinsurance Corp. v. Stonewall Ins. Co., 980 F. Supp. 124 

(S.D.N.Y. 1997), aff’d, 182 F.3d 899 (2d Cir. 1999). See also, American 

Home Assurance Co. v. International Ins. Co., 90 N.Y.2d 433, 684 N.E.2d 

14, 661 N.Y.S.2d 504 (1997). 

Cas. Ins. Co. v. Constitution Reinsurance Corp., No. 91 L 14732, (Ill.Cir.Ct.); 


(1/31/96). 

The Travelers Indemnity Co. v. Scor Reinsurance Co., 62 F.3d 74 (2d Cir. 

1995). 

Travelers Ins. Co. v. Buffalo Reinsurance Co., 735 F. Supp. 492 (S.D.N.Y. 

1990), vacated on other grounds, 739 F.Supp. 209 (S.D.N.Y. 1990). 

Liberty Mut. Ins. Co. v. Gibbs, 773 F.2d 15 (1st Cir. 1985). 

Fortress Reinsurance v. Jefferson Ins. Co., 465 F.Supp. 333 (E.D.N.C. 

1978), aff’d, 628 F.2d 860 (4th Cir. 1980). 

Highlands Ins. Co. v. Employers’ Surplus Lines Ins. Co., 497 F.Supp. 169 

(E.D.La. 1980). 

Keehn v. Excess Ins. Co., 129 F.2d 503 (7th Cir. 1942). 

• Must reinsurer show prejudice? No, if record shows gross negligence. 

Certain Underwriters at Lloyd’s of London, et al. v. The Home Ins. Co., 

146 N.H. 740, 783 A.2d 238 (N.H. 2001). 

• Must reinsurer show prejudice? Yes; notice provision is a covenant. 

Munich Reinsurance America, Inc. v. American Nat’l Ins. Co., 2012 U.S. 

Dist. LEXIS 140334 (D. N.J. September 28, 2012). Where contract does 

not make notice a condition precedent, reinsurer must show prejudice 

to avoid claims. 


Ario v. Underwriting Members of Lloyd’s of London Syndicates 33, 205 

and 506, No. 553 M.D. 2008, 996 A.2d 588 (Pa. Commw. Ct. 2010). The 

“notice-prejudice” rule applies in both Pennsylvania and New York. 

However, the court denied the reinsurer’s motion for summary judgment 

based on late notice finding that “the question of prejudice is one of fact 

that cannot be determined on the record as it exists.” 

Lexington Ins. Co. v. United Health Group Incorporated, 2011 U.S. Dist. 

LEXIS 14929 (D. Mass. Feb. 15, 2011). Reinsurer did not receive proper 

notice because it was not informed until shortly before the cedent settled 

the underlying matter. Prejudice to the reinsurer stemmed from the fact 

that it was denied the ability to associate in the claims reaching its 

threshold. 


(S.D.N.Y. 2009); U.S. Dist. LEXIS 37460 (March 23, 2009). Holding that the 

arbitration panel had not manifestly disregarded the law insofar as 

nothing in the record suggested that the failure to give notice was 

material to the treaties or prejudicial to the retrocessionaire. 

NewCap Insurance Company v. Employers Reinsurance Corp., 295 F. 

Supp.2d 1229 (D. Kansas 2003). District court predicted that Kansas 

Supreme Court would apply notice-prejudice rule in reinsurance context. 

British Ins. Co. of Cayman v. Safety Nat’l Cas. Corp., 335 F.3d 205 (3rd Cir. 

2003). Prejudice is a condition precedent to forfeiting reinsurance 

benefits based upon late notice. 

Zenith Ins. Co. v. Employers Ins. of Wausau, 141 F.3d 300 (7th Cir. 1998). 

Nat’l American Ins. Co. v. Certain Underwriters at Lloyd’s, 93 F.3d 529 

(9th Cir. 1996). 

Ins. Co. of Ireland Ltd. v. Mead Reinsurance Corp., et al., 1994 WL 605987 

(S.D.N.Y. 1994). 

Unigard Security Ins. Co., Inc. v. North River Ins. Co., 762 F.Supp. 566 

(S.D.N.Y. 1991), aff’d and rev’d, 4 F.3d 1049 (2d Cir. 1993). (See under II 

above). 

Travelers Ins. Co. v. Central Nat’l Ins. Co., 733 F. Supp. 522 (D.Conn. 

1990). 

Insurance Co. of State of Pennsylvania v. Associated Int’l Ins. Co., 922 F.2d 

516 (9th Cir. 1991). 


Christiania General Ins. Corp. v. Great American Ins. Co., 745 F. Supp. 150 

(S.D.N.Y. 1990), aff’d in part, rev’d in part, remanded, 979 F.2d 268 (2d 

Cir. 1992). Remanded for trial on whether notice was late and, if so, 

whether the reinsurer suffered prejudice. 

General Ins. Co. of Trieste and Venice v. Nutmeg Ins. Co., 1987 N.Y. Misc. 

LEXIS 2840 (Sup.Ct.N.Y. 1987). 

Security Mut. Cas. Co. v. Century Cas. Co., 531 F.2d 974 (10th Cir. 1976), 

cert. denied, 429 U.S. 860 (1976). 

Stuyvsant Ins. Co. v. United Public Ins. Co., 139 Ind. App. 533, 221 N.E.2d 

358 (1966). 

• Must reinsurer show prejudice? Yes, but must also show economic injury to 

prevail. 

Unigard Security Ins. Co. v. North River Ins. Co., 4 F.3d 1049 (2nd 

Cir. 1993). 

• Inability of reinsurer to intervene or associate in the underlying lawsuit in 

order to limit the costs of defense does not establish prejudice by itself under a 

late notice analysis. 


(N.D. Ill. Sept. 19, 2012). 

• Can be waived by failure to object to timing of notice and failing to respond to 

insured’s communications. 

Nat’l American Ins. Co. of CA v. Certain Underwriters at Lloyd’s London, 

93 F.3d 529 (9th Cir. 1996). 

• Cedent cannot avoid notice obligation because it did not read underlying 

complaint. 

Philadelphia Indemnity Insurance Co. v. Federal Insurance Co., 143 

Fed.Appx. 419 (3d Cir. 2005). 

• Notice requirement in treaty based upon judgment of the reinsured does not 

require that cedent report all claims immediately upon occurrence. 

Allstate Insurance Co. v. Employers Reinsurance Corp., No. 01C1093 (N.D. 

Ill. 2005), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 15, 

No. 23 (04/07/05). Cedent’s reporting of claims more than 20 years after 

accidents was reasonable for claims that had not exceeded the retention, 


ut was a violation of the notice provision for claims that had already 

exceeded the retention. 

• If prompt notice provision of reinsurance contract is ambiguous, parties may 

submit extrinsic evidence to aid construction. 

Folksamerica Reinsurance Co. v. Republic Ins. Co., No. 04-2716-CV, 2006 

WL 1476113 (2d Cir. May 26, 2006). 

• Plain reading of the reinsurance cover note did not reveal when the cedent was 

required to provide notice. 

Ario, Insurance Commissioner of the Commonwealth of Pennsylvania, in 

his official capacity as Liquidator for Reliance v. The Underwriting 

Members of Syndicates 33, 205 and 506, 996 A.2d 588 (Pa. Commw. Ct., 

June 4, 2010). Material issue of fact existed as to when notice to the 

reinsurer was required and whether prejudice exists. 

VIII. 

Allocation 

The issue of allocation, particularly in the toxic tort and environmental claim context, 

has resulted in numerous arbitrations and a significant body of case law. 

A. The Number Of Occurrences Issue 

Aioi Nissay Dowa Ins. Co. Ltd. v. Prosight Specialty Mgmt. Co., Inc., et 

al., 2012 U.S. Dist. LEXIS 118233 (S.D.N.Y. August 21, 2012). Court 

confirmed arbitration panel award providing that the World Trade 

Center losses constituted “one event,” subject to a single retention and 

one limit under the relevant reinsurance contracts, because the losses 

“occurred within one 24 hour period and within a 10 mile radius…” 

Hartford Accident and Indemnity Co., et al. v. ACE American Reinsurance 

Co., et al., 284 Conn. 744, 936 A.2d 224 (2007). The language in the 

“arising out of products” portion of the common cause provision of the 

reinsurance treaties was ambiguous and thus whether the language 

would allow for an aggregation of the asbestos claims against the insured 

for purposes of a reinsurance recovery was to be determined by the trial 

court. 

Travelers Cas. & Sur. Co. v. ACE Am. Reinsurance Co., 201 Fed.Appx. 40 

(2nd Cir. 2006). Unless the reinsurance contract otherwise provides, the 

aggregate liability of a reinsurance certificate will be the same as the 

underlying policy where the reinsurance contract has a follow the form 

clause. 


Professional Consultants Ins. Co. v. Employers Reinsurance Corp., No. 

1:03-CV-216, 2006 WL 751244 (D. Vt. March 8, 2006). Judge denied 

motion for partial summary judgment ruling that the language of the 

reinsurance contract was ambiguous as to whether it provided a single 

limit for the life of the treaty or an annual aggregate limit. 

Travelers Insurance Co. v. ACE American Reinsurance Co., 392 F.Supp.2d 

659 (S.D.N.Y. 2005). Three year facultative reinsurance certificate 

covering losses on an “each occ.-agg.” basis must provide coverage for 

three annual aggregate limits where cedent provided such coverage and 

the reinsurance certificate contained a “follow the form” clause. 

Argonaut Ins. Co. v. Travelers Ins. Co., No. 124063/2000 (N.Y. Sup., New 

York Co.), 2005 N.Y. Misc. LEXIS 20, reprinted in Mealey’s Litigation 

Report: Reinsurance, Vol. 15, No. 18 (01/20/05). Court rejected cedent’s 

theory that environmental claims at 140 sites throughout the U.S. arose 

from “common origin” and thus constituted a single occurrence, but also 

denied reinsurers’ summary judgment motion for failure to prove that if 

settlement was allocated on a multiple-occurrence basis, cedent would 

be unable to satisfy per-occurrence, per-year retentions to be entitled to 

reimbursement. 





F.3d 129 (1st Cir. 2005). “Follow the fortunes” bound reinsurer to 

cedent’s annualization of occurrence limits in underlying settlement. 







Scott v. The Copenhagen Reinsur. Co. Ltd., 2003 EWCA Civ 688, Eng. App., 


(5/22/03). Loss of a British Airways 747 jet in the Gulf War cannot be 

aggregated into one excess of loss reinsurance claim with Iraq’s 

plundering of aircraft and spares belonging to the Kuwait Airways Corp. 

Travelers Cas. and Sur. Co. v. Certain Underwriters at Lloyd’s of London, 

et al., 96 N.Y.2d 583, 760 N.E.2d 319 (2001). Losses arising from long- 


term environmental pollution at numerous sites may not be aggregated 

as a single event; a “follow the settlements” clause does not alter the 

terms or override the language of reinsurance policies. 

Mann and Holt v. Lexington Ins. Co., Eng. App., reprinted in Mealey’s 

Litigation Report: Reinsurance, Vol. 11, No. 12 (10/26/00). Damage 

resulting from riots occurring in various locations at different times 

constitutes more than one occurrence for the purpose of retrocessional 

coverage. 

American Bankers Ins. Co. of Florida v. Northwestern Nat’l Ins. Co., 198 

F.3d 1332 (11th Cir. 1999). Retrocessionaire asserted that cedent paid 

insured for multiple claims under its aggregate policy, but treated all of 

the claims as a single occurrence for purposes of presenting them to the 

retrocedent; court found that whether billing was improper was 

irrelevant so long as retrocedent acted in good faith. 

International Surplus Lines Ins. Co. v. Certain Underwriters at Lloyd’s, 868 

F. Supp. 917 (S.D.Ohio 1994). 

B. The Allocation Of Losses Among Reinsurance Treaties 

United States Fid. & Guar. Co., et al. v. Am. Re-Ins. Co., et al., 2012 N.Y. 

App. Div. LEXIS 416 (N.Y. App. Div. Jan. 24, 2012). Reinsurers were 

required to accept the cedent’s $262 million asbestos reinsurance 

presentation under the follow the fortunes doctrine, including the 

reinsured’s allocation decisions. 

Travelers Cas. & Surety Co. v. Ins. Co. of North America, 609 F.3d 143; 

2010 U.S. App. LEXIS 11689 (3rd Cir. June 9, 2010). Follow the fortunes 

doctrine applies to post-settlement allocation unless the reinsurer can 

demonstrate that the insurer’s post settlement allocation was not in 

good faith, (i.e., motivated primarily by reinsurance considerations or no 

credible rationales for allocation). However, a cedent may not allocate 

amounts beyond the limits of the reinsurance contracts. “A reinsurer 

cannot be held liable for a kind of loss that is did not agree to cover.” 

United States Fidelity & Guaranty Co., et al. v. American Re-Insurance Co., 

et al., 2010 N.Y. Misc. LEXIS 4315 (N.Y.Sup. Aug. 20, 2010). A cedent is 

not required to settle an underlying matter in such a way so as to have a 

lesser impact on its reinsurers. Aff’d at 2012 N.Y. App. Div. LEXIS 416 (N.Y. 

App. Div. Jan. 24, 2012). 




2703157 (W.D. Okla. 2007). Even if “follow of settlements” was implied, 

it did not permit the reinsured to re-allocate the risk among policy years 

in an effort to maximize its reinsurance recovery. 





the cedent. 

Hartford Accident & Indemnity Co. v. Ace American Reinsurance Co., 

2003 WL 22245421 (Conn. Super. 2003). Court dismissed reinsured’s 

declaratory judgment action seeking propriety of allocation on single 

versus multi-year billing method because dispute was not ripe for 

adjudication. 

North River Ins. Co. v. ACE American Reinsurance Co., 2002 U.S. Dist. 

LEXIS 5536 (S.D.N.Y. 2002), aff’d in relevant part, 361 F.3d 134 (2nd Cir. 

2004). Under “follow the fortunes,” to allow reinsurers to second-guess 

good-faith methods of allocation would make settlement impossible and 

reinsurance problematic. 

Commercial Union Ins. Co. v. Seven Provinces Ins. Co., aff’d, 217 F.3d 33 

(1st Cir. 2000), cert. denied, 121 S.Ct. 1084 (2001). Doctrine of “follow 

the settlements” requires the reinsurer to follow the reinsured’s good 

faith and reasonable allocation of settlement dollars for environmental 

liability between different policies and sites. 

Hartford Accident & Indemnity Co. v. Columbia Cas. Co., 98 F.Supp.2d 251 

(D.Conn. 2000). Summary judgment denied based on issues of fact as to 

whether the cedent unreasonably settled and allocated an underlying 

environmental claim in order to maximize its reinsurance recovery. 

United States v. Brennan, 938 F.Supp. 1111 (E.D.N.Y. 1996), rev’d on 

other grounds, 183 F.3d 139 (2d Cir. 1999). 

North River Ins. Co. v. CIGNA Reinsurance Co., et al., 52 F.3d 1194 (3d Cir. 

1995). Coverage for defense costs under cedent’s excess policy was 

reasonably within the terms of the policy and cedent’s entry into the 

Wellington Agreement was in good faith and therefore, the reinsurer 

must “follow the fortunes” of the cedent’s allocation pursuant to the 

Agreement. 


1993). Reinsurer failed to show that it suffered prejudice from the late 


notice of the signing of the Wellington Agreement, and was therefore 

obligated to “follow the fortunes” of the cedent’s allocation pursuant to 

the Agreement. 

Hiscox v. Outhwaite, U.K. High Court, 1990 Folio No. 2491, [1991] 

2 Lloyd’s Rep. 524. 

IX. 

Arbitration 

Most reinsurance contracts, particularly treaties, provide for cedent/reinsurer disputes 

to be decided by a panel of three arbitrators. Arbitration offers confidentiality and resolution 

by those with insurance and/or reinsurance experience and expertise. Arbitration is less formal 

and generally takes less time than litigation. As can be seen from the following pages, however, 

arbitration is not without its own issues. 

A. Motion To Compel Or Stay Arbitration 

• Stay of arbitration denied. 

NW. Nat’l Ins. Co. v. INSCO, Ltd., 2011 U.S. Dist. LEXIS 139996 (S.D. N.Y. 

December 6, 2011). Refusing to stay arbitration pending the reinsurer’s 

appeal of an order disqualifying its counsel. 

Life Receivables Trust v. Goshawk Syndicates 102 at Lloyd’s, 888 N.Y.S.2d 

458 (1st Dept. 2009). Under American Arbitration Association rules, 

validity of an arbitration agreement to be decided by the arbitration 

panel. 

B.D. Cooke & Partners Ltd. v. Certain Underwriters at Lloyd’s London, 

606 F.Supp. 2d 420 (S.D.N.Y. March 31, 2009). After granting a motion to 

compel arbitration, a motion to stay arbitration pending resolution of 

motion for reconsideration denied as the “harm of unnecessary 

expenses” is insufficient to overcome plaintiff’s interest in advancing its 

case. Motion for reconsideration denied at 2010 U.S. Dist. LEXIS 21710 

(S.D.N.Y March 9, 2010). 

Preston v. Ferrer, 128 S.Ct. 978, 169 L.Ed. 2d 917 (2008). Where parties 

agree to arbitrate all disputes, the FAA supersedes state laws lodging 

primary jurisdiction. 

Dorinco Reinsurance Co. v. Ace Amer. Ins. Co., No. 08-1310 (6th Cir. April 

28, 2008), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 19, 

No. 3 (6/6/2008). Motion to stay arbitration proceedings pending appeal 

of a district court’s ruling permitting the reinsurers to appoint a single 

arbitrator to two arbitration panels was denied insofar as appellants 

could not show a likelihood of success on the merits. 


Century Indemnity Co. v. New England Reinsurance Corp., 2004 WL 

1813209 (E.D. Pa. 2004). Motion to stay four of five arbitrations arising 

out of the same series of reinsurance contracts pending conclusion of 

first arbitration denied. 

ReliaStar Life Ins. Co. v. American Healthcare Indemnity Co., 2004 U.S. 

Dist. LEXIS 2649 (D. Minn. 2004). 

Utica Mut. Ins. Co. v. American Mut. Reinsur. Co., 2003 U.S. Dist. LEXIS 

8025 (N.D. Ill. 2003). 

Gerling Global Reinsurance Co. v. ACE Property & Casualty Ins. Co., 42 

Fed.Appx. 522 (2nd Cir. 2002). Second Circuit affirmed denial of insurer’s 

motion to dismiss or stay, ruling that dispute does not fall within narrow 

arbitration clause. 

Louis Dreyfus Negoce S.A. v. Blystad Shipping & Trading, Inc., 252 F.3d 

218 (2nd Cir. 2001), cert. denied, 122 S.Ct. 546 (2001). 

Christian Mut. Life Ins. Co. v. Penn Mut. Life Ins. Co., et al., 163 F.Supp. 2d 

260 (S.D.N.Y. 2001). 

First Fidelity Bancorporation v. Nat’l Union Fire Ins. Co., 1990 WL 167642 

No. Civ. A. 90-1866 (E.D.Pa. 1990). 

Pacific Reinsurance Mgmt. Corp. v. Ohio Reinsurance Corp., 814 F.2d 

1324 (9th Cir. 1987). 

• Stay of arbitration granted. 

In re Ins. Co. of North Am. v. Pub. Serv. Mut. Ins. Co., No. 08-cv-7003, 

2008 U.S. Dist. LEXIS 101788 (S.D.N.Y. Dec. 10, 2008), vacated by 2009 

U.S. Dist. LEXIS 55271 (S.D.N.Y. June 29, 2009), reaff’d at 2009 U.S. Dist. 

LEXIS 66325 (S.D.N.Y. July 29, 2009). Prior order compelling new 

arbitration following resignation of arbitrator for health concerns vacated 

and parties ordered to continue arbitration with original panel following 

newly-discovered evidence concerning arbitrator’s health. Aff’d at 609 

F.3d 122 (2d Cir. June 23, 2010). Second Circuit found the district court's 

decision to reappoint arbitrator or require a replacement in the event he 

declined was reasonable, as it avoided the waste entailed in convening a 

new panel after the remaining arbitrators had already engaged in 

significant proceedings in the case. 

Security Insurance Company of Hartford v. TIG Insurance Co., No. 3:01 cv 

2198 [PCD], 2003 U.S. Dist. LEXIS 14777 (D. Conn., 2003), aff’d, 360 F.3d 

322 (2nd Cir. 2004). Despite an arbitration agreement, the choice of law 


clause in the reinsurance agreement requires application of California 

law, which allows stay pending outcome of pending court action. 

• Motion or petition to compel arbitration granted. 

Repwest Ins. Co. v. Praetorian Ins. Co., et al., 2012 U.S. Dist. LEXIS 

121897 (D. Ariz. August 28, 2012). Granting the reinsurer’s motion to 

compel arbitration holding that the dispute arose out of the 

interpretation of a reinsurance agreement, not the validity of a 

commutation agreement. 

Munich Reinsurance America, Inc. v. National Casualty Company, 2011 

U.S. Dist. LEXIS 44759 (S.D.N.Y. April 26, 2011). Motion to compel 

arbitration granted. Court found issue of how “act as one” provision 

applies to be issue for arbitration panel. 

ProNational Ins. Co v. AXA Liabilities Managers Inc., No. 08-cv-02022 

(N.D. Ala. January 28, 2010). Where a party is relying on the terms of a 

contract for its claims, the doctrine of equitable estoppel prohibits a 

signatory from avoiding arbitration against a non-signatory to a 

reinsurance agreement where the non-signatory seeks arbitration. 

Safety Nat’l Cas. Ass’n v. Certain Underwriters at Lloyd’s, London, 587 

F.3d 714 (5th Cir. 2009), Writ of certiorari denied, 131 S. Ct. 65 (2010) (en 

banc) (addressing Louisiana law) Arbitration provision in reinsurance 

contract deemed enforceable despite state statute prohibiting arbitration 

agreements in insurance contracts. McCarran-Ferguson Act does not 

reverse-preempt the Convention on the Recognition and Enforcement of 

Foreign Arbitral Awards. Granting motion to lift stay for the limited 

purpose of compelling the nomination and selection of qualified umpire 

candidates at 2011 U.S. Dist. LEXIS 91297 (M.D. La. Aug. 16, 2011). 

Century Indemnity Co. v. Certain Underwriters at Lloyd’s London, 584 

F.3d 513 (3d Cir. 2009). Third Circuit holds that retrocessionaire was 

required to arbitrate with retrocedent where the retrocession agreement 

incorporated arbitration clause in the underlying reinsurance contract. 

Sun Life Assurance Co. of Canada v. Liberty Mutual Ins. Co., No. 09-cv- 

02133, 2009 U.S. Dist. LEXIS 114694 (S.D. Cal. Dec. 9, 2009). Motion to 

compel third arbitration and stay pending litigation granted. Substantive 

determinations of the parties’ rights and liabilities are properly within the 

purview of the arbitrator. 

Trustmark Ins. Co. v. Clarendon Nat’l Ins. Co., No. 09 C 6169, 2010 U.S. 

Dist. LEXIS 8078 (N.D. Ill Feb 1, 2010). 


Northbrook Indem. Co. v. First Auto. Serv. Corp., N.M.¸ No. 3:07-cv-683- 

32JRK, 2008 U.S. Dist. LEXIS 61424 (M.D. Fla. Aug. 1, 2008). 

Doeff v. Transatlantic Reinsurance Co., 2007 WL 4373041 (E.D. Pa. 2007). 

Reinsurer’s motion to compel arbitration, as required under the 

reinsurance contract, was granted insofar as insured was determined to 

be a third-party beneficiary of the reinsurance contract. 

Newmont U.S.A. Ltd., formerly known as Newmont Mining Corp. and N.I. 

Limited v. Insurance Company of North America, 2006 U.S. Dist. LEXIS 

67905 (D. Colo. 2006). Previous settlement agreement between parties 

did not release reinsurer for claims that did not arise from or relate to the 

declaratory judgment action from which the settlement agreement 

arose. 

Vesta Fire Ins. Co. v. Employers Reinsurance Corp., No. 3:05-CV-2404-P, 

2006 WL 1506949 (N.D. Tex. May 31, 2006), mot. for reconsideration 

denied, No. 3:05-CV-2404-P (N.D. Tex. June 30, 2006), reprinted in 

Mealey’s Litigation Report: Reinsurance, Vol. 17, No. 7 (08/03/06). 

Medical Insurance Exchange of California v. Certain Underwriters at 

Lloyds, London, No. 05-2609, 2006 WL 463531 (N.D. Cal. Feb. 24, 2006). 

King County v. Swiss Reinsurance America Corp., and Transatlantic 

Reinsurance Co., No. C05-783, W.D. Wash (August 31, 2005), reprinted in 


Arbitration provisions in issued reinsurance policies are enforceable, 

irrespective of the fact that the binders contained no such provision. 

Harco National Insurance Co. v. Millenium Insurance Underwriting Ltd., 

2005 U.S. Dist. LEXIS 15960 (N.D. Ill. 2005). 

PNI, Inc. v. Leyton, 2004 WL 555249 (D. Or. 2004). 

Associated International Ins. Co. v. Montenegro Re Ltd., 2004 WL 

2526426 (Calif. App. 2 Dist. 2004). 

National American Ins. Co. v. Scor Reinsurance Co., 362 F.3d 1288 (10th 

Cir. 2004). 

Guarantee Trust Life Ins. Co. v. American United Life Insurance Co., No. 

03 C 4250 (N.D. Ill. 2003), 2003 U.S. Dist. LEXIS 22777. Under 

Pennsylvania law, the parties are bound by the two-word phrase 

“arbitration clause” on the reinsurance slip. 


Zurich American Ins. Co. v. Cebcor Service Corp., 2003 U.S. Dist. LEXIS 

10346 (N.D.Ill. 2003). The term “arbitration” in a reinsurance cover note 

establishes binding agreement to arbitrate. 

Utica Mut. Ins. Co. v. Gulf Ins. Co., 762 N.Y.S.2d 730 (N.Y.App.Div. 2003). 

Assurance Foreningen Skuld and Skuld Mut. Protection and Indemnity 

Ass’n (Bermuda) Ltd. v. Apollo Ship Chandlers, Inc., 847 So.2d 991 (Fla. 

App. 2003). 

Century Indemnity Co. v. Viacom International, Inc., 2003 U.S. Dist. LEXIS 

2452 (S.D.N.Y. 2003). 

Underwriters Reinsur. Co. v. ACE American Ins. Co., No. CV-02-08177 

(C.D. Cal. 2003), reprinted in Mealey’s Report: Reinsurance, Vol. 13, No. 

21 (03/06/03). Court held that a broad arbitration provision in a novation 

agreement applied to a dispute arising under a related reinsurance 

agreement. 

The North River Ins. Co. v. Transamerica Occidental Life Ins. Co., 2002 U.S. 

Dist. LEXIS 10637 (N.D. Tex. June 12, 2002). 

Ace Capital Re Overseas Ltd. v. Central United Life Ins. Co., 307 F.3d 24, 

2002 U.S. App. LEXIS 21715 (2d Cir. 2002). 

Bank of America, N.A., et. al. v. Diamond State Ins. Co., Ltd., 2002 U.S. 

Dist. LEXIS 23225 (S.D.N.Y. 2002). 

Southern Food Service Management, Inc. v. American Fidelity Assurance 

Company & Ins. Mass Marketing Systems, Inc., 2002 Ala. LEXIS 321 (Ala. 

2000) 

Gulf Guar. Life Ins. Co. v. Conn. Gen. Life Ins. Co., 304 F.3d 476 (5th Cir. 

2002). 

Sovereign General Ins. Services Inc. v. LeBoeuf Lamb Greene & MacRae, 

No. C 02-02972 CRB, (N.D.Cal.) reprinted in Mealey’s Report: 


Burlington Ins. Co. v. Trygg-Hansa Ins. Co., No. 00-1373, 2001 U.S. App. 

LEXIS 10625 (4th Cir. 2001). 

Hughes & Bond v. Public Service Mut. Ins. Co., 2001 Bankr. LEXIS 1803 

(Bankr. S.D.N.Y. 2001). 


Nat’l Union Fire Ins. Co. of Pittsburgh, et al. v. ABS Ins. Ltd., 2001 U.S. 


Clarendon Nat’l Ins. Co. v. Kings Reinsurance Co. Ltd., 241 F.3d 131 (2d 

Cir. 2001). 

Continental Ins. Co. v. Allianz Ins. Co., et al., 2002 U.S. App. LEXIS 25879. 

Arbitration should be compelled unless the parties’ agreement can only 

be interpreted as canceling the arbitration clause. 

Hartford Accident & Indemnity Co. v. Swiss Reinsurance America Corp., 

246 F.3d 219 (2d Cir. 2001). Manner in which insurer should allocate its 

reinsurance billings to its reinsurer was a proper issue for an arbitration 

panel to determine pursuant to the language contained in the treaty 

reinsurance contracts. 

Ace Ltd. v. Cigna Corp. and Cigna Holding, Inc., 2001 U.S. Dist. LEXIS 9240 

(S.D.N.Y. 2001). Dispute regarding taxes arising from acquisition of 

property and casualty business constitutes a tax matter subject to 

arbitration clause. 

Clarendon Nat’l Ins. Co. v. Lin W. Lan, et al., 152 F.Supp.2d 506 (S.D.N.Y. 

2001). Fact that parties have not agreed on location of arbitration does 

not prevent the court from ordering arbitration in its own district. 

Garten v. Kurth, et al., 265 F.3d 136 (S.D.N.Y. 2001). 

Sphere Drake Ins. Ltd. v. Clarendon Nat’l Ins. Co., 263 F.3d 26 (2d Cir. 

2001). 

Credit General Ins. Co. v. John Hancock Mut. Life. Ins. Co., 2000 U.S. Dist. 

LEXIS 9009 (N.D. Ohio 2000). 

Allianz Life. Ins. Co. v. American Phoenix Life and Reassurance Co., 2000 

U.S. Dist. LEXIS 7216 (D. Minn. 2000). Arbitration compelled solely on 

placement slip wording (that neither specified scope nor procedures for 

arbitration), relying on industry custom and practice. 

NRMA Ins. Ltd. v. Vesta Fire Ins. Corp., 2000 U.S. Dist. LEXIS 8435 (N.D. 

Ala. 2000). 

Nichols v. Vesta Fire Ins. Corp., 56 F.Supp.2d 778 (E.D.Ky. 1999). 

Liquidator of insolvent reinsurer ordered to arbitrate with 

retrocessionaire. 


Monumental Life Ins. Co. v. R.A.J. Holdings, Inc., 1999 WL 632891 (E.D.La. 

1999). Non-signatory corporate parent of signatory to arbitration 

agreement may be bound to arbitrate. 

Constitution Reinsurance Corp. v. Republic Western Ins. Co., 1999 U.S. 

Dist. LEXIS 2651 (S.D.N.Y. 1999). Arbitration compelled despite fact that 

dispute resolution organization designated in reinsurance agreement no 

longer in existence. 

Koken v. Cologne Reinsurance (Barbados) Ltd., 34 F.Supp.2d 240 (M.D.Pa. 

1999). Cedent’s liquidator ordered to arbitrate. 

Winward Agency, Inc. v. Cologne Life Reinsurance Corp., 1997 WL 164269 

(E.D.Pa. 1997). 

Certain Underwriters at Lloyd’s London v. Colonial Penn Ins. Co., 1997 WL 

316459 (S.D.N.Y. 1997). 

Quackenbush v. Allstate Ins. Co., 1517 U.S. 706, 116 S.Ct. 1712 (1996). 

In re Laitasalo, 196 B.R. 913 (Bankr. S.D.N.Y. 1996). 

The Hartford Steamboiler Inspection and Ins. Co. v. Industrial Risk 

Insurers, 1995 WL 645971 (Conn.Super.Ct. 1995). 

In the Matter of the Liquidation of Integrity Ins. Co., No. C-70-95, 

(N.J.Super.Ct.), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 

6, No. 8 (8/23/95). 

Cologne Reinsurance Co. of Am. v. Southern Underwriters Inc., 218 

A.D.2d 680, 630 N.Y.S.2d 548 (1995). 

Zurich Ins. Co. v. Ennia Gen. Ins. Co., 882 F.Supp. 1438 (S.D.N.Y. 1995). 

Fremont Indemnity Co. v. Assicurazioni Generali SPA, No. CV94-7908 

(C.D.Cal.), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 5, 

No. 22 (3/22/95). 

“Winterthur” Swiss Ins. Co., et al. v. First State Ins. Co., et al., No. 

3:94CV1476, (D.Conn.), reprinted in Mealey’s Report: Reinsurance, Vol. 

5, No. 21 (3/8/95). 

Stephens v. American International Ins. Co., 1994 WL 414374 (S.D.N.Y. 

Aug. 5, 1994). 


Argonaut Ins. Co. v. The Reinsurance Corp. of N.Y., 1994 WL 178293 

(N.D.Ill. 1994). 

Selcke v. New England Ins. Co., 995 F.2d 688 (7th Cir. 1993), motion to 

vacate denied, 2 F.3d 790 (1993). 

Progressive Cas. Ins. Co. v. C.A. Reaseguradora Nacional de Venezuela, 

991 F.2d 42 (2d Cir. 1993). 

Pan Atlantic Reinsurance Co., Ltd. v. Republic Ins. Co., 1992 WL 116424, 

(S.D.N.Y. 1992). 

• Motion or petition to compel arbitration granted although litigation pending. 

Kwelm v. Public Service Mut. Ins. Co., No. 97-8886-A (Bankr. S.D.N.Y. 

2001). 

St. Paul Fire & Marine Ins. Co. v. Barge, et al., 225 Ga.App. 392, 483 S.E.2d 

883 (1997), recon. denied (1997), cert. denied, 522 U.S. 997, 118 S.Ct. 

561 (1997), aff’d in part and rev’d in part, 245 Ga.App. 112, 535 S.E.2d 

837 (2000), cert. denied (Jan. 5, 2001). 

• Motion or petition to compel arbitration denied. 

Clearwater Ins. Co. v. Superior Court., No. B200692, 2008 Cal. App. LEXIS 

903 (2008). Unpublished. Non-signatory to reinsurance agreement could 

not compel reinsurer to arbitrate under reinsurance contracts containing 

arbitration provisions. 

Mary Jo Hudson, Ohio Superintendent of Insurance, et al. v. John 

Hancock Financial Services, Inc., 2007 Ohio 6997 (Ohio App. 10 th Dist., 

2007), discretionary appeal not allowed by 888 N.E.2d 1114 (Ohio 2008). 

Liquidator not bound by arbitration clauses. 

Invitrogen Corp. v. Employers Ins. Co. of Wausau, No. CV-06-0232-PHX- 

MHM (D. Az. Mar. 9, 2007). Parties’ settlement agreement language, and 

not reinsurance contract, controls dispute over current reinsurance 

obligations. 

IPC v. BP North America Petroleum, 2006 WL 119838 (S.D.N.Y. January 

17, 2006). Court declined to appoint a domestic arbitrator to hear a 

dispute because the underlying contract stated that the aggrieved party 

was to petition the English High Court to appoint an arbitrator. 


Amcomp Preferred Ins. Co. v. Koken, 916 So.2d 986 (Fla.App. 2005). 

Reinsurer’s liquidator not bound by arbitration clause in reinsurance 

agreement. 

American Special Risk Insurance Co. v. Factory Mutual Insurance Co., 

2005 WL 1620392 (Pa.Com.Pl. 2005). 

New Hampshire Ins. Co. v. Canali Reinsurance Co., Ltd., 2004 WL 769775 

(S.D.N.Y. 2004). 

Bank of America, N.A. v. Diamond State Ins. Co. Ltd., Nos. 01 Civ. 0645 

and 02 Civ. 2900, 2003 U.S. Dist. LEXIS 15075 (S.D.N.Y., 2003). The court 

ruled that under Section 4 of the FAA, “the party in default” who is 

entitled to a jury trial on the issue of the making of the contract is the 

party seeking to avoid arbitration. 

Hobbs v. IGF Ins. Co. et al., 2002 La.App. LEXIS 3219 (La.App. 2002). 

Louisiana’s statutory prohibition against mandatory arbitration clauses in 

insurance contracts applies to a federally reinsured crop insurance policy 

issued and managed in Louisiana when claims are based solely on state 

law. 

In re Integrity Ins. Co., No. C-07022-86, (N.J. Super. Bergen Co.), reprinted 

in Mealey’s Litigation Report: Reinsurance, Vol. 13, No. 16 (12/12/02). 

Northwestern National Ins. Co. v. Capitol Indemnity Corp., No. 600944/02 

N.Y. Sup. N.Y. Co., reprinted in Mealey’s Report: Reinsurance, Vol. 13, No. 

15 (12/2/02). An arbitration clause in a reinsurance pooling agreement 

between a pool member and the pool manager does not cover disputes 

between pool members. 

Gerling Global Reinsurance Corp. v. The Home Ins. Co., 2002 N.Y. App. 

Div. LEXIS 12519 (N.Y. 2002), leave to appeal denied, 2003 N.Y. LEXIS 419 

(N.Y.App. 2003). 

World Omni Financial Corp. v. ACE Capital Re, Inc., 2002 U.S. Dist. LEXIS 

21409 (S.D.N.Y. 2002), vacated and remanded, 2003 U.S. App. LEXIS 8441 

(2nd Cir. 2003). 

ACE Capital Re Overseas Ltd. v. Central United Life Ins. Co., 2001 U.S. Dist. 

LEXIS 18447 (S.D.N.Y. 2001), vacated, 307 F.3d 24, 2002 U.S. App. Lexis 

21715 (2nd Cir. 2002). 

CNA Reinsurance Co. Ltd. v. Trustmark Ins. Co., 2001 U.S. Dist. LEXIS 7523 

(N.D. Ill. 2001). 


Bank of AM., N.A. v. Diamond State Ins. Co., 2001 U.S. Dist. LEXIS 13751 

(S.D.N.Y. 2001), aff’d, 38 Fed. Appx. 687 (2nd Cir. 2002). 

Argonaut Ins. Co., et al. v. Travelers Ins. Co., 295 A.D. 2d 235 (N.Y. App. 

Div. 2002). 

Sphere Drake Ins. Ltd. v. All American Life Ins. Co., 256 F.3d 587 (7th Cir. 

2001), rev’d on other grounds, 307 F.3d 617 (7th Cir. 2002). A Court 

rather than an arbitration panel should decide whether or not a contract 

exists and whether or not arbitration of a dispute arising from that 

contract is warranted. 

Federated Rural Elec. Ins. Exch. v. Nationwide Mut. Ins. Co., 134 

F.Supp.2d 923 (S.D. Ohio 2001). 

Sandvik AB v. Advent Int’l Corp., 220 F.3d 99 (3rd Cir. 2000). Denial of 

motion to compel upheld where the court found that the contract 

containing the arbitration clause was void. 

Safety Nat’l Cas. Corp. v. Certain Underwriters at Lloyd’s of London, No. 

99-4276-CV-C-5, (W.D. Mo.), reprinted in Mealey’s Litigation Report: 


Jaynee LaVecchia v. Munich Reinsurance Co., No. 99-5611, (3rd Cir.), 


(11/11/99). 

Transit Cas. Co. v. Certain Underwriters at Lloyd’s of London, et al., 963 

S.W.2d 392 (Mo.Ct.App. 1998). 

Munich Am. Reinsurance Co. v. Crawford, 141 F.3d 585 (5th Cir. 1998), 

cert. denied, 525 U.S. 1016, 119 S.Ct. 539 (1998). Federal Arbitration Act 

preempted by state insolvency law under McCarran-Ferguson Act. 

Federated Rural Elec. Ins. Co. v. Nationwide Mut. Ins. Co., 874 F.Supp. 

1204 (D.Kan. 1995). 

DR Industries Co. v. Central Nat’l Ins. Co. of Omaha (In Rehabilitation), 

No. 507 (Neb. Dist. Ct.), reprinted in Mealey’s Litigation Report: 

Reinsurance, Vol. 5, No. 18 (1/25/95). Nebraska law makes arbitration 

clauses unenforceable. 

Menorah Ins. Co. v. INX Reinsurance Corp., 72 F.3d 218 (1st Cir. 1995). 

Chesapeake Ins. Co. Ltd. v. 10A Ltd., 1994 WL 854658 (N.Y.Sup.Ct. 1994). 


Frank B. Hall Co. v. Colorado School Districts Self-Insurance Pool, No. 92 

CV 225 (Colo. Dist. Ct.), reprinted in Mealey’s Litigation Report: 


American Home Assurance Co. v. Fremont Indemnity. (Consolidated with 

Belvedere Ins. Co. Ltd, GTE Reinsurance Co., Ltd., Arkwright Mut. Ins. Co., 

Nat’l Union Fire Ins. Co. of Pittsburgh), 1992 WL 135809 (S.D.N.Y. 1992), 

aff’d, 983 F.2d 1048 (2nd Cir. 1992). 

Mut. Reinsurance Bureau v. Great Plains Mut. Ins. Co., 969 F.2d 931 (10th 

Cir. 1992), cert. denied, 506 U.S. 1001, 113 S.Ct. 604 (1992), superseded 

by statute as stated in Friday v. Trinity Universal of Kansas, 262 Kan. 347 

(1997). Reinsurance is part of the “business of insurance” under the 

McCarran-Ferguson Act and, therefore, state arbitration statutes may 

now be relevant in reinsurance arbitration. 

• Motion to stay litigation pending arbitration denied. 

Continental Casualty Co., et al. v. Commercial Risk Re-Insurance Co., et 

al., No. 07-C-6912, 2009 U.S.Dist.LEXIS 32208 (N.D.Ill. April 16, 2009). 

Motion to stay litigation regarding a commutation agreement denied 

insofar as the dispute between the parties was not subject to an 

arbitration provision. The court also denied a motion to appoint an 

umpire, finding that such an appointment was premature in the absence 

of an ongoing arbitration. 

Global Reins. Corp.-U.S. Branch v. Equitas Ltd., 60018-2007, 2008 N.Y. 

Misc. LEXIS 6979 (N.Y. County, July 3, 2008). 

VCW, Inc., et al. v. Mut. Risk Management Ltd., et al. No. 99-CV-82169 

(Mo. Ct. App.), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 

12, No. 2 (5/24/01). 

Aceros Prefabricator S.A. – against – Trade Arbed, No. 00 Civ. 9387 

(LMM) (S.D. NY 2001), reprinted in Mealey’s Litigation Report: 


Weatherford, et al. v. Honorable Leamon Freeman, No. 82, 346, 

(Okla.Sup.Ct.), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 

4, No. 14 (11/23/93). 

Stephen Selcke v. New England Ins. Co., No. 92 C 5599 (N.D.Ill. 1992). 


• Litigation stayed pending arbitration. 

Fencourt Reinsurance Company Ltd. v. ITT Industries Inc., No. 06-cv- 

04786 (E.D. Pa. June 20, 2008), reprinted in Mealey’s Litigation Report: 

Reinsurance, Vol. 19, No. 5 (7/3/2008). Captive Reinsurer was deemed a 

“third-party beneficiary” of distribution agreement and thus was bound 

to arbitrate its claims against former parent. 

Int’l Ins. Agency Servs. v. Revios Reins. U.S., Inc. No. 04 C 1190, 2007 U.S. 

Dist. LEXIS 22229 (N.D. Ill. Mar. 27, 2007). Highlighting the five doctrines 

through which a non-signatory can be bound by arbitration agreements 

entered into by others, non-signatory estopped from avoiding arbitration 

provisions found in two reinsurance agreements because the claimant’s 

cause of action was based on those reinsurance agreements. 

Trustmark Insurance Company v. Transamerica Occidental Life Insurance 

Company, 484 F.Supp.2d 850 (N.D. Ill. May 1, 2007). Under Illinois law, 

“[p]arties to a broadly worded arbitration clause who fail to excluded a 

particular type of dispute are assumed to have intended to include such 

disputes within the ambit of their agreement.” 

American Southern Insurance Co. v. PXRE Reinsurance Co., No. 1:04-cv- 

3572-WSD, N.D. Ga. (June 13, 2005), reprinted in Mealey’s Litigation 

Report: Reinsurance, Vol. 16, No. 11 (10/06/05). Motion to stay 

litigation as to a bad faith damages claim granted as the arbitration 

agreement allows parties to submit “any and all disputes” to arbitration. 

Markel Corporation Group Ins. Co. v. PMA Capital Insurance Co., 2005 WL 

327534 (E.D. Pa. 2005). 

Associated International Ins. Co. v. Montenegro Re Ltd., 2004 WL 

2526426 (Calif. App. 2 Dist. 2004). 

Farm Bureau Mutual Ins. Co. v. American International Group Inc., No. 

4:03-CV-10050 (S.D. IA 2003), 2003 U.S. Dist. LEXIS 14463. While 

interpretation count was stayed, misrepresentation counts could 

proceed. 

United States Fire Insurance Co. v. Universal Bonding Insurance Co., et al., 

No. MRS-C-196-00, (N.J. Super., 2003), reprinted in Mealey’s Litigation 


In re: PRS Insurance Groups, Case No. 00-4070 [MFW], Adversary No. 02- 

1977 [MFW], (D. Del. Bkcy. 2003), 2003 Bankr. LEXIS 748. 


• Litigation dismissed in favor of arbitration. 

Eagle Star Insurance Company v. Highlands Insurance Company v. ACE 

Property & Casualty Insurance Company, 165 Fed.Appx. 529, 2006 WL 

204783 (9th Cir. Jan. 27, 2006). Third party complaint by cedent against 

reinsurer is subject to arbitration clause where the allegations “touch 

matters” covered by the contract. 

Continental Cas. Co. v. American National Ins. Co., 417 F.3d 727 (7th Cir. 

2005). Dispute subject to arbitration, but suit dismissed since arbitration 

forum was outside of the district. 

American Centennial Insurance Co. v. Gerling Global International 

Reinsurance Co., 2005 U.S. Dist. LEXIS 5370 (S.D.N.Y. 2005). 

PNI, Inc. v. Leyton, 2004 WL 555249 (D. Or. 2004). 

Hartford Accident & Indemnity Co. v. Ace American Reinsurance Co., 

2003 WL 22245421 (Conn. Super. 2003). 

The Canada Life Assur. Co. v. The Guardian Life Ins. Co. of America, 242 F. 

Supp. 2d 344 (S.D.N.Y. 2003). 

Security Life Ins. Co. of America v. Hannover Life Reassurance Co. of 

America, 2001 WL 392412 (D. Minn. 2001). 

Burlington Ins. Co., et al. v. Trygg-Hansa Ins. Co., 2001 WL 543221, 9 Fed. 

Appx. 196 (4th Cir. 2001). 

Hughes & Bond v. Public Service Mut. Ins. Co., 2001 Bankr. LEXIS 1803 

(Bankr. S.D.N.Y. 2001). 

Ins. Co. of the State of Pennsylvania v. American Alternative Ins. Corp., 

No. 982947 (Cal.App. 1st Dist.), reprinted in Mealey’s Litigation Report: 


Unigard Security Ins. Co. v. Banco De Seguros Del Estado, 1998 WL 

184368 (D.Mass. 1998). 

Stonewall Ins. Co. v. Argonaut Ins. Co., No. CV-97-S-461-S, (N.D.Ala.), 


(10/29/97). 

Assicurazioni Generali S.P.A. London Branch v. Sedgwick James of 

Oregon, Inc., 1997 WL 572685 (D.Ore. 1997). 


In Re: Mission Ins. Co. in Liquidation: Charles Quackenbush v. Allstate 

Ins. Co., No. B107839, (Cal.App.Ct.), reprinted in Mealey’s Litigation 


Ochsner/Sisters of Charity Health Plan Inc. v. Certain Underwriters at 

Lloyd’s London, 1996 WL 495157 (E.D.La. 1996). 

St. Paul Fire & Marine Ins. Co. v. Employers Reinsurance Corp., 919 

F.Supp. 133 (S.D.N.Y. 1996). 

Federated Rural Elec. Ins. Co. v. International Ins. Co., 1995 WL 405288 

(D.Kan. 1995). 

Cologne Reinsurance Co. of America v. Southern Underwriters Inc., et al., 

218 A.D.2d 680, 630 N.Y.S.2d 548 (1995). 

North River Ins. Co. v. Allstate Ins. Co., 866 F.Supp. 123 (S.D.N.Y. 1994). 

Stonewall Ins. Co. v. North American Reinsurance, No. BC 094185 

(Cal.Super.Ct.), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 

5, No. 8 (8/31/94). 

Maleski v. The Mut. Fire, Marine & Inland Ins. Co., 534 Pa. 575, 633 A.2d 

1143 (1993). 

Costle v. Fremont Indemnity Co., 839 F.Supp. 265 (D.Vt. 1993). 

Clarendon Nat’l Ins. Co. v. Transamerica Ins. Co., 1992 U.S.Dist. LEXIS 

7627 (S.D.N.Y. 1992). 

Schacht v. Hartford Fire Ins. Co., 1991 WL 171377, reconsideration 

denied, 1991 WL 247644 (N.D.Ill. 1991). 

North River Ins. Co. v. Reinsurance Corp., 1991 U.S. Dist. LEXIS 5734 

(S.D.N.Y. 1991). 

• Party can demand arbitration even after litigation filed. 

Ivax Corp. v. B. Braun of America Inc., No. 01-11565 (11th Cir.), reprinted 


Right to arbitrate not waived by suing a nonsignatory to an arbitration 

agreement. 

Louis Dreyfus Negoce S.A. v. Blystad Shipping & Trading, Inc., 252 F.3d 

218 (2nd Cir. 2001). Right to arbitration not waived by filing suit. 


General Security Assurance Corp. of N.Y. v. Capital Assurance Co., No. 



• Service of suit clause versus arbitration clause. 

Dinallo v. Dunav Ins. Co., No 09-cv-05575, 2009 U.S. Dist. LEXIS 108433 

(S.D.N.Y. Nov. 19, 2009). Where removal was based on diversity, Court 

found, “Service of suit clause operates as a waiver of the defendant’s 

right to remove to federal court,” aff’d, 2010 U.S. App. LEXIS 24583 (2nd 

Cir. NY 2010); mot. for reconsideration denied, 2010 U.S. Dist. LEXIS 7958 

(S.D.N.Y. February 1, 2010); aff’d by, 2010 U.S. App. LEXIS 24583 (2d Cir. 

December 1, 2010). 

B.D. Cooke & Partners Limited v. Certain Underwriters at Lloyd’s London, 

606 F.Supp. 2d 420 (S.D.N.Y. March 31, 2009). Despite finding that the 

service of suit and arbitration clauses created an “ambiguity” in the 

reinsurance contract, the Court concluded that the service of suit clause 

did not waive the defendants’ right to removal, based on New York 

Convention and Federal Arbitration Act. mot. to remand denied, 2009 

U.S. Dist. LEXIS 27143 (S.D.N.Y. 2009). Motion for reconsideration denied 

at 2010 U.S. Dist. LEXIS 21710 (S.D.N.Y March 9, 2010). 

Railroad Ins. Underwriters v. Certain Underwriters at Lloyd’s, London, 

Excess Ins. Co. Ltd. and Harpers Ins. Ltd., No. C 07-3071 (S.D.N.Y. 2007), 


(7/6/07). Service of suit clause does not override the arbitration clause 

or provide a “carve out” for purported debt collection claims. 

Security Life Ins. Co. v. Hannover Life Reassurance Co. of America, 2001 

WL 392412 (D.Minn. 2001). Service of suit clause does not carve out an 

exception to the arbitration clause, it provides means to compel 

arbitration or enforce an arbitration award. Thus, service of suit language 

does not affect a mandatory arbitration clause. 

Suter v. Munich Reinsurance Co., 223 F.3d 150 (3d Cir. 2000). Service of 

suit clause does not defeat a foreign reinsurer’s right to remove litigation 

from state court to federal court to enforce its contractual arbitration 

rights. 

Credit General Ins. Co. v. John Hancock Mut. Life. Ins. Co., 2000 U.S. Dist. 

LEXIS 9009 (N.D. Ohio 2000). Service of suit clause did not confer 

jurisdiction in the face of a broad arbitration clause. 


NRMA Ins., Ltd. v. Vesta Fire Ins. Corp., No. CV-99-C-1721-S (N.D.Ala. 

2000). Arbitration compelled in spite of service of suit clause. 

• Waiver of right to arbitrate. 

AXA Versicherung AG v. N.H. Ins. Co., No. 05-cv-10180, 2008 WL 1849312 

(S.D.N.Y. April 22, 2008), remanded, at 2009 U.S. App. LEXIS 21923 (2d 

Cir. Oct. 6, 2009). Second Circuit remands matter back to district court, in 

part, to determine if insurer had waived its right to arbitrate the matter, 

decided, at 708 F. Supp. 2d 423 (S.D.N.Y. 2010). The court found that the 

primary insurer waived its right to arbitration because it did not seek 

arbitration prior to trial, aff’d, 391 Fed. Appx. 25, 27 (2d Cir. 2010). 

Second Circuit affirmed the decision of the district court, but found that 

there was no need to reach the issue of whether the primary insurer 

waived its right to arbitration. 





Reinsurer did not waive its right to arbitration under Loss Portfolio 

Transfer Agreement by delaying its request to arbitrate where no 

showing that reinsurer acted inconsistently with its right to arbitrate and 

no prejudice. 

Republic Ins. Co. v. PAICO Receivables, LLC., 383 F.3d 341 (5th Cir. 2004). 

Reinsurer waived its right to arbitrate since it had undertaken extensive 

litigation activities to the prejudice of cedent. 

National American Ins. Co. v. Transamerica Occidental Life Ins. Co., 328 

F.3d 462 (8th Cir. 2003). Arbitrators should decide whether party to 

reinsurance contract waived the right to arbitrate because disputed 

contract was subject of prior arbitration. 

Century Indemnity Co. v. Viacom International, Inc., 2003 U.S. Dist. LEXIS 

2452 (S.D.N.Y. 2003). Party did not waive its right to arbitrate, either 

expressly or impliedly. 

General Star National Ins. Co. v. Administratia Asigurarilor de Stat, 289 F. 

3d 434 (6th Cir. 2002). Where insurer did not assert a right to arbitrate 

until 17 months after it got notice of the suit and until after a default 

judgment had been entered, it waived its right to arbitrate. 


B. Choosing A Qualified Arbitrator 

• The resignation of an arbitrator does not require a new panel. 

In re: Ins. Co. of North Am. v. Pub. Serv. Mut. Ins. Co., No. 08-cv-7003, 

2008 U.S. Dist. LEXIS 101788 (S.D.N.Y. Dec. 10, 2008), vacated by 2009 

U.S. Dist. LEXIS 55271 (S.D.N.Y. June 29, 2009), reaff’d at 2009 U.S. Dist. 

LEXIS 66325 (S.D.N.Y. July 29, 2009). Prior order compelling new 

arbitration following resignation of arbitrator for health concerns vacated 

and parties ordered to continue arbitration with original panel following 

newly-discovered evidence concerning arbitrator’s health, aff’d by 2010 

U.S. App. LEXIS 12853 (2d Cir. 2010). District Court’s decision to continue 

with the original arbitration panel, whether the arbitrator rejoined the 

panel or not, was not an abuse of discretion. 

Wellpoint Health Networks v. John Hancock Life Ins. Co., No. 07-c-943, 

2008 U.S. Dist. LEXIS 33944 (N.D. Ill. April 24, 2008). Court confirmed 

arbitration award rejecting objection based on replacement of partyappointed 

arbitrator, aff’d by 576 F.3d 643 (7th Cir. 2009), rehearing 

denied at 2009 U.S. App. LEXIS 21265 (7th Cir. Ill. Sept. 22, 2009). 

In re Arbitration Between Dow Corning Corp. v. Safety National Casualty 

Corp., 335 F.3d 742 (8th Cir. 2003). 

National American Ins. Co. v. Transamerica Occidental Life Ins. Co., 328 

F.3d 462 (8th Cir. 2003). 

• Death or resignation of arbitrator requires new panel and arbitration to begin 

anew when arbitration provision does not provide for replacement arbitrator. 

Pemex-Refinacion v. Tbilisi Shipping Co. Ltd., 2004 U.S. Dist. LEXIS 17478 

(S.D.N.Y 2004). 

• Partiality of arbitrators. 

Scandinavian Reinsurance Co. v. St. Paul Fire & Marine Ins. Co., 668 F.3d 

60 (2d Cir. N.Y. February 3, 2012). Two arbitrators’ failure to disclose 

their involvement in a possibly related arbitration was not, in itself, 

indicative of evident partiality. The standard for evident partiality is 

whether a reasonable person would have to conclude that an arbitrator 

was partial to one party of the arbitration. 

IRB-Brasil Resseguros S.A. v. Nat’l Indem. Co., 2011 U.S. Dist. LEXIS 

136640 (S.D.N.Y. November 29, 2011). Finding that communication 

between the cedent’s party appointed arbitrator and neutral umpire 


candidates did not render the umpire candidates under the control of the 

cedent, and thus, disqualification of the umpire candidates was not 

warranted. 


116664 (S.D.N.Y. October 5, 2011). Denying the cedent’s petition to 

disqualify the reinsurer’s party appointed arbitrator since the cedent 

failed to proffer any authority to grant the relief sought. 

Liberty Mutual Ins. Co., et al. v. Certain Underwriters At Lloyd’s, et al., No. 

10-cv-10623 (D.Mass. Aug. 11, 2010). An insurance group’s allegations 

that the reinsurer was not forthcoming about its previous dealings with 

the appointed umpire are not sufficient to cast doubt on the umpire’s 

neutrality. 

Scandinavian Reinsurance Co. v. St. Paul Fire & Marine Inc. Co., No. 09 

Civ. 9531, 2010 U.S. Dist. LEXIS 15952 (S.D.N.Y. Feb. 23, 2010). Evident 

partiality existed where arbitrators failed to disclose their involvement in 

simultaneous arbitration involving similar issues and common witnesses. 

Rev’d and remanded, 668 F.3d 60 (2d Cir. Feb. 3, 2012). The Second 

Circuit disagreed with the district court and found that under the 

circumstances, the fact of two arbitrators' overlapping service in the 

similar arbitrations did not, in itself, suggest that they were predisposed 

to rule in any particular way in the arbitration. 

Arrowood Indem. Co. v. Trustmark Ins. Co., No. 3-cv-1000, 2010 U.S. Dist. 

LEXIS 109782 (D. Conn. February 2, 2010). Umpire’s fully-disclosed 

relationship with Plaintiff and Plaintiff’s counsel did not constitute 

“evident partiality” under the federal Arbitration Act, 9 U.S.C. § 10. 

United States Life Ins. Co. v. Superior Nat’l Ins. Co., et al., 591 F.3d 1167 

(9th Cir. January 4, 2010). Arbitration panel’s ex parte meeting with 

neutral experts did not amount to prejudicial misbehavior as the panel 

afforded the parties ample opportunity to proffer arguments and present 

evidence. 

Trustmark Ins. Co. v. John Hancock Life Ins. Co., No. 09 C 3959, 2010 U.S. 

Dist. Lexis 4698 (N.D. Ill Jan. 21, 2010). Although a signatory to a 

confidentiality agreement in a prior arbitration between same parties, 

arbitrator failed to recuse himself from panel deliberations involving the 

operation and effect of the prior confidentiality agreement and was 

therefore disqualified in subsequent arbitration, rev’d, 2011 U.S. App. 

LEXIS 1931 (7th Cir. Ill. Jan. 31, 2011). Arbitrator designated to 

participate in the parties’ second arbitration was “disinterested” insofar 

as the arbitrator had no financial stake in the outcome and knowledge 


acquired in a prior arbitration did not require disqualification. Reh’g den., 

2011 U.S. App. LEXIS 4510 (7th Cir. Mar. 1, 2011), cert. den., 131 S. Ct. 

2465 (May 16, 2011). 


Dist. LEXIS 8078 (N.D. Ill Feb 1, 2010). Arbitrator’s participation in 

confidentiality agreement in earlier related arbitration did not disqualify 

arbitrator in second arbitration where there were no facts showing party 

and its arbitrator “breached, repudiated, or will necessarily breach the 

Confidentiality Agreement. The mere fear of a future breach in this case 

is not a cause of action,” appeal dism’d No. 10-1502 (7th Cir. Feb. 2, 

2010). 

Employers Ins. Co. of Wausau v. Certain Underwriters at Lloyd’s of 

London, 09-cv-201-bbc, 2009 U.S. Dist. LEXIS 89945 (W.D. Wis. Sep. 29, 

2009), reconsideration denied, 2009 U.S. Dist. LEXIS 98746 (W.D. Wis. 

Oct. 23, 2009). Request to disqualify party-appointed arbitrator denied as 

allegations deemed “too attenuated” and did not demonstrate actual or 

apparent partiality. 

Ario v. Cologne Reinsurance (Barbados), Ltd.,, 2009 U.S. Dist. LEXIS 

106133 (M.D. Pa. Nov. 13, 2009). Confirming the award and finding no 

evidence of “evident partiality” by the arbitrators. 

Uhl v. Komatsu Forklift Co., 512 F.3d 294 (6th Cir. 2008). Parties must 

demonstrate specific facts that indicate improper motive to prove an 

arbitrator’s “evident partiality” under the Federal Arbitration Act. 

Arbitrator’s failure to disclose previous relationship as co-counsel with 

party counsel did not amount to evident partiality. 

Glacier Reinsurance AG v. Odyssey American Reinsurance Corp., No. 07- 

583; 2007 WL 1875658 (D. Conn. June 27, 2007). Court appointed umpire 

nominee in reinsurance arbitration because the nominee had previously 

served as arbitrator or umpire for both parties and was therefore less 

likely to be partial to either party to the arbitration. 

The Travelers Indemnity Co, et al. v. Everest Reinsurance Co., 2004 WL 

2297860 (D. Conn. 2004). Where court was charged with appointing an 

umpire, nominee was not chosen because of previous employment as 

expert witness for one party. Court held “the mere impression of 

possible bias is enough for the court to pass on his appointment as 

umpire.” 

Fidelity Federal Bank v. Durga Ma Corp., Nos. 02-56381, 56548 (9 th Cir. 

2004). Party with constructive knowledge of arbitrator’s partiality waives 


ight to challenge such partiality if it fails to object to the arbitrator’s 

appointment until after the award is issued. 

Encyclopaedia Universalis DS.A. v. Encyclopedia Britannica Inc., No. 03- 

Civ. 4363 [SAS], (S.D.N.Y. 2003), 2003 LEXIS 21850, aff’d 2005 U.S. App. 

LEXIS 5157 (2d Cir. 2005). The failure to discuss with another arbitrator 

the appointment of a third arbitrator as per the agreement and the 

decision of an award made by only two arbitrators, leaving one party and 

its appointed arbitrator out, creates the appearance of impropriety and 

perceived bias. 


Corp., 335 F.3d 742 (8th Cir. 2003). No finding of “evident partiality.” 

Continental Casualty Co. v. QBE Ins. Co., No. 03 C 2222 (N.D.Ill. 2003), 

2003 U.S. Dist. LEXIS 17826. Where transaction took place in the U.S. and 

is governed by U.S. law, umpire need not be from a country other than 

that of the parties in order to be impartial. 

Certain Underwriters at Lloyd’s London v. Argonaut Ins. Co., 264 F. Supp. 

2d 926 (N.D.Cal. 2003). Court refused to disqualify umpire for evident 

partiality because Federal Arbitration Act does not allow removal before 

issuance of final arbitral award. 

Feinberg v. Katz, 2003 U.S. Dist. LEXIS 1677 (S.D.N.Y. 2003). Motion to 

disqualify counsel denied as court held that an attorney who had served 

as a party-appointed arbitrator in related matter was allowed to continue 

as that party’s counsel. 

Nationwide Mutual Ins. Co. v. First State Ins. Co., 213 F.Supp. 2d 10 

(D.Mass. 2002). Judge refused to vacate an arbitration award finding no 

improper bias on the part of a party-appointed arbitrator. 

Sphere Drake Ins. Co. Ltd. v. All American Ins. Co., 307 F.3d 617 (7th Cir. 

2002); cert. denied, American Gen. Life Ins. Co., v. Sphere Drake Ins. Co., 

123 S. Ct. 1754 (2003). Holding that the lower court erred in setting aside 

a final arbitration award since there was no evidence that the party 

appointed arbitrator’s failure to make full disclosure demonstrated 

“evident partiality.” 

Truck Ins. Exchange v. Certain Underwriters at Lloyd’s London, et al., No. 

S068479 (Cal. Super. 2001), reprinted in Mealey’s Litigation Report: 

Reinsurance, Vol 12, No. 5 (7/5/01). Attorney precluded from serving as 

an arbitrator because he and his firm may have performed legal services 


for some of the defendant reinsurers where agreement called for 

arbitrators that were “disinterested.” 

First State Ins. Co. v. Employers Ins. Of Wausau, No. 99-12478 (D.Mass.), 


(3/9/00). Reinsurer precluded from appointing its regular lawyer as an 

arbitrator where agreement called for panel of “disinterested” 

arbitrators. 

Schmitz v. Zilveti, 20 F.3d 1043 (9th Cir. 1994). Award vacated as 

arbitrator was “evidently partial.” 

Property and Cas. Ins. Ltd. v. American Centennial Ins. Co., No. 3:94-CV- 

1014-X (N.D. Texas), reprinted in Mealey’s Litigation Report: 

Reinsurance, Vol. 5, No. 13 (11/9/94). No finding of “evident partiality.” 

• Motion to vacate arbitration award based on arbitrator’s alleged bias, 

misconduct, or lack of qualifications denied. 

Nationwide Mutual Insurance Co. v. The Home Insurance Company, No. 

C2-03933 (S.D. Ohio 2004), reprinted in Mealey’s Litigation Report: 

Reinsurance, Vol. 15, No. 11 (10/07/04), aff’d, 429 F.3d 640 (6th Cir. 

2005). 

British Ins. Co. of Cayman v. Water Street Ins. Co., Ltd., 93 F.Supp.2d 506 

(S.D.N.Y. 2000). 

Northwestern Nat’l Ins. Co. v. Generali Mexico Compania de Seguros, 

S.A., 2000 WL 520638 (S.D.N.Y. 2000), reh’g denied, 2000 WL 702996 

(S.D.N.Y. May 30, 2000). 

Nationwide Mut. Ins. Co. v. The Home Ins. Co., 90 F.Supp.2d 893 (S.D. 

Ohio 2000), aff’d, 278 F.3d 621 (6th Cir. 2002), aff’d in part, rev’d in part, 

330 F.3d 843 (6th Cir. 2003). Portion of the district court’s judgment 

vacating the arbitrators’ order that insurer pay a third-party was 

affirmed; portion of order requiring arbitrators to reconsider offset was 

reversed. 

Northwestern Nat’l Ins. Co. v. Allstate Ins. Co., 832 F.Supp. 1280 (E.D.Wis. 

1993). 

• When arbitrator resigns, party who originally designated that arbitrator 

nominates the substitute arbitrator. 

NW. Nat’l Ins. Co. v. INSCO, Ltd., 2011 U.S. Dist. LEXIS 50789 (S.D.N.Y. 

May 12, 2011). Cedent sought a court-appointed replacement party 


arbitrator for the reinsurer. However, the court refused to appoint a 

replacement party arbitrator for the reinsurer upon the resignation of the 

reinsurer’s initial selection when the reinsurer agreed to and had already 

appointed a replacement arbitrator. 

In the matter of the Arbitration Between Evanston Ins. Co. and Kansa 

Gen. Intern. Ins. Co., 1995 WL 23063 (N.D.Ill. 1995). 

• Reviewing impartiality of arbitrator is improper prior to arbitration. 


Dist. LEXIS 8078 (N.D. Ill Feb 1, 2010). “The requirement that [an] 

arbitrator be ‘disinterested’ is an issue of bias or qualification available 

for challenge only after an arbitration award issues.” 

Odyssey Reinsurance Corp. v. ACE Property & Cas. Ins. Co., No. 04 Civ. 



Gulf Guar. Life Ins. Co. v. Conn. Gen. Life Ins. Co., 304 F.3d 476 (5th Cir. 

2002). 

Travelers Indemnity Co. v. Gerling Global Reinsurance Corp., 2001 U.S. 


In re Arbitration between Certain Underwriters at Lloyd’s, London and 

Continental Cas. Co., 1997 WL 461035 (N.D.Ill. 1997). 

Fireman’s Fund Ins. Co. v. Sorema North America Reinsurance Co., 1995 

WL 597266 (N.D.Cal. 1995). 

Old Republic Ins. Co. v. Meadows Indemnity Co., Ltd., 870 F.Supp. 210 

(N.D.Ill. 1994). 

• Arbitrator can be removed before the entry of an award for misconduct. 

Metropolitan Property and Cas. Ins. Co. v. J.C. Penney Cas. Ins. Co., 780 

F.Supp. 885 (D.Conn. 1991). 

• Delay in choosing arbitrator does not waive right to appoint arbitrator. 

In the Matter of the Arbitration Between Argonaut Midwest Ins. Co. v. 

General Reinsurance Corp., 1998 WL 474142 (N.D.Ill. 1998). 

New England Reinsurance Corp. v. Tennessee Ins. Co., 780 F.Supp. 73 

(D.Mass. 1991). 


• Delay in choosing arbitrator forfeits right to appoint arbitrator. 

Certain Underwriters at Lloyd’s London v. Argonaut Ins., 500 F.3d 571 (7 th 

Cir. 2007). Reinsured forfeited its right to appoint an arbitrator by failing 

to make the appointment within 30 days of receiving written notice from 

the reinsurer to do so. In seeking a uniform federal rule and with no 

state-specific exceptions extending the appointment deadlines, the 

Seventh Circuit upheld the strict adherence to the 30 day time limit, 

motion to vacate subsequent arbitration award denied at 2009 U.S. Dist. 

LEXIS 87827 (N.D.Ill. Sept. 24, 2009). 

Continental Casualty Co. v. Hartford Steam Boiler Inspection and Ins. Co., 

2004 WL 725469 (N.D.Ill. 2004). 

In the matter of the arbitration between Cravens Dargon & Co. v. The 

General Ins. Co. of Trieste and Venice - U.S. Branch, 1996 WL 41825 

(S.D.N.Y. 1996). 

In Re: Employers Ins. of Wausau v. Jackson, 190 Wis.2d 597, 527 N.W.2d 

681 (1995), recon. denied, 534 N.W.2d 88 (1995). 

Universal Reinsurance Corp. v. Allstate Ins. Co., 16 F.3d 125 (7th Cir. 

1994). 

• Delay in choosing arbitrator operates as forfeiture against respondent but not 

claimant. 

Certain Underwriters at Lloyd’s v. Mutual Marine Office, Inc., No. 

603452/04 (N.Y. Sup., New York Co. 2005), reprinted in Mealey’s 

Litigation Report: Reinsurance, Vol. 16, No. 1 (05/12/05). Treaty set no 

time restriction upon claimant under which it had to appoint its 

arbitrator. In any event, respondent had no right to bring special 

proceeding seeking to have court appoint arbitrator on behalf of 

claimant. 

Century Indemnity Co. v. Arkwright Ins. Co., No. 99-MISC-46 (E.D. Pa.), 


(6/15/00). 

• Delay in choosing arbitrator does not invalidate selection. 

Lincoln Gen. Ins. Co. v. Clarendon Nat’l Ins. Co., No. 04:08-cv-0583 (M.D. 

Pa. Aug. 15, 2008). Where party sought judicial review of its obligation to 

arbitrate, a short, non-prejudicial, and good faith delay in appointing an 

arbitrator does not waive a party’s right to appoint an arbitrator. 


Ancon Insurance Company (U.K.) Limited v. GE Reinsurance Corporation, 

480 F.Supp.2d 1278 (D. Kan. 2007). Despite valid adverse selection 

clause, clerical error resulting in late arbitrator appointment will not 

invalidate selection where contract did not make time of the essence. 

• Sufficient time must pass before the inability to choose an umpire justifies 

judicial intervention. 

• Arbitrator Immunity 

Global Reinsurance Corp.-U.S. Branch, f/k/a Gerling Global Reinsurance 

Corp-U.S. Branch v. Certain Underwriters at Lloyd’s, London, 465 F. Supp. 

2d 308 (S.D.N.Y. 2006). Six days between the time insured notified 

reinsurers of objection to umpire candidate and the time the petition to 

appoint an umpire cannot be characterized properly as a ‘lapse’ that 

justifies judicial intervention. 

Morgan Phillips, Inc. v. Jams/Endispute, 140 Cal.App.4th 795 (2006). 

Arbitral immunity does not apply to arbitrator who withdraws from 

arbitration and refuses to render arbitration award without legal cause. 

Prudential-Bache Securities [Hong Kong] Ltd. And Prudential-Bache 

International Bank Ltd. v. National Association of Securities Dealers 

Dispute Resolution Inc., 2003 U.S. Dist. LEXIS 19239, No. 03 Civ 556 [JSR] 

(S.D.N.Y. 2003). Arbitrators and their sponsors “are immune from suit for 

jurisdictional determinations made in their capacity as arbitrators.” 

Leibowitz v. City of New York, 2001 N.Y. Slip Op. 40053(U). Arbitrator 

immune from lawsuit for failing to file an arbitration award on time. 

• Motion to compel parties to proceed with the umpire selection process granted. 

Munich Reinsurance America, Inc. v. National Casualty Company, 2011 

U.S. Dist. LEXIS 44759 (S.D.N.Y. April 26, 2011). Motion to compel 

arbitration granted. Court found issue of how “act as one” provision 

applies to be issue for arbitration panel. 

Clearwater Insurance Co. v. Granite State Insurance Co., et al., 2006 U.S. 

Dist. LEXIS 74771 (N.D. Cal. 2006). 

Odyssey Reinsurance Corp. v. ACE Property & Cas. Ins. Co., No. 04 Civ. 




Fidelity Security Life Ins. Co., et al. v. John Hancock Life Ins. Co., No. 01- 

11663 WGY (D. Mass. 2002), reprinted in Mealey’s Litigation Report: 


• Judicial selection of an umpire when the arbitrators are unable to agree. 

Employers Ins. Co. of Wausau v. Certain Underwriters at Lloyd’s of 

London, 09-cv-201-bbc, 2009 U.S. Dist. LEXIS 89945 (W.D. Wis. Sep. 29, 

2009), reconsideration denied, 2009 U.S. Dist. LEXIS 98746 (W.D. Wis. 

Oct. 23, 2009) 

• Section 5 of the Federal Arbitration Act gives a court authority to select a 

replacement umpire when the reinsurance contract in question is silent on the 

issue. 

AIG Global Trade and Political Risk Insurance Co., et al. v. Odyssey 

American Reinsurance Corporation, et al., No. 05-9152, (S.D.N.Y. 2006). 

Section 5 of the Federal Arbitration Act gives a court authority to select a 

replacement umpire when the reinsurance contract in question is silent 

on the issue. 

• Section 5 of the Federal Arbitration Act does not preclude judicial involvement in 

procedural pre-arbitration matters, such as enforcing a contractual provision 

specifying that umpire candidates must be neutral. 

Arrowood Indem. Co. v. Clearwater Ins. Co., 2011 Conn. Super. LEXIS 

3334 (Conn. Super. Ct. July 26, 2011). 

• Where arbitration panel shows manifest disregard for state law, issues on 

remand should be decided by new arbitration panel. 

Koken v. Cologne Reinsurance [Barbados] Ltd., 2006 WL 2460902 (M.D. 

Pa. 2006), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 17, 

No. 16 (12/21/06). 

C. Authority Of Arbitrators 

• Arbitrators exceeded their authority. 

Amerisure Mut. Ins. Co. v. Global Reinsurance Corp. of America, f/k/a 

Gerling Global Reinsurance Corp. of America, No. 09-0820, 927 N.E.2d 

740 (Ill. App. 2010). Arbitration panel committed a “gross error of law” in 

awarding attorney fees pursuant to Illinois Insurance Code, 215 ILCS 

5/155, as the authority to award attorney fees pursuant this statute 

exclusively rested with the circuit court. Reh’g den., 2010 Ill. App. LEXIS 


461 (Ill. App. Ct. Apr. 15, 2010), cert. den., 237 Ill. 2d 551, 938 N.E.2d 518 

(Ill. 2010). 

PMA Capital Ins. Co. v. Platinum Underwriters Bermuda, Ltd., No. 09-mc- 

0084, 2009 U.S. Dist. LEXIS 85046 (E.D. Pa. Sept. 15, 2009). Arbitration 

award vacated as being “completely irrational” insofar as the award 

eliminated key provisions of the reinsurance agreement and awarded 

relief not sought, aff’d, 2010 U.S. App. Lexis 23222 (3d Cir. Pa. Nov. 8, 

2010). 


2nd Dist., reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 16, 

No. 18 (01/19/06). Arbitrators did not have authority to grant reinsurers 

setoff of damages against their obligation to return premiums upon 

rescission of reinsurance contract. 


Civ. 4363 [SAS] (S.D.N.Y. 2003), 2003 LEXIS 21850, aff’d 2005 U.S. App. 

LEXIS 5157 (2d Cir. 2005). An arbitral tribunal that was improperly 

composed has no power to bind the parties; any assertion of such power 

exceeds its mandate. 

• Arbitration panel has authority to fashion a remedy not specifically requested by 

a party, provided the remedy relates to an issue directly before the panel. 

Harper Ins. Ltd. v. Century Indem. Co., No. 10 Civ. 7866, 2011 U.S. Dist. 

LEXIS 84112 (S.D.N.Y. July 27, 2011). 

• Arbitration panel has authority to award punitive damages. 

Bowen v. Amoco Pipeline Co., 2001 U.S. App. LEXIS 13867 (10th Cir 2001). 

• Arbitration panel’s authority defined by the reinsurance agreement’s arbitration 

provision, not petition to compel arbitration. 

Associated Int’l Ins. Co. v. Montenegro Re, Ltd., No. B203064, 2008 Cal. 

App. Unpub. LEXIS 10329 (2008). 

• Unless contract provides otherwise, arbitration panel may resolve issues 

presented to it. 


(S.D.N.Y. 2008). Arbitration panel did not exceed its authority in clarifying 

previous orders relating to the calculation of the amount awarded. 


Commercial Risk Reinsurance Co. v. Sec. Ins. Co., 526 F. Supp. 2d 424 

(S.D.N.Y. 2007), order denying reconsideration, December 12, 2007. 

Arbitration panel has broad discretion to determine the admissibility of 

witness testimony, and appropriately exercised its discretion in excluding 

reinsurer’s witness on damages, who had not been previously disclosed. 

Burlington Ins. Co. v. Trygg-Hansa Ins. Co., AB, No. 1:99CV00334, 2006 

WL 1367418 (M.D. N.C. May 16, 2006). Second arbitration panel did not 

exceed authority in treating prior panel’s award as setoff. “If the 

[arbitration] clauses cover all claims, then the panel may rationally issue 

one final award after multiple rounds of arbitration.” 


S.A., 2000 WL 702996 (S.D.N.Y. 2000). Arbitration panel may award 

attorneys’ fees under appropriate circumstances absent a specific 

prohibition in the arbitration clause. 

St. Paul Fire & Maine Ins. Co. v. Employers Reinsurance Co., 919 

F.Supp. 133 (S.D.N.Y. 1996). 

Michigan Mut. Ins. Co. v. Unigard Sec. Ins. Co., 44 F.3d 826 (9th Cir. 

1995). 

General Security Assurance Corp. of N.Y. v. Capital Assurance Co., No. 



• Arbitrators have expansive authority to manage and conduct arbitrations. 

TIG Ins. Co. v. Global Int’l. Reinsurance Co., 08 Civ. 7338, 09 Civ. 1289, 

640 F. Supp. 2d 519 (S.D.N.Y. Aug. 7, 2009). Arbitrators have great 

latitude to determine the procedures governing their proceeding, and to 

restrict or control evidentiary proceedings, including summary judgment. 

• Arbitrators have extensive latitude in applying relevant law, and the “manifest 

disregard” doctrine is limited to instances of egregious impropriety. 

ACE American Insurance Company, et al. v. Christiana Insurance LLC, 

No. 11-cv-8862, 2012 U.S. Dist. LEXIS 51863 (S.D.N.Y. April 12, 2012). 

• Arbitrators have authority to determine if arbitration provision was terminated. 

Sun Life Assurance Co. of Canada v. Liberty Mutual Ins. Co., No. 09-cv- 

02133, 2009 U.S. Dist. LEXIS 114694 (S.D.Cal. Dec. 9, 2009). Where broad 

arbitration clauses exist, arbitrator must determine if such a clause has 

been effectively eliminated by a commutation. 


• Arbitration provision not limited to disputes over existing claims. 


2001 U.S. App. LEXIS 6465 (2nd Cir. 2001). Manner in which insurer 

should allocate its reinsurance billings to its reinsurer was a proper issue 

for an arbitration panel to determine pursuant to the language contained 

in the treaty reinsurance contracts. 

• Arbitrators, not the Court, must decide scope of counterclaims to be resolved in 

an arbitration. 

Century Indemnity Co. v. New England Reinsurance Corp., 2004 U.S. Dist. 

LEXIS 15404 (E.D. Pa. 2004). 

• Arbitration applies only to interpretation of contract disputes. 

Associated Indem. Corp. v. The Home Ins. Co., 19 F.3d 1432 (6th Cir. 

1994). 

• Issue of reinsurer’s ultimate liability is arbitrable. 

Alabama Reassurance Co. v. Sutcher (In re Inter-Am. Ins. Co.), 303 

Ill.App.3d 95, 707 N.E.2d 617 (1999). 

• Whether award in prior arbitration operates as res judicata or collateral estoppel 

is issue for arbitration panel. 

North River v. Allstate, 866 F.Supp. 123 (S.D.N.Y. 1994). 

Excess and Treaty Management Corp. v. North River Ins. Corp., 1994 WL 

323213 (S.D.N.Y. 1994). 

• Whether award in prior arbitration operates as res judicata or collateral estoppel 

is issue for judge, not arbitration panel. 

AXA Versicherung AG v. N.H. Ins. Co., 2008 U.S. Dist. LEXIS 3803 (S.D.N.Y. 

Jan. 12, 2008). Court denied reinsured’s collateral estoppel argument 

based on prior arbitration award reasoning that the panel’s failure to 

couch its finding as a “legal determination,” and its failure to decide 

identical issues, precluded the application of the doctrine, remanded on 

other issues, at 2009 U.S. App. LEXIS 21923 (2nd Cir. Oct. 6, 2009). 

Federated Rural Elec. Ins. Exch. v. Nationwide Mut. Ins. Co., 134 F.Supp. 

2d 923 (S.D. Ohio 2001). 


Rembrandt Industries, Inc. v. Hodges International, Inc., 344 N.E.2d 383, 

38 N.Y.2d 502 (1976). 

• Effect of prior court ruling regarding arbitrability of disputes is a question 

reserved for the arbitrator. 

The Am. Ins. Co. v. Am. Re-Insurance Co., 2006 U.S. Dist. LEXIS 95801 

(N.D. Cal. 2006). 

Federated Rural Elec. Ins. Exch. v. Nationwide Mut. Ins. Co., 134 F.Supp. 

2d 923 (S.D. Ohio 2001). 

• Conversion claim not subject to arbitration. 

Old Republic Ins. Co., et al. v. Tom Lanier, 644 So.2d 1258 (Ala. 1994). 

• Arbitration panel can re-examine its decision only under limited circumstances, 

like apparent mistake. 

Colonial Penn Ins. Co. v. Omaha Indemnity Co., et al., 943 F.2d 327 (3rd 

Cir. 1991). 

• Arbitration panel’s authority to order the production of documents by a 

nonparty for discovery purposes is limited. 

Life Receivables Trust v. Syndicate 102, 549 F.3d 210 (2d Cir. 2008). 

Section 7 of the FAA does not authorize an arbitrator to compel prehearing 

document discovery from non-parties. 

Dynegy Midstream Services, LP v. Trammochem, 451 F.3d 89 (2d Cir. 

2006). Federal Arbitration Act does not authorize nationwide service of 

process or enforcement. 

Hay Group, Inc. v. E.B.S., Acquisition Corp., 360 F.3d 404 (3d Cir. 2004). 

Arbitrator’s subpoena power under Section 7 does not include authority 

to subpoena non-parties for pre-hearing discovery. 

• Section 7 of the FAA authorizes arbitrators to compel pre-hearing document 

discovery from non-parties. 

In re Arbitration Between Sec. Life Ins. Co. of Am., 228 F.3d 865 (8 th Cir. 

2000). 


• Section 7 of the FAA may authorize pre-hearing document discovery where there 

is a special need for the documents. 

COMSTAT Corp. v. NSF, 190 F.3d 269 (4th Cir. 1999). FAA does not 

authorize a federal court to compel a nonparty’s compliance with an 

arbitrator’s subpoena for pre-hearing discovery, absent a showing of 

special need or hardship. 

• A court cannot order depositions in private arbitration proceedings. 

In re Arbitration between Norfolk Southern Corporation, et al., and ACE 

Bermuda, 626 F.Supp.2d 882 (N.D. Ill. June 15, 2009). 28 U.S.C. § 1782 

does not grant the district courts authority to order U.S. witnesses to 

provide testimony or documents for use in a foreign, private arbitration. 

Matria Healthcare, LLC v. Duthie, 584 F. Supp. 2d 1078 (N.D. Ill. October 

6, 2008). Non-party to an arbitration cannot be compelled to participate 

in deposition discovery under Section 7 of the Federal Arbitration Act 

without the non-party’s consent. 

Viking Ins. Co. v. Rossdale, et al., (Eng. Comm., QBD), reprinted in 


• Finality of arbitration award is not arbitrable. 

Federated Rural Electric Ins. Exchange v. Nationwide Mut. Ins. Co., 134 

F.Supp.2d 923 (S.D. Ohio 2001). 

• Enforcement of subpoena issued by arbitration panel or at its request upheld. 

Scandinavian Reinsur. Co. v. Continental Cas. Co., No. 04 C 7020 (N.D.Il. 

2004), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 15, No. 

18 (1/20/05). Arbitration panel can compel non-party witnesses to 

attend pre-hearing depositions. 

Riunione Di Sicurta, SPA v. United Nat’l Ins. Co., No. 01-MC-72 (E.D. Pa. 

Sept. 20, 2001). 

In the Matter of Arbitration Between Security Life Ins. Co. of America and 

Duncanson & Holt, Inc., 228 F.3d 865 (8th Cir. 2000). 

• Arbitration award in excess of limits of involved treaties upheld. 

Employers Ins. of Wausau v. Certain Underwriters at Lloyd’s London, 202 

Wis.2d 673, 552 N.W.2d 420 (1996). 


• Arbitrators may impose equitable solution to reinsurance dispute. 

Unigard Security Ins. Co. v. CIGNA Reinsurance Co., 82 F.3d 423 (9th Cir. 

1996). 

• Arbitration award can be judicially reviewed if there are allegations the 

arbitrators exceeded their authority. 

HCC Aviation Insurance Group v. Employers Reinsurance Co., 2005 WL 

2233594 (N.D. Tex. September 13, 2005). Arbitrators exceeded their 

powers in ordering a reinsurer to indemnify a claims handling facility 

pursuant to the “law of the case” doctrine, as the issue had been 

resolved in an earlier stage of the same litigation. 


Corp., 335 F.3d 742 (8th Cir. 2003). Arbitrators exceeded their authority 

in declaring their decision to be binding. The court ruled that according to 

the agreement between the parties, the arbitration award is non-binding 

as a matter of law. 

Colonial Penn Ins. Co. v. American Centennial Ins. Co., 1997 WL 10004 

(S.D.N.Y. 1997), aff’d, 133 F.3d 906 (2nd Cir. 1997). 

Executive Life Ins. Co. v. Alexander Ins. Ltd., 999 F.2d 318 (8th Cir. 1993). 

Found that arbitrators had not exceeded their authority. 

• Confidentiality of arbitration. 

Swiss Reinsurance Co. Ltd. v. Lincoln National Reinsurance Company 

(Barbados) Limited, No. 09-cv-00036, (N.D. Ind. Feb. 6, 2009). Court 

grants reinsurance company’s motion to seal its petition to confirm an 

arbitral award under the New York Convention. 

Century Indem. Corp. v. Certain Underwriters at Lloyd’s London, No. 08- 

219, 2009 U.S. Dist. LEXIS 1744 (E.D. Pa. Jan. 12, 2009). Court granted 

motion to seal the final arbitration award concluding that it was within its 

discretion to seal award based on significant business, privacy interests. 

Nationwide Mut. Ins. Co. v. Randall & Quilter Reinsurance Co., No. C2-07- 

120, 2008 WL 207854 (S.D. Ohio Jan. 24 2008). Court denied motion to 

confirm purported interim confidentiality award since no written order 

was entered and statute of limitations had run since purported 

confidentiality award was an interim award for which confirmation 

should have been sought within one year. 


TIG Ins. Co. v. AON Re, Inc., 2004 WL 2826395 (N.D. Tex. 2004). Court 

denied insurer’s motion to file entire summary judgment motion under 

seal in connection with issues arising from confidential arbitration but 

allowed insurer to refile it with confidential portions separately compiled. 

Trustmark Ins. Co. v. John Hancock Life Ins. Co., 2004 U.S. Dist. LEXIS 

10922 (N.D. Ill. 2004). Courts should not include arbitration panel’s 

reasoning in order confirming arbitration award. 

The Travelers Ins. Co. v. Connecticut General Life Ins. Co., 2003 WL 

22413681 (Conn. Super. 2003). An agreement between the parties to 

keep an arbitration award confidential is not sufficient to overcome the 

presumption favoring public access to judicial records. Preserving the 

confidentiality of an arbitration award requires a showing of a specific 

injury. 

• A court has authority to dismiss arbitration for lack of prosecution. 

Windward Agency, Inc. v. Cologne Reinsurance Co., 123 Fed.Appx. 481 

(3rd Cir. 2005). 

Windward Agency Inc. v. Cologne Life Reinsurance Co., 353 F.Supp.2d 538 

(E.D. Pa. 2003). 

• If party agrees to submit issue to arbitration, it cannot later argue that 

arbitrators exceeded their authority in deciding issue. 

Sphere Drake Ins. Co. v. All American Life Ins. Co., 2004 WL 442640 (N.D. 

Ill. 2004). 

• Party-appointed arbitrators can select a non-U.S. umpire. 

Mutual Marine Office, Inc. v. Insurance Corporation of Ireland, 2005 U.S. 


• Issue of attorney disqualification in an arbitration is appropriately decided by a 

court and not the arbitrators. 

Employers Ins. Co. of Wausau v. Munich Reins. Am., Inc., 2011 U.S. Dist. 

LEXIS 52048 (S.D.N.Y. May 13, 2011). Dispute over whether retrocedent’s 

attorney should be disqualified because counsel had previously 

represented the retrocessionaire in an allegedly substantially similar 

matter was properly decided by the court and not the panel as this 

dispute did not arise out of the reinsurance contracts so as to put the 

matter squarely before the arbitration panel. 


• Issues of procedural arbitrability are for arbitrators to decide. 





Arbitrators, not a court, should decide whether conditions precedent to 

arbitration have been met, such as whether party’s compliance with 

statute of limitations on underlying claim is condition precedent to 

arbitration. 

• Arbitrators can order the reimbursement of arbitration and attorney fees. 

General Security National Ins. Co. v. Aequicap Program Administrators, 

785 F. Supp. 2d 411 (S.D.N.Y. April 29, 2011). Arbitration panel did not 

exceed its authority or act with manifest disregard for the law in ordering 

an award of attorneys fees. 

ReliaStar Life Ins. Co. of N.Y. v. EMC National Life Co., 564 F.3d 81 (2nd 

Cir. 2009). Second Circuit concludes that the parties’ arbitration 

agreement was sufficiently broad to confer equitable authority on the 

arbitrators to sanction a party’s bad faith participation at the arbitration 

in the form of attorney’s and arbitrator’s fees. 

National Union Fire Ins. Co. of Pittsburgh PA v. Odyssey American 

Reinsurance Corp., No. 05-cv-07539, 2009 U.S. Dist. LEXIS 108318 

(S.D.N.Y. 2009). Arbitration panel did not act with manifest disregard of 

the law in ordering an award of attorneys’ fees. 

Certain Underwriters at Lloyd’s London v. Argonaut Ins. Co., No. 04-cv- 

05852, 2009 U.S. Dist. LEXIS 87827 (N.D. Ill. Sept. 24, 2009). 

Newmont U.S.A. Ltd. V. Ins. Co. of N.A., No. 06-cv-01178-ZLW-BNB, 2008 

WL 4378777 (D. Colo., Sept. 19, 2008). 

Odyssey Reinsurance Corp., et al. v. ACE Property & Casualty Insurance 

Co., 2006 N.Y. Misc. LEXIS 2439 (N.Y. Sup. Ct. 2006), reprinted in Mealey’s 

Litigation Report: Reinsurance, Vol. 17, No. 8 (08/17/2006). Arbitrators 

did not exceed authority in ordering reinsurer to reimburse cedent’s 

arbitration fees from the date of filing of pre-hearing briefs to the date of 

the arbitration award. 


• Pre-judgment interest properly decided by arbitrators. 

Newmont U.S.A. Ltd. v. Ins. Co. of N.A., No. 06-cv-01178-ZLW-BNB, 2008 

WL 4378777 (D. Colo., Sept. 19, 2008). 

• Post-judgment interest rate on an arbitration award is a question for the court 

and calculated according to federal post-judgment interest statute. 

Newmont U.S.A. Ltd. v. Ins. Co. of N.A., No. 06-cv-01178-ZLW-BNB, 2008 

WL 4378777 (D. Colo., Sept. 19, 2008). 

• Post-judgment interest on arbitration award imposed by trial court interferes 

with the arbitrator’s jurisdiction and impermissibly modifies the award. 

Barnes v. Old American Mut. Fire. Ins. Co., No. 03-07-00404-CV, 2010 Tex. 

App. LEXIS 1353 (February 26, 2010), reprinted in Mealey’s Litigation 

Reports: Reinsurance, Vol. 20, No. 21 (3/5/10). 

• Arbitrators, not a judge, should decide whether reinsurer can offset sums owed 

by another reinsurer. 

Aegis Security Insurance Co. v. Harco National Insurance Co., No. 1:CV-06- 

0606, 2006 WL 1722395 (M.D. Pa. June 22, 2006); reprinted in Mealey’s 

Litigation Report: Reinsurance, Vol. 17, No. 9 (09/07/06). 

• When arbitration award is ambiguous, issue must be remanded to arbitration 

panel for clarification. 

Security Insurance Company of Hartford, as successor to Fire and 

Casualty Insurance Company of Connecticut v. Trustmark Insurance Co., 

2006 U.S. Dist. LEXIS 82438 (D. Conn. 2006). 

D. Consolidation Of Arbitrations 

• Arbitrations cannot be consolidated if a party objects and the agreement does 

not address consolidation. 

Employers Insurance Company of Wausau v. Century Indemnity Co., 2005 

WL 2100977 (W.D. Wis. 2005), aff’d, 443 F.3d 573 (7th Cir. 2006). 

Consolidation is a procedural issue to be decided by the arbitrators. 

ReliaStar Life Ins. Co. v. Canada Life Assur. Co., 2005 U.S. Dist. LEXIS 4045 

(D. Minn. 2005). 

Certain Underwriters at Lloyd’s and Excess Insurance Company, Ltd. v. 

Century Indemnity Co., 2005 WL 1941652 (E.D. Pa. 2005). 



Dist. LEXIS 2649 (D. Minn. 2004). 

Employers Insurance of Wausau v. First State Ins. Group, 2004 U.S. Dist. 

LEXIS 12712 (D. Mass. 2004). It was improper for a party to ask an 

arbitration panel to override court’s decision to deny consolidation based 

on subsequent legal developments. 

Clarendon Nat’l Ins. Co. v. The John Hancock Life Ins. Co., 2001 U.S. Dist. 

LEXIS 13736 (S.D.N.Y. 2001). 


87 F. Supp. 2d 300 (S.D.N.Y. 2000), aff’d in part and rev’d in part, 246 F.3d 

219 (2nd Cir. 2001). 

Home Ins. Co. v. New England Reinsurance Corp., 1999 WL 681388 

(S.D.N.Y. 1999). 

Ins. Co. of the State of Pennsylvania v. American Alternative Ins. Corp., 

No. 982947 (Cal. Super., San Francisco Co.), reprinted in Mealey’s 

Litigation Report: Reinsurance, Vol. 8, No. 23 (4/16/98). 

American Centennial Ins. Co. v. Nat’l Cas. Co., 951 F.2d 107 (6th Cir. 

1991). 

• Arbitrations consolidated despite objections and fact that agreement did not 

address consolidation. 

Prudential Property and Cas. Ins. Co. v. Folksamerica Reinsurance Co., et 

al., No. 01-3504 (D.N.J. 2001), reprinted in Mealey’s Litigation Report: 


General & Cologne Life Re of America v. Connecticut General Life Ins. Co., 

et al., No. 600278 (N.Y.Sup. 2001), reprinted in Mealey’s Litigation 

Report: Reinsurance, Vol. 12, No. 8 (8/16/01). A party may arbitrate its 

claims arising from its participation as both a retrocessionaire and a 

retrocedent in one consolidated proceeding. 

Interstate Fire & Cas. Co. v. Ameristar Ins. Services, Inc., 2000 WL 984290 

(N.D.Ill. 2000). 

Connecticut General Life Ins. Co. v. Sun Life Assurance Co. of Canada, 210 

F.3d 771 (7th Cir. 2000). 


• Arbitration consolidated where agreement addresses consolidation. 

Bank of America, N.A. v. Diamond State Ins. Co., Ltd., 2002 U.S. Dist. LEXIS 

23225 (S.D.N.Y. 2002). 

• Parties’ “informal agreement” to litigate actions simultaneously warrants 

consolidation even though no explicit agreement to consolidate. 

Philadelphia Reinsur. Corp. v. Employers Ins. of Wausau, 2003 U.S. App. 

LEXIS 6198 (3rd Cir. 2003). 

• Question of whether disputes arising from multiple reinsurance contracts should 

be resolved in a single arbitration should be submitted to arbitrators, not a 

court. 

Arrowood Indem. Co. v. Harper Ins. Co., 2012 U.S. Dist. LEXIS 5840 

(W.D. N.C. Jan. 19, 2012). 


116664 (S.D.N.Y. October 5, 2011). 

Allstate Ins. Co. v. Liberty Mut. Ins. Co., 2011 U.S. Dist. LEXIS 53608 (D. 

Mass. May 19, 2011). Determination of whether to consolidate the two 

arbitrations is a procedural matter for the arbitration panel, not the 

court, to decide. 

Dorinco Reinsurance Co. v. Ace Am. Ins. Co., No. 07-12622, 2008 WL 

192270 (E.D. Mich. Jan. 23, 2008). 

Certain Underwriters at Lloyd’s London, et al. v. Westchester Fire Ins., 489 

F.3d 580 (3 rd Cir. 2007). 

Markel International Ins. Co. v. Westchester Fire Insurance Co., 442 F. 

Supp. 2d 200 (D.N.J. 2006). 

Allstate Ins. Co. v. Global Reinsurance Corp., 2006 WL 2289999 (S.D.N.Y. 

2006). 

Certain Underwriters at Lloyd’s London v. Cravens Dargan & Co., Pacific 

Coast, 197 Fed.Appx. 645 (9th Cir. 2006). 


E. Motion To Confirm, Vacate Or Modify Arbitration Award 

• Parties may not expand grounds for the vacatur or modification of an arbitration 

award as §§ 10 and 11 of the Federal Arbitration Act provide the exclusive 

grounds for vacating, modifying or correcting an arbitration award. 

Ario, Insurance Commissioner of the Commonwealth of Pennsylvania v. 

The Underwriting Members of Syndicate 53 at Lloyd’s for the 1998 Year 

of Account, 2010 U.S.App. LEXIS 17195 (3d Cir. Aug. 18, 2010). Absent a 

clear intent to apply the PUAA (Pennsylvania Uniform Arbitration Act) in 

the reinsurance agreement, the FAA vacatur standards apply. 

Hall Street Associates L.L.C. v. Mattel, Inc., 128 S. Ct. 1396 (2008), on 

remand at 9th Cir., resubmitted to district court at 531 F.3d 1019 (9th Cir. 

2008). 

• The venue provisions of the FAA are “permissive,” permitting a motion to 

confirm, vacate or modify an arbitration award to be brought either where the 

award was made or “in any district proper” under the FAA’s general venue 

statute. 

Cortez Byrd Chips, Inc. v. Bill Harbert Construction Co., 2000 U.S. LEXIS 

2194. Arbitration award confirmed. 

• Arbitration award confirmed. 

Aurum Asset Managers, LLC v. Banco Do Estado Do Rio Grande Do Sol, 

No. 08-mc-102 (E.D. Pa. June 26, 2012). Granting a motion to confirm 

an arbitration award in favor of the assignee of various reinsurance 

assets and against reinsurers. 

American Centennial Ins. Co. v. Global Int’l Reinsurance Co., Ltd., 2012 

U.S. Dist. LEXIS 94754 (S.D.N.Y. July 9, 2012). Granting a cross-petition 

to confirm an arbitration award based upon the reinsured’s failure to 

proffer a basis to vacate the panel’s rulings under the FAA or the New 

York Convention. 

ACE Prop. & Cas. Ins. Co. v. Global Reinsurance Corp. of America, U.S. 

Branch, 11 Civ. 6945 (S.D.N.Y. July 25, 2012), reprinted in Mealey’s 

Litigation Report: Reinsurance, Vol. 23, No. 7 (8/3/12). Granting the 

reinsured’s petition to confirm an arbitration award under the FAA. 


al., 2012 U.S. Dist. LEXIS 118233 (S.D.N.Y. August 21, 2012). Granting 


the reinsurer’s petition to confirm the arbitration award finding no 

basis to vacate under the New York Convention or the FAA. 

Axa Vericherung AG v. New Hampshire Ins. Co., et al., 12-cv-6009 

(S.D.N.Y. September 5, 2012). Granting the reinsurer’s (unopposed) 

petition to confirm the arbitration award under the United Nations 

Convention and the FAA. 

Century Indem. Co. v. AXA Belgium, 2012 U.S. Dist. LEXIS 136472 

(S.D.N.Y. September 24, 2012). Granting the petition to confirm an 

arbitration award wherein the parties had “overlapping liability to one 

another for certain insurance and reinsurance obligations.” 

ACE American Insurance Company, et al. v. Christiana Insurance LLC, 


Panel’s refusal to hear evidence as to prior course of conduct or apply a 

specific burden of proof standard did not warrant vacatur, as long as 

the panel was even arguably acting within its scope of authority. 

Century Indem. Co. v. Certain Underwriters at Lloyd’s London, et al., 2012 

U.S. Dist. LEXIS 4237 (S.D.N.Y. January 10, 2012). Granting crosspetitions 

to confirm the arbitration awards finding no basis “for vacating, 

modifying, or correcting any portion of the awards.” 

Century Indem. Co. v. Certain Underwriters at Lloyd’s London, 2011 U.S. 

Dist. LEXIS 55056 (S.D.N.Y. May 22, 2011). 

General Security National Ins. Co. v. Aequicap Program Administrators, 

785 F. Supp. 2d 411 (S.D.N.Y. April 29, 2011). 

Century Indem. Co. v. Clearwater Ins. Co., 2011 U.S. Dist. LEXIS 153293 

(S.D.N.Y. March 30, 2011). Court confirmed cedent’s award granting 

interest payments and declaratory relief because reinsurer failed to move 

to vacate, modify, or correct the award within the time period provided 

under the FAA. 

Century Indem. Co., et al. v. Tokio Re Corporation for and on behalf of 

Tokio Re Marine & Nichido Fire Insurance Company, No. 10-cv-02064 (D. 

D.C. March 18, 2011), reprinted in Mealey’s Litigation Report: 


ACE Prop. & Cas. Ins. Co. v. AXA Re, 2012 U.S .Dist. LEXIS 2360 (S.D.N.Y. 

January 9, 2011). 


Pacific Employers Ins. Co. v. Global Reinsurance Corp. of Am., 11 Civ. 

6301 (S.D.N.Y. December 9, 2011), reprinted in Mealey’s Litigation 


Century Indem. Co. v. Equitas Ins. Ltd, et al., 2011 U.S. Dist. LEXIS 112852 

(S.D.N.Y. September 27, 2011). Court granted unopposed petition for 

confirmation of arbitration award and struck the cross-petition to 

confirm the arbitration award on the grounds that it constituted 

“redundant, immaterial, and impertinent matter” under Fed. R. Civ. P. 

12(f). 

Harper Ins. Ltd. v. Century Indem. Co., No. 10 Civ. 7866, 2011 U.S. Dist. 

LEXIS 84112 (S.D.N.Y. July 27, 2011). Court confirms arbitration award 

despite panel’s issuance of remedy not specifically requested by party. 

OneBeacon America Ins. Co. v. Swiss Re. America Corp., 2010 U.S. Dist. 

LEXIS 136039 (D. Mass. Dec. 23, 2010). Court denied an insurer’s motion 

to vacate an arbitration award, holding that the arbitration panel was 

within its discretion to limit discovery regarding industry custom and 

practice regarding aggregation of asbestos, non-products claims, and, in 

so doing, did not deprive OneBeacon of a “full and fair hearing”. 

R&Q Reinsurance Co. v. American Motorist Ins. Co., 2010 U.S. Dist. LEXIS 

109349 (N.D. Ill. Oct. 14, 2010). Motion to vacate untimely (filed one day 

after the “three-month” deadline, see 9 U.S.C. § 12). Moreover, the fact 

that the panel did not provide a detailed explanation did not, by itself, 

disqualify the award from being a “reasoned award.” 

First Automotive Service Corporation, N.M., etc., et al., v. First Colonial 

Ins. Co., etc., et al., 2010 U.S. Dist. LEXIS 66974 (M.D. Fla. June 16, 2010). 

Award confirmed pursuant to 9 U.S.C. § 9. Request for Rule 11 sanction in 

the district court, however, denied insofar as the arguments supporting 

the unsuccessful motion to vacate were not frivolous. 

Clarendon America Ins. Co., et al. v. American Constantine Ins. Co., No. 

10-cv-02928 (S.D.N.Y. June 8, 2010). Court confirmed the arbitration 

panel’s nearly $7 million award and entered judgment against the 

reinsurer. 

Mutual Marine Office, Ins. v. Transfercom Ltd., No. 08-cv-10367, 2009 

U.S. Dist. LEXIS 31739 (S.D.N.Y. April 15, 2009), reprinted in Mealey’s 

Litigation Reports: Reinsurance, Vol. 20, No. 1 (5/01/09). 


(S.D.N.Y. 2009); 2009 U.S. Dist. LEXIS 37460 (March 23, 2009). Holding 


that there was no “manifest disregard of the law” since the Panel found 

that the claims at issue were covered by the original reinsurance 

contracts, and thus, the panel properly applied the “follow-thefortunes/follow-the-settlements” 

doctrine to the scope of the 

retrocession agreements. 

Global Reinsurance Corp – U.S. Branch v. Argonaut Ins. Co., No. 08 Civ. 

8482, 2009 U.S. Dist. LEXIS 47860 (S.D.N.Y. May 22, 2009). 

TIG Ins. Co. v. Global Int’l. Reinsurance Co., 08 Civ. 7338, 09 Civ. 1289, 

640 F. Supp. 2d 519 (S.D.N.Y. Aug. 7, 2009). Arbitrator’s decision entitled 

to “great deference,” and only a narrow set of circumstances warrant 

vacatur. 

Ario v. Cologne Reinsurance (Barbados), Ltd., 2009 U.S. Dist. LEXIS 

106133 (M.D. Pa. Nov. 13, 2009). Confirming the award and finding no 

evidence of “evident partiality” by the arbitrators. 

Certain Underwriters at Lloyd’s London v. Argonaut Ins. Co., No. 04-cv- 

05852, 2009 U.S. Dist. LEXIS 87827 (N.D. Ill. Sept. 24, 2009). Confirming 

the panel award, the court found that a prior judicial ruling on Rule 11 

sanctions does not hinder panel’s authority to award attorneys’ fees in 

reinsurance dispute. 

Trustmark Ins. Co. v. Claredon National Ins. Co., No. 09-cv-01673, 2009 

U.S. Dist. LEXIS 109414 (N.D. Ill. Nov. 20, 2009). Arbitration award 

confirmed with court declining to rule on potential set-off calculations as 

outside the scope of its authority under the FAA. 

Clearwater Ins. Co. et al., v. Various London Market Reinsurers, No. 08-cv- 

8695 (S.D.N.Y. Feb. 4, 2009). Court confirms arbitration award, and rules 

that the award shall be several among respondents and less amounts 

previously paid by certain respondents. 

Century Indemnity Co. v. Fencourt Reinsurance Co., Ltd., 640 F.Supp.2d 

626 (E.D. Pa. July 22, 2009). Motion to vacate single paragraph of 

arbitration award was denied as panel’s interpretation of ambiguous 

reinsurance language not “completely irrational.” 

Century Indemnity Co. v. Certain Underwriters at Lloyd’s London, 584 

F.3d 513 (3rd Cir. 2009). 

Nationwide Mutual Ins. Co. v. Westchester Fire Ins. Co., No. 08-00673, 

(W.D. Wis. Feb. 3, 2009). Court confirms final arbitration award after 


eceiving proof of diversity of citizenship. Court also seals the order to 

comply with the confidentiality order entered by the arbitration panel. 

Associated Int’l Ins. Co. v. Montenegro Re, Ltd., No. B203064, 2008 Cal. 

App. Unpub. LEXIS 10329 (Cal. App. Dec. 22, 2008). 

Commercial Union Ins. Co. v. Lines, No. 02-cv-0573, 2008 U.S. Dist. LEXIS 

42789 (S.D.N.Y. May 30, 2008), Aff’d by 2009 U.S. App. LEXIS 22270 (2nd 

Cir. October 9, 2009). Court confirmed arbitration awards between an 

insured, its captive insurer and reinsurer even though the cedent had redomesticated 

to avoid being liquidated. 

Wellpoint Health Networks v. John Hancock Life Ins. Co., 547 F. Supp. 2d 

899 (N.D. Ill. 2008). Court confirmed arbitration award rejecting objection 

based on replacement of party-appointed arbitrator. Aff’d by 576 F.3d 

643 (7th Cir. 2009), rehearing denied at 2009 U.S. App. LEXIS 21265 (7th 

Cir. Ill. Sept. 22, 2009). 

Employers Surplus Lines Ins. Co. v. Global Reinsurance Corp., No. 7-cv- 

254 2008 WL 337317 (S.D.N.Y. 2008). A Partial Final Award did not render 

the arbitrator functus officio so as to prevent him from reconsidering that 

finding and issuing a Final Award. 


(S.D.N.Y 2008). Motion to confirm a final award as clarified by the panel 

in a later order granted. 

Nationwide Mut. Ins. Co. v. Randall & Quilter Reinsurance Co., No. C2-07- 

120, 2008 WL 207854 (S.D. Ohio Jan. 24 2008). “Final and binding” 

language in a reinsurance contract constitutes consent to judicial 

confirmation of the arbitration award. 

HCC Aviation Ins. Group, Inc. v. Universal Loss Management Inc., No. 05- 

11118; 2007 WL 1879322 (5th Cir. June 28, 2007). Vacatur of award 

reversed since any doubts concerning the scope of arbitrable issues 

should be resolved in favor of arbitration. 

Sphere Drake Ins. Ltd. v. Lincoln Nat’l Life Ins. Co., 2006 WL 2699270 

(N.D. Ill. 2006). Arbitration Panel’s decision to apply collateral estoppel 

to prevent an insurer from re-litigating claims is not outside the 

parameters of due process. 

Koken v. LDG Re Corp., 2006 WL 3857489 (E.D. Pa. 2006). 

HSN Capital LLC [UAS] v. Productora Y Comercializador De television, S.A. 

De C.V. [Mexico], 2006 U.S. Dist. LEXIS 45289 (M.D. Fla. 2006). Fact that 


arbitrator and counsel for prevailing party had limited contact at 

professional functions in the past was not sufficient to merit vacatur of 

the arbitration award. (08/03/06). 

Mutual Marine Office, Inc. v. Alea Europe Ltd. (f/k/a Rhine Reinsurance 

Company Ltd.), No. 06 Civ. 0872 (S.D.N.Y. March 14, 2006), reprinted in 


Burlington Ins. Co. v. Trygg-Hansa Ins. Co., AB, No. 1:99CV00334, 2006 

WL 1367418 (M.D. N.C. May 16, 2006). Arbitration award construed as 

setoff of sums owed by cedents to reinsurer against sums reinsurer owed 

cedents pursuant to previous award. 

Industrial Risk Insurers v. Hartford Steam Boiler Inspection and Insurance 

Co., No. CV030823599, 2006 WL 1000061 (Conn. Super. Ct. Mar. 27, 

2006). 

Puerto Rico Telephone Co. v. U.S. Phone Manufacturing Corp., 427 F.3d 

21 (1st Cir. 2005). Motion to vacate not in order when party’s objections 

to the arbitration are essentially disagreements with arbitrator 

conclusions. Parties must be explicit if they intend to subject an 

arbitration award to different standards of review than what was 

provided in the Federal Arbitration Act. 

Continental Casualty Co. v. Scandinavian Reinsurance Co., 2005 WL 

2171187 (N.D. Ill. August 30, 2005). Court upholds arbitration award not 

awarding monetary damages because it was issued as a declaratory 

judgment. 

National Casualty Co. v. First State Ins. Group, 2005 U.S. App. LEXIS 26273 

(1st Cir. 2005). Arbitration award upheld despite cedent’s refusal to 

comply with panel’s discovery order. 

Industrial Risk Insurers v. Hartford Steam Boiler Inspection and Insurance 

Co., 273 Conn. 86 (2005). 

United States Life Ins. Co. v. Superior National Ins. Co., No. CV-07-00850- 

VBF (C.D. Cal. 2007), aff’d at 591 F.3d 1167 (9th Cir. 2010) (“Phase II” – 

addressing improper claims handling) 

United States Life Ins. Co. v. Superior National Ins. Co., No. CV 05-678-GLT 

(C.D. Cal. 2005), reprinted in Mealey’s Litigation Report: Reinsurance, 

Vol. 16, No. 2 (05/26/05), aff’d, 160 Fed.Appx. 559 (9th Cir. 2005) (“Phase 

I” – addressing contract reformation and rescission). 


Sompo Japan Insurance, Inc. v. Fortress Re, Inc., No. 1:03CV1208 

(M.D.N.C. 2004). 

Nationwide Mutual Insurance Co., v. the Home Insurance Company, No. 

C2-03933 (S.D. Ohio 2004), reprinted in Mealey’s Litigation Report: 

Reinsurance, Vol. 15, No. 11 (10/07/04), aff’d, 429 F.3d 640 (6th Cir. 

2005). 

Fidelity Federal Bank v. Durga Ma Corp., Nos. 02-56381, 56548 (9th Cir. 

2004). Party with constructive knowledge of arbitrator’s partiality waives 

right to challenge such partiality if it fails to object to the arbitrator’s 

appointment until after the award is issued. 

LDG Re v. Reliance Ins. Co., No. 04-1419 (E.D. Pa. 2004), reprinted in 


Sphere Drake Ins. Co. v. All American Life Ins. Co., 2004 WL 442640 (N.D. 

Ill. 2004). Factual or legal errors by arbitrators do not authorize courts to 

annul arbitration awards. Arbitrators may rely on position papers as 

judicial admissions. 

Trustmark Ins. Co. v. John Hancock Life Ins. Co., 2004 U.S. Dist. LEXIS 

10922 (N.D. Ill. 2004). 

RGA Reinsurance Co. v. Ulico Cas. Co., 355 F.3d 1136 (8th Cir. 2004). 

Colmar Ltd. v. FreemantleMedia North America, 344 Ill. App. 3d 977 (1st 

Dist. 2003). 

UnionAmerica Ins. Co. v. Allstate Ins. Co., No. 03 C 7400 (N.D. Ill. 2004), 

2004 U.S. Dist. LEXIS 458. Party cannot seek to modify previous 

arbitration award or remedy its alleged defects once deadline for appeal 

has passed, but party may pursue arbitration of disputes as to its 

application to new situations which original arbitrators did not 

contemplate. 

Houston General Insurance Co. v. Certain Underwriters at Lloyd’s London, 

2003 U.S. Dist. LEXIS 19516 (S.D.N.Y. 2003). 

Certain Underwriters at Lloyd’s, London v. BCS Ins. Co., 239 F. Supp. 2d 

812 (N.D. Ill. 2003). 

Banco de Seguros Del Estado v. Mutual Marine Offices, Inc., 2003 U.S. 


Crye-Leike, Inc. v. Darren Thomas, 196 F.Supp.2d 680 (W.D.Tenn. 2002). 


Koken v. Legion Ins. Co., No. 183 M.D. 2002 (Pa. Comm., Middle Dist.), 

reprinted in, Mealey’s Litigation Report, Reinsurance, Vol. 13, No. 12 

(10/17/02). 

Banco de Seguros Del Estados v. Mutual Marine Offices, Inc., 2002 U.S. 

Dist. LEXIS 14472 (S.D.N.Y. 2002) motion for reconsideration denied, 2002 

U.S. Dist. LEXIS 16980 (S.D.N.Y. 2002). Interim arbitration order requiring 

a party to post pre-judgment security is reviewable under the Inter- 

American Convention. Judge confirmed interim award ordering reinsurer 

to post more than $700,000 in prejudgment security. 

Bowen v. Amoco Pipeline Co., 254 F.3d 925 (10th Cir. 2001). 

Tongyvan [USA] International Trading Group – and – Uni-Clan, Ltd., Folio 

No. 1143 of 2000 (Eng. Comm., 2001). 

New England Reinsurance Corp. v. Dunav Reinsurance Co., No. 01-1232 

(D.Mass. 2001), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 

12, No. 18 (1/24/02). 

Southwire Co. NSA, Ltd. et al. v. American Arbitration Association, et al., 

248 Ga.App. 226, 545 S.E.2d 681 (Ga. App. 4th Div. 2001). 

In the Matter of the Arbitration Between Cragwood Managers, L.L.C. & 

Reliance Ins. Co., 132 F.Supp.2d 285 (S.D.N.Y. 2001). 

Federated Rural Electric Ins. Exchange v. Nationwide Mut. Ins. Co., 134 

F.Supp.2d 923 (S.D. Ohio 2001). Reinsurer barred from challenging an 

arbitration award issued in favor of cedent because its motion to vacate 

or modify was not filed within three months after the award was filed 

and court found that arbitration award was not in manifest disregard of 

the law where the arbitration panel relied on trial court’s unpublished 

opinion for support. 

In re Liquidation of Inter-American Ins. Co. of Illinois, 329 Ill. App. 3d 606 

(2002). 

American Nat’l Ins. Co. v. Everest Reinsurance Co., 180 F.Supp.2d 884 

(S.D. Texas 2001). 

Industrial Risk Insurers v. Hartford Steam Boiler Inspection and Ins. Co., 

258 Conn. 101, 779 A.2d 737 (Conn. 2001). 

First State Ins. Co. v. Banco De Seguros Del Estado, 254 F.3d 354 (1st Cir. 

2001). Court confirmed award in favor of cedent stating that reinsurer 

clearly failed to meet its burden of establishing lack of proper notice 


under Article V(1)(b) of the Convention of Recognition & Enforcement of 

Foreign Arbitral Awards. 

Investors Equity Life Ins. Co. v. ADM Investor Services, Inc., 1 Fed. Appx. 

709 (9th Cir. 2001). 


S.A., 2000 WL 520638 (S.D.N.Y. 2000), reh’g denied, 2000 WL 702996 

(S.D.N.Y. May 30, 2000). 

British Ins. Co. of Cayman v. Water Street Ins. Co., 93 F.Supp.2d 506 

(S.D.N.Y. 2000). 

Nationwide Mut. Ins. Co. v. The Home Ins. Co., 90 F.Supp.2d 893 (S.D. 

Ohio 2000). 

Employers Ins. of Wausau v. Banco de Seguros Del Estado, 199 F.3d 937 

(7th Cir. 1999). 

In Re: Global Reinsurance Corp. v. Yasuda Fire and Marine Ins. Co., 1999 

U.S.Dist. LEXIS 11480 (S.D.N.Y. 1999). 

Industrial Risk Insurers v. Hartford Steam Boiler Inspection and Ins. Co., 

1999 Conn.Super. LEXIS 1240 (Conn. Super. Ct. Apr. 29, 1999), 258 Conn. 

101, 779 A.2d 737 (Conn. 2001). 

St. Paul Fire and Marine Ins. Co. v. Employers Reinsurance Corp., No. 94 

Civ. 9283 [SS], (S.D.N.Y.), reprinted in Mealey’s Litigation Report: 


North River Ins. Co. v. Philadelphia Reinsurance Corp., 63 F.3d 160 (2nd 

Cir. 1995), cert. denied, 516 U.S. 1184, 116 S.Ct. 1289 (1996), on remand, 

1998 WL 78177 (S.D.N.Y 1998). 

• Arbitration award confirmed in part. 

Nationwide Mutual Ins. Co. v. First State Ins. Co., 213 F.Supp.2d 10 

(D.Mass. 2002). 

D&E Construction Co., Inc. v. Robert J. Denley Co., Inc., 38 S.W.3d 513 

(Tenn. 2001). 

Clarendon Nat’l Ins. Co. v. TIG Reinsurance Co., 183 F.R.D. 112 (S.D.N.Y. 

1998). 


• Arbitration award vacated in part. 

Amerisure Mut. Ins. Co. v. Global Reinsurance Corp. of America, f/k/a 

Gerling Global Reinsurance Corp. of America, No. 09-0820, 927 N.E.2d 

740 (Ill. App. 2010). Portion of arbitration award vacated for gross error 

of law in awarding attorney fees under 215 ILCS 5/155 (Illinois Insurance 

Code) as the authority to award such fees is explicitly and exclusively 

vested within the circuit court. Reh’g denied at 2010 Ill. App. LEXIS 461 

(1 st Dist. Apr. 15, 2010); appeal denied at 237 Ill. 2d 551 (2010). 

Koken v. Cologne Reinsurance (Barbados) Ltd., 2006 WL 2460902 (M.D. 

Pa. 2006). Portion of arbitration award that allowed reinsurer to enforce 

a stop-loss agreement with a now-insolvent insurer is void as it violates 

applicable insurance law. 

• Arbitration award vacated. 

PMA Capital Ins. Co. v. Platinum Underwriters Bermuda, Ltd., No. 09-mc- 

0084, 2009 U.S. Dist. LEXIS 85046 (E.D. Pa. Sept. 15, 2009). Arbitration 

award vacated as completely irrational for eliminating key provisions of 

the reinsurance agreement and awarding relief not sought, aff’d by 2010 

U.S. App. LEXIS 23222 (3d Cir. Nov. 8, 2010). 

Certain Interested Underwriters at Lloyd’s v. Pinehurst Accident 

Reinsurance Group, No. 08-2950, 2009 U.S. Dist. LEXIS 47443 (D.N.J. Jun. 

4, 2009). After vacating a previous confirmation order of an arbitration 

award and remanding back to the arbitrator for clarification of the award, 

Court granted motion for reconsideration and certified specific questions 

to the arbitration panel to clear up any ambiguities in the award. 

Scandinavian Reinsurance Co. v. St. Paul Fire & Marine Inc. Co., No. 09 

Civ. 9531, 2010 U.S. Dist. LEXIS 15952 (S.D.N.Y. Feb. 23, 2010), reprinted 

in Mealey’s Litigation Reports: Reinsurance, Vol. 20, No. 21 (3/5/10). 

Evident partiality existed sufficient to vacate an arbitration award based 

on the arbitrators’ failure to disclose their involvement in prior 

arbitrations involving similar issues and related witnesses. 

The Burlington Insurance Co. v. Trygg-hansa Ins. Co. AB, 261 Fed. Appx. 

631 (4th Cir. Jan. 17, 2008). Vacating order granting motion to confirm 

an arbitration award because the award remained ambiguous despite 

previous attempts at clarification. 

Olsen v. U.S. ex rel. U.S. Dept. of Agric., 546 F. Supp. 2d 1122 (E.D. Wash. 

2008), aff’d by 334 Fed. Appx. 834 (9th Cir. Wash. 2009). Arbitration 

award was vacated for lack of jurisdiction when government reinsurer 


was neither a party to the contract containing the arbitration provision, 

nor in privity with the insured. 

ACandS, Inc. v. Travelers Insurance Co., 435 F.3d 252 (3d Cir. 2006). 

Arbitration award vacated as violating automatic stay provision of 

Bankruptcy Code where party filed for bankruptcy after arbitration panel 

was constituted, but before award issued. 

HCC Aviation Insurance Group v. Employers Reinsurance Co., 2005 WL 

2233594 (N.D. Tex. September 13, 2005). Arbitrators exceeded their 

powers in ordering a reinsurer to indemnify a claims handling facility 

pursuant to the “law of the case” doctrine, as the issue had been 

resolved in an earlier stage of the same litigation. 


2nd Dist., reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 16, 

No. 18 (01/19/06). 


Civ. 4363 [SAS], (S.D.N.Y. 2003), 2003 LEXIS 21850, aff’d 2005 U.S. App. 

LEXIS 5157 (2nd Cir. 2005). An arbitral tribunal that was improperly 

composed has no power to bind the parties; any assertion of such power 

exceeds its mandate. 

Certain Underwriters at Lloyd’s London v. Argonaut Ins. Co., 264 F. Supp. 

2d 926 (N.D.Cal. 2003). Arbitration panel’s award of sanctions against 

reinsurers had no basis in the reinsurance treaty or the Federal 

Arbitration Act. 

Schmitz v. Zilveti, 20 F.3d 1043 (9th Cir. 1994). Arbitrator was “evidently 

partial.” 

• Court could not confirm foreign arbitration award due to lack of subject matter 

jurisdiction. 

Czarina, LLC v. W.F. Poe Syndicate, 358 F.3d 1286 (11th Cir. 2004). 

• Motion denied based on lack of subject matter jurisdiction. 

Aurum Asset Managers LLC, et al. v. Banco Do Estado Do Rio Grande Do 

Sul, et al., 2010 U.S. Dist. LEXIS 109577 (E.D. Pa. Oct. 13, 2010). Court 

vacated order confirming arbitration award for want of subject matter 

jurisdiction because respondent is a foreign institution entitled to 

immunity against suit, which it did not waive. Aff’d at 441 Fed. Appx. 822, 

2011 U.S. App. LEXIS 16950 (3d Cir. 2011) finding that the district court 


did not err in applying a de novo standard. The clear usurpation standard 

for vacating an order affirming an arbitration award only applied in 

circumstances in which the parties had their day in court on the issue of 

jurisdiction, which the parties had not yet had. 

American Bankers Ins. Co. of Florida, et al. v. National Casualty Co., No. 

2:08-cv-13522, 2009 U.S.Dist. LEXIS 8621 (E.D. Mich. Feb. 3, 2009). 

Petition to confirm arbitration award dismissed for failure to meet 

threshold diversity jurisdiction requirements. While 9 U.S.C.A. § 9 permits 

a district court to confirm an arbitration award, it does not provide an 

independent basis for subject matter jurisdiction. 

Gerling Global Reinsurance Corp. v. Sompo Japan Insurance Co., 348 

F.Supp.2d 102 (S.D.N.Y. 2004). Where complaint based entirely on judicial 

decision and not on foreign arbitration award, there is no basis for 

federal subject matter jurisdiction. 

• Motion to vacate untimely 

F. Posting Of Security 

R&Q Reinsurance Co. v. American Motorist Ins. Co., 2010 U.S. Dist. LEXIS 

109349 (N.D. Ill. Oct. 14, 2010). Motion to vacate untimely insofar as it 

was filed and served one day after the “three-month” deadline. See 9 

U.S.C. § 12. Attempt to interpret “three months” as “ninety days” 

rejected. 

• Posting of security not required as a pre-condition to arbitration hearing. 

Yukos Oil Co. – and – Dardana Ltd., No. A3/2001/1029 (Eng. App.), 


(6/20/02). English Court of Appeal set aside a portion of an order that 

required $2.5 million in security. 

In the matter of the Arbitration Between: Certain Underwrites at Lloyd’s, 

London v. The Travelers Ins. Co., No. 395CV02420 (D.Conn.), reprinted in 


Recyclers Ins. Group v. Ins. Co. of North Am., 1992 U.S.Dist. LEXIS 8731 

(E.D.Pa. 1992). 

• Posting of security can be required pending final arbitration. 

Sphere Drake Insurance v. All American Life Insurance, No. 99 C 4573 

(N.D.Ill. 2003), reprinted in Mealey’s Litigation Reports: Reinsurance, 

Vol. 14, No. 12 (10/16/03). The court has discretion to fashion suitable 


security, and under Illinois law, may require a party to maintain security 

even if only a substantially reduced possibility of payment for final 

judgment exists. 

International Ins. Co. v. Caja Nacional de Ahorro y Seguro, 293 F.3d 392 

(7th Cir. 2002). 

British Ins. Co. of Cayman v. Water Street Ins. Co., Ltd., 93 F.Supp.2d 506 

(S.D.N.Y. 2000). 

The Home Ins. Co. v. El Banco De Seguros Del Estado, No. 98-6022 

(S.D.N.Y.), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 9, 

No. 22 (3/25/99). 

Meadows Indemnity Co. v. Arkwright Mut. Ins. Co., 1996 WL 557513 

(E.D.Pa. 1996). 

Yasuda Fire & Marine Ins. Co. of Europe, Ltd. v. Continental Cas., 37 F.3d 

345 (7th Cir. 1994). 

• Posting of security required pending conclusion of arbitration after reinsurer 

failed to vacate award within 3-month statute of limitations. 

Employers Ins. of Wausau v. Grand Union Ins. Co., Ltd., 1991 U.S. Dist. 

LEXIS 12157 (S.D.Fla. 1991). 

• Reinsurer not required to post letter of credit after reinsurer paid arbitral award. 

Employers Ins. of Wausau v. El Banco De Seguros Del Estado, 357 F.3d 

666 (7th Cir. 2004), vacating in part, No. 98-C-521-C, 2001 WL 1882467 

(W.D.Wis. 2001). 

• Arbitration panel to decide whether posting of security required. 

Banco de Seguros Del Estados v. Mutual Marine Offices, Inc., 2002 U.S. 

Dist. LEXIS 14472 (S.D.N.Y. 2002) recons. denied, 2002 U.S. Dist. LEXIS 

16980 (S.D.N.Y. 2002); aff’d, No. 02 Civ. 467 [SAS] (2d Cir. 2003), 


(10/02/03). Arbitrators had authority to order a reinsurer to post 

prejudgment security where reinsurer was not immune under the 

Foreign Sovereign Immunity Act. 

TIG Ins. Co. v. Water Street Ins. Co., 1999 U.S. Dist. LEXIS 22938 (E.D.N.Y.). 


Continental Cas. Co. v. Certain Underwriters of Lloyd’s, Nos. C-92-4094 

and C-98-3145 (N.D.Cal.), reprinted in Mealey’s Litigation Report: 


• Foreign reinsurers are not immune from having to post security. 

Banco de Seguros del Estado v. Mt. McKinley Ins. Co., No. 02 Civ. 3949 

(S.D.N.Y.), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 13, 

No. 12 (10/17/02). Holding that a foreign reinsurer is not immune from 

having to post securities and refusing to vacate a pre-hearing security 

order. 

In re Cox Dedicated Corporate Member Ltd. Subscription, 2006 WL 

2640625 (Tex. App. 1st Dist. 2006). Where case settled in post-trial 

mediation, unauthorized foreign insurers required to deposit cash or 

other specific bonds to secure any potential judgment or have their 

pleadings stricken. 

• A rehabilitator of an insurer must repay sums improperly withdrawn from trust 

established by the insurer’s former reinsurer. 

Commercial Risk Re-insurance Co. v. Superintendent of Ins. Of the State 

of New York, 2003 N.Y. Slip Op. 19566 (N.Y. Sup., App. Div., 1st Dept. 

2003), 2003 N.Y. App. Div. LEXIS 13320, leave to appeal denied, No. 191 

(N.Y. App. 2004), reprinted in Mealey’s Litigation Report: Reinsurance, 

Vol. 15, No. 3 (6/10/04). 

• Security required prior to unauthorized reinsurer defending a court action or 

proceeding. 

Arrowood Surplus Lines Ins. Co., et al. v. Gettysburg Nat’l Indem. [SAC] 

Ltd., No. 09-cv-00972, 2010 U.S. Dist. LEXIS 45669 (D. Conn. May 7, 2010). 

Pre-pleading security of reinsurer, as “unauthorized insurer,” must be 

posted, pursuant to Conn. Gen. Stat. § 38a-27(a), for “an amount . . . . 

sufficient to secure the payment of any final judgment which may be 

rendered in the action or proceeding.” 

Hartford Accident and Indem. Co. v. Ace Am. Reinsurance Co., 103 

Conn.App. 319, 930 A.2d 701 (2007). While unauthorized reinsurer was 

required to post security pursuant to Connecticut general statute §38a- 

27, the amount of the security was to be determined by an evidentiary 

hearing. 


• Order denying request for pre-pleading security in litigation is an immediately 

appealable final judgment. 

Hartford Accident and Indem. Co. v. Ace Am. Reinsurance Co., 901 A.2d 

1164 (Conn. 2006). 

• Foreign reinsurer must post security pursuant to applicable state law. 

AIU Ins. Co. v. Certain Underwriters at Lloyd’s, London, No. 602924/07 

(N.Y. Sup. Ct. May 5, 2008), reprinted in Mealey’s Litigation Report: 

Reinsurance, Vol. 19, No. 2 (5/16/2008). Court required foreign reinsurer 

to post pre-hearing security pursuant to New York Insurance Law § 

1213(c)(1) despite its allegations that the reinsurance was placed through 

a domestic broker. 

Sec. Ins. Co. of Hartford v. Universal Reinsurance Co. Ltd., 2007 WL 

214606 (D. Conn. 2007). 

• General agent not required to post security. 

General Fidelity Insurance Co. v. WFT Inc. No. 3:11-0448, 2012 U.S. Dist. 

LEXIS 148726 (N.D. Tx. October 15, 2012). Judge refused to order a 

managing general agent to post security on a pending $2.5M arbitration 

for allegedly past-due commissions, stating that the reinsurer cannot 

show that it was likely to succeed because it was too early to present 

and analyze the claim. Judge also denied the reinsurer’s request for 

security on a $71K interim arbitration award finding no reason to 

believe that the managing general agent will not pay the award. 

• Judgment awarded against retrocessionaire requiring it to post security for the 

retrocessionaire’s portion of the retrocedent’s reserves for losses 

North Star Reins. Corp. v. Harel Ins. Co, No. 08-cv-02380 (S.D.N.Y. Sept. 5, 

2008). 

X. Discovery of Reinsurance Information 

Recently, plaintiff insureds in declaratory litigation with their carriers, particularly in 

environmental, toxic tort and long tail claim cases, seek to discover communication between 

defendant cedents and reinsurers. The defendants continue to challenge these efforts with 

mixed results. 


• Reinsurance agreements and insurer/reinsurer communications were 

discoverable by insureds in underlying action. 

Fireman’s Fund Ins. Co., et al. v. Great Am. Ins. Co. of N.Y., et al., 2012 

U.S. Dist. LEXIS 92701 (S.D.N.Y. July 3, 2012). Reinsurance 

communications discoverable and not protected by the common 

interest privilege. 

US Bank Nat'l Ass'n v. PHL Variable Ins. Co., 2012 U.S. Dist. LEXIS 158448 

(S.D.N.Y. Nov. 5, 2012). Judge refused to quash subpoena served on 

two reinsurers for discovery of life insurance reinsurance documents, 

but required that the bank serving the subpoenas pay the reinsurers’ 

expenses pertaining to the document search and retrieval. Judge stated 

that the reinsurers had standing to challenge the subpoenas, yet 

because of the broad definition of relevance in the context of discovery, 

the bank’s request was relevant. 

Nat’l Union Fire Ins. Co. of Pittsburg, PA. v. Mead Johnson & Co., et al., 

2011 U.S. Dist. LEXIS 122149 (S.D. Ind. October 21, 2011). Reinsurance 

communications discoverable. 

Suffolk Federal Credit Union v. Cumis Ins. Society, Inc., 2010 U.S. Dist. 

LEXIS 111054 (E.D. N.Y. Oct. 19, 2010). Reinsurance information 

discoverable. 

Sunnen Products Co. v. Travelers Cas. and Surety Co., No. 09-cv-00889, 

2010 U.S. Dist LEXIS 16953 (E.D. Mo. February 25, 2010). Reinsurance 

agreements are discoverable. 

Hartman v. American Red Cross, No. 09-cv-01302, 2010 U.S. Dist. LEXIS 

46126 (C.D. Ill. May 11, 2010). Finding defendant’s reinsurance 

agreement to be discoverable despite defendant’s contention that the 

alleged liability would never implicate the reinsurance. 

Regence Group, et al. v. TIG Specialty Ins. Group, No. 07-1337-HA, 2010 

U.S. Dist. LEXIS 9840 (D. Or. February 4, 2010). Motion for 

reconsideration denied, upholding discoverability of reinsurance policies, 

reinsurer communication, documents exchanged with reinsurer in 

arbitration, and documents relating to the payments received from 

reinsurers. 

Cameron Parish Sch. Bd. v. RSUI Indem. Co., No. 06-cv-01970, 2008 U.S. 

Dist. LEXIS 56069 (W.D. La. July 23, 2008). While reinsurance information 

is not relevant to insured’s breach of contract claim, the information is 

discoverable insofar as it may be relevant to bad faith allegations. 


Neles-Jamesbury, Inc. v. Liberty Mutual Ins. Co., 23 Mass. L. Rptr. 313, 

2007 WL 4099341 (Mass. Super. 2007). Reinsurance agreements 

discoverable. 

Machinery Movers, Riggers and Machinery Erectors, Local 136 Defined 

Contribution Pension Plan v. Fidelity and Deposit Company of Mary, et 

al., 2007 WL 3120029 (N.D. Ill. 2007). Reinsurance communications and 

agreements are discoverable. 

Heights at Issaquah Ridge Owners Assoc., et al v. Steadfast Ins. Co., et al., 

2007 WL 4410260 (W.D. Wa. 2007). Insured required to produce copies 

of its reinsurance policies, but not reinsurance communications. As to the 

production of reinsurance policies the district court stated, “[t]he rule is 

absolute, and does not require a showing of relevance.” 

Mid-Continent Casualty Company v. Eland Energy, Inc., 3: 7 MD 78, 2007 

U.S. Dist. LEXIS 21671 (D. Conn. Mar. 26, 2007). Insurer required to 

produce communications with reinsurer regarding the insurer’s ordinary 

claims handling, but not communications relating to declaratory 

judgment. 

Untied States Fire Insurance Co., et al. v. Bunge North America Inc., et al., 

No. 05-2192-JWL-DJW (D. Kan. May 25, 2007), aff’d 2007 WL 2103353 (D. 

Kan. Jul 23, 2007). Insurers ordered to produce relevant reinsurance and 

loss reserve information in coverage action regarding groundwater 

contamination. 

Sotelo v. Old Republic Life Insurance Co., et al., 2006 U.S. Dist. LEXIS 

68387 (N.D. Cal. 2006). Reinsurer must produce documents related to its 

reinsurance of a policy issued by cedent, as insurer intended to rescind 

the underlying policy on the basis of misrepresentation. 

Executive Risk Indemnity Inc. v. CIGNA Corp., 2006 Phila. Ct. Com. Pl. 

LEXIS 328 (Pa. Comm. Pls. Aug. 18, 2006). Excess insurer required to 

produce reinsurance coverage information, but not reserve information 

related to underlying litigation. 

Koken v. American Patriot Ins. Agency, Inc., No. 05C 1049, 2006 WL 

1749689 (N.D. Ill. June 20, 2006). Liquidator of insurance company 

ordered to produce all exhibits relating to reinsurance treaty, even those 

relating to other insurance programs. 

Continental Insurance Co. v. Garlock Sealing Technologies LLC and Coltec 

Industries Inc., No. 116789/04 (N.Y. Sup. March 23, 2006), reprinted in 



Cedent’s documents relating to reserves and reinsurance information are 

discoverable for purposes of establishing that policyholder’s claims were 

denied because of insufficient reserves. 

Bondex International Inc., et al. v. Hartford Accident and Indemnity Co., 

No. 1:03CV1322, 2006 WL 355289 (N.D. Ohio Feb. 15, 2006). Discovery 

of reinsurance related to policies issued to insureds and insurer’s 

communications with reinsurers related to their respective policies 

allowed, but reserve information not discoverable because not relevant 

and is work product. 

GAF Corp. v. Reliance Ins. Co., No. 00-6289 [DMC] (D.N.J. 2005), reprinted 


Motion to compel production of reinsurance and reserve information 

from insurer granted. 

PECO Energy Co. v. Insurance Co. of North America, 2004 Pa. Super. LEXIS 

1706 (Pa. Super. 2004). Discovery of reinsurance information and other 

claims files allowed but reserve information not discoverable. 

United Technologies Corp. v. American Home Assurance Co., No. 2:92 CV 

267 [JBA] (D.Conn.), reprinted in Mealey’s Litigation Report: Reinsurance, 

Vol. 12, No. 5 (7/5/01). Limited discovery of reinsurers allowed on offset 

defense. 

Silicon Valley Bank v. New Hampshire Ins. Co., et al., No. CV 00-696-RSWL 

(C.D.Cal. 2001), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 

12, No. 11 (10/4/01). 

Massachusetts Bay Ins. Co. v. Stamm, 700 N.Y.S.2d 707 (App. Div. 2000). 

Disclosure of documents to reinsurers constitutes waiver of attorneyclient 

privilege. 

Front Royal Ins. Co. v. Gold Players, Inc., 187 F.R.D. 252 (W.D. Va. 1999). 

Young v. Liberty Mut. Ins. Co., 1999 WL 301688 (D.Conn. 1999). 

Union Pacific Recources Co. v. Continental Ins. Co., No. 249-23-98, (Texas 

Dist. Johnson Co.), reprinted in Mealey’s Litigation Report: Reinsurance, 

Vol. 9, No. 10 (9/24/98). 

Northern Indiana Public Service Co. v. Certain London Market Insurers, 

No. 71-D05-9509-CP-00850 (Ind.Super. St. Joseph Co.), reprinted in 



Catherine McLean v. Continental Cas. Co., et al., 1996 WL 684209 

(S.D.N.Y. 1996). 

Raclaur, Inc. v. Allianz Ins. Group, No. L-12078-95 (N.J.Super.Ct. 1996). 

Lipton v. Superior Court (Lawyers’ Mut. Ins. Co.), 48 Cal.App.4th 1599, 56 

Cal.Rptr.2d 341 (1996). 

Temple-Inland Inc. v. Highlands Ins. Co., No. 28,449-95-03 (Texas Dist.), 


(4/25/96). 

Great Lakes Dredge & Dock Co. v. Commercial Union Ins. Co., 159 F.R.D. 

502 (N.D.Ill. 1995), aff’d in part, vacated in part and remanded by, 260 

F.3d 789 (7th Cir. Ill. 2001), on remand, 2002 WL 31133095 (N.D. Ill. 

2002). 

Missouri Pacific Railroad Co. v. Aetna Cas. & Sur. Co., 1995 WL 861147 

(N.D.Tex.). 

Morton International Inc. v. Liberty Mut. Ins. Co., 1995 WL 868455 

(W.Va.Cir.Ct. 1995). 

Owens-Corning Fiberglas Corp. v. American Centennial Ins. Co., 74 Ohio 

Misc.2d 239, 660 N.E.2d 807 (Ohio C.P. 1995). 

North River Ins. Co. v. Columbia Cas. Co., 1995 WL 5792 (S.D.N.Y. 1995). 

American Cas. Co. of Reading et al. v. General Metals of Tacoma Inc. et 

al., No. C92-5192B (W.D. Wash.). 

Allendale Mut. Ins. Co. v. Bull Data Systems Inc., et al., 152 F.R.D. 132 

(N.D.Ill. 1993), aff’d in part and rev’d in part, GE v. Deutz AG, 270 F.3d 

144 (3rd Cir. Pa. 2001). 

Hoechst Celanese Corp. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 

1993 Del. LEXIS 420 (Del.Super.Ct.). 

American Colloid Co. v. Old Republic Ins. Co., 1993 WL 222678 (N.D.Ill. 

1993). 

North American Philips Corp. v. Aetna Cas. and Sur. Co., 1993 WL 213717 

(Conn.Super. 1993). 

Biddle Sawyer Corp. v. Fireman’s Fund Ins. Co., et al., No. AM-1368-91T5F 

(N.J.Super.Ct., App.Div. 1992). 


Snyder General Corp. v. The Continental Ins. Co., et al., No. CA3-90-2396- 

P (N.D.Tex. 1991). 

Nat’l Union Fire Ins. Co. of Pittsburgh. Pa. v. Continental Illinois Corp., 116 

F.R.D. 78, 661 F. Supp. 964 (N.D. Ill. 1987). 

• Insurer/reinsurer communications were not discoverable by insureds in 

underlying action. 

United States Fire Insurance Co. v. The City of Warren, No. 10-13128, 

2012 U.S. Dist. LEXIS 58353 (E.D. Mich. April 26, 2012). Reserve 

information and communications between insurer and reinsurer were 

irrelevant and not discoverable. 

Isilon Systems Inc. v. Twin City Fire Insurance Co., No. C10-1392, (W.D. 

Wash. Feb. 15, 2012). While reinsurance policies are discoverable under 

Fed. R. Civ. P. 26(a), the rule does not extend to communications 

between an insurer and its reinsurer unless the insured adequately 

demonstrates their relevance to a bad faith claim. 

• Reinsurance agreements were discoverable by third-party claims administrator. 

Clarendon National Ins. Co. v. Atlantic Risk Management, Inc., Nos. 

5303N, 5303NA, 5303NB, 5303NC and 106324/06, 2009 

N.Y.App.Div.LEXIS 1192 (N.Y. App. 2009). 

• Insurer/cedent reserve information discoverable by reinsurer where cedent is 

accused of bad faith for not having adequate and reasonable reserve 

procedures in place. 

Granite State Insurance Company v. Clearwater Insurance Company, 


• Assignee of reinsured permitted to discover “other reinsured” information from 

reinsurer relating to similarly-situated risks. 

Scottsdale Ins. Co. v. American Re-Insurance Co., 2007 WL 405870 (D. 

Neb., February 2, 2007). 

• Inter-insurer discovery of reinsurance information allowed in order to explore 

the propriety of settlement funding. 

National Union Fire Ins. Co. of Pittsburgh, PA v. Continental Cas. Co., No. 

07-cv-11073, 2009 U.S. Dist. LEXIS 66365 (S.D.N.Y. July 24, 2009). 


• Reinsurer entitled to underwriting guidelines, guides and/or manuals for the 

placement of reinsurance through an intermediary from assignee of reinsured. 

Scottsdale Ins. Co. v. Am. Re-Insurance Co., 2008 U.S. Dist. LEXIS 36797 

(D. Neb., May 6, 2008). In the face of the reinsurer’s claim that the 

intermediary improperly placed reinsurance coverage, discovery of 

underwriting guidelines, guides and/or manuals for the placement of 

reinsurance through an intermediary allowed. 

• Facultative reinsurance information and documentation in an environmental 

coverage dispute is discoverable and does not fall into the category of trade 

secrets or proprietary interest. 

Cascade Pole Co., et al. v. Reliance Ins. Co., et al., No. 88-2-0231-3 

(Wash.Sup.Ct. 1992). 

• Attorney-client privilege and work product doctrine upheld so as to preclude 

discovery of reinsurance information. 

ARTRA 524(g) Asbestos Trust v. Transp. Ins. Co., 2011 U.S. Dist. LEXIS 

110272 (N.D. Ill. September 29, 2011). Motion to compel production of 

all documents and communications between the insurer and its 

reinsurers denied in part as certain communications were protected by 

the attorney-client privilege, work-product doctrine and/or the common 

interest doctrine. 

Zurich American Ins. Co. v. The Superior Court of Los Angeles County, 155 

Cal. App. 4th 1485, 66 Cal. Rptr. 3d 833 (2007). Corporate 

communications that discuss legal advice fall within the attorney-client 

privilege, even if the communication did not directly involve an attorney. 

As such, reserve and reinsurance matters may be privileged if the 

documents contained a discussion of legal advice and the privilege had 

not been waived through broader dissemination. 

Minnesota School Boards Association Ins. Trust v. Employers Ins. Co. of 

Wausau, 183 F.R.D. 627 (N.D. Ill. 1999). 

Nat’l Union Fire Ins. Co. v. Stauffer Chemical Co., 558 A.2d 1091 

(Del.Super.Ct. 1989). 

• Work product doctrine waived. 

AIU Ins. Co. v. Certain Underwriters at Lloyd’s, London, et al., Index No. 

602924/07 (Supreme Court of New York, County of New York, January 30, 

2011). Cedent’s information regarding a statement discussed in a memo 


was not protected under the work-product doctrine because the memo 

had already been produced during discovery to the reinsurers. 

Bank of America, N.A. v. Terra Nova Ins. Co., 212 F.R.D. 166 (S.D.N.Y. 

2002), writ of mandamus denied, No. 03-3016 (2nd Cir. 2003). Reinsurer 

waived work product protection by revealing certain information to 

governmental authorities regarding investigation into insurance agent’s 

fraud. 

• Reinsurer is not joint holder of attorney-client privilege between reinsured and 

its counsel. Reinsurer’s production of documents in response to subpoena did 

not waive attorney-client privilege between reinsured and its counsel. 

Pfizer Inc. v. Employers Ins. of Wausau, et al., No. C-108-92, N.J.Super. 

Middlesex Co. (October 8, 1998.) 

Great American Surplus Lines Ins. Co. v. Ace Oil Co., 120 F.R.D. 533 

(E.D.Cal. 1988). 

• Reinsurer’s motion to compel production of documents from its reinsured 

denied based on attorney-client privilege. 

Travelers Cas. & Surety Co. v. Century Indem. Co., 2011 U.S. Dist. LEXIS 

132131 (D. Conn. November 16, 2011). Reinsurer is not entitled to 

privileged material under access to records clause or common interest 

doctrine. 

AIU Ins. Co. v. TIG Ins. Co., 07-cv-7052, 2008 U.S. Dist. LEXIS 96693 

(S.D.N.Y. Nov. 25, 2008). With the exception of one document previously 

sent to reinsurer, motion to compel production of privileged documents 

based on at issue and waiver doctrines denied. 


2007). Reinsurer’s motion to compel an unredacted copy of reinsured’s 

counsel’s settlement analysis letter was denied. The letter evaluated 

whether to settle the matter and rendered legal advice as to the 

consequences of settlement and thus was, in part, privileged. 

Gulf Ins. Co. v. Transatlantic Reinsurance Co., 788 N.Y.S.2d 44 (2004). 

Reinsurance agreement’s “access to records” clause does not waive 

claims of privilege with regard to those documents. 

United States Fire Ins. Co. v. Phoenix Assurance Co., 193 A.D.2d 559, 598 

N.Y.S.2d 938 (App.Div. 1993). 


North River Ins. Co. v. Philadelphia Reinsurance Corp., 797 F. Supp. 363 

(D.N.J. 1992), aff’d in part, rev’d in part on other grounds, 52 F.3d 1194 

(3rd Cir. 1995). 


granted. 

Travelers Cas. & Surety Co. v. Nationwide Mut. Ins. Co., No. 3:11-cv-107 

(D. Conn. May 29, 2012). Granting the reinsurer’s motion to compel in 

part ordering the reinsured to produce all documentation evaluated 

and/or relied upon to treat various settlements as a single occurrence 

under the reinsurance policies. 


132131 (D. Conn. November 16, 2011). Reinsurer’s motion to compel 

production of documents evaluated and/or relied upon by the reinsurer 

in its presentation of the asbestos claims as a single reinsurance 

occurrence granted. 


2007). Reinsurer was entitled to the reinsured’s communication with its 

other reinsurers regarding the settlement of the same loss. 

American Re-Ins. Co. v. United States Fid. & Guar. Co., 837 N.Y.S.2d 616, 

40 A.D.3d 486 (N.Y.A.D. 1 Dept. 2007). Cedent waived attorney-client 

privilege to certain testimony and documents regarding settlement 

agreement entered into between the cedent and underlying insured 

when the cedent placed the privileged matter at issue in the reinsurance 

litigation. 

Travelers Cas. & Sur. Co. v. Constitution Reins. Corp., No. 01-71057, (E.D. 

Mich. 2003), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 

14, No. 6 (7/17/03). 


denied. 


132131 (D. Conn. November 16, 2011). Reinsurer’s motion to compel 

production of coverage dispute documents and reinsured’s 

communications with other reinsurers concerning the asbestos claims at 

issue denied. 

Hartford Accident and Indem. Co. v. Argonaut Ins. Co., No. 06-cv-01813, 

2008 U.S. Dist. LEXIS 47985 (D. Conn. June 23, 2008). Denying reinsurer’s 

discovery requests, where reinsurer sought underlying insurance policies 

to show bad faith on the part of the reinsured. Court noted that 


discovery of the documents would undermine the “follow-the-fortunes” 

doctrine. 

• Reinsurance documents not relevant in environmental coverage dispute. 

OneBeacon Am. Ins. Co. v. Narragansatt Elec. Co. C.A. No. 05-3086, 

(Mass. Super. Ct. June 23, 2007). While underwriting and claims files 

relating to environmental claims are discoverable, reinsurance 

information need not be produced. The benefit of producing 

communications between insurers and their reinsurers was outweighed 

by the burden of locating and producing reinsurance information. 

Golden Eagle Refinery Co., Inc. v. Associated International Ins. Co., No. BC 

128622, (Cal.Super.Ct.), reprinted in Mealey’s Litigation Report: 


• Possible reinsurance of risk is irrelevant. 

United States of America ex rel. Modern Electric Inc. v. Ideal Electronic 

Security Co., 1999 U.S. App. LEXIS 22198 (D.C. Cir.1999). 

• Reinsurer’s motion to compel production of drafting history granted. 

Arkwright Mut. Ins. Co. v. Nat’l Union Fire Co. of Pittsburgh, Pa., 1993 WL 

437767 (S.D.N.Y. 1993). 

• Reinsurance information not generally discoverable but exceptions could be 

made in cases of insolvency of cedents. 

Home Ins. Co. v. Uniroyal Inc., No. CV-93 5227405 (Conn.Super.Ct.), 


(3/8/95). 

• Reinsurance information is not discoverable. 

La. Generating LLC v. Ill. Union Ins. Co., 2011 U.S. Dist. LEXIS 88089 (M.D. 

La. August 9, 2011). Denying a motion to compel production of 

documents, the Court found that the insured failed to demonstrate how 

the production of reinsurance-related documents were relevant to the 

insurer’s defense obligations in the direct coverage action. 

Nat’l Union Fire Ins. Co. of Pittsburg, PA. v. Mead Johnson & Co., et al., 

2011 U.S. Dist. LEXIS 122149 (S.D. Ind. October 21, 2011). Reinsurance 

agreement is not likely admissible. 


TIG Ins. Co. v. Tyco International Ltd., No. 08-cv-1584, 2010 U.S. Dist. 

LEXIS 120342 (M.D. Pa. Nov. 12, 2010). Reinsurance agreements not 

discoverable. 

The Flintkote Co. v. General Accident Assurance Co. of Canada, et al., No. 

3:04-cv-01827, 2009 U.S. Dist. LEXIS 44066 (N.D.Cal. May 26, 2009). 

Motion to compel reinsurance information denied without prejudice 

where the court determined that reinsurance information was not 

directly at issue and thus “less relevant” to determining the state of mind 

of the insurer. Later proceeding on other issues at 692 F. Supp. 2d 1194 

(N.D. Cal. 2010). 

Mt. McKinley Ins. Co., etc., et al. v. Corning Inc., 2011 N.Y. Slip. Op. 1061 

(N.Y. Super. Ct. February 15, 2011), reprinted in Mealey’s Litigation 

Reports: Reinsurance, Vol. 20, No. 21 (3/5/10). Motion to compel 

reinsurance information in coverage action denied as the insured’s 

discovery requests were based on pure speculation, and cases ordering 

disclosure of reinsurance information between an insurer and reinsurer 

were distinguishable from an insured’s requests for reinsurance 

information. 

H & L Chevrolet, Inc. v. Berkley Ins. Co., No. AC-27670, 2008 Conn. App. 

LEXIS 453 (Conn. App. Sept. 23, 2008). A car dealer and its extended 

warranty provider failed to make requisite showing to permit discovery of 

reinsurance records. 

Bituminous Cas. Corp. v. Smith Bros. Inc., No. 07-cv-00354, 2008 U.S. Dist. 

LEXIS 81915 (S.D. Miss. Sept. 22, 2008). Reinsurance deemed irrelevant 

and not discoverable in matter where insurer sought declaratory 

judgment seeking to adjudicate whether an individual qualified as an 

insured under its policy. 

Turnell Corp. v. United States Fidelity & Guaranty Co., 2007 WL 3071856 

(E.D. Mo. October 19, 2007). Motion to compel defendant to identify its 

reinsurer and produce a copy of the reinsurance agreement denied 

because the defendant had not notified the reinsurer of the claim. 

Catholic Mut. Relief Society, et al. v. The Superior Court of Los Angeles, 

42 Cal.4 th 358, 165 P.3d 154, 64 Cal.Rptr.3d 434 (August 27, 2007). 

California Code of Civil Procedure § 2017.210 does not authorize pretrial 

discovery of a nonparty liability insurer’s reinsurance agreements. 

However, in certain unusual circumstances, i.e., reinsurance agreement 

functioning as a liability policy, discovery of reinsurance agreements 

would be appropriate. 


Heights at Issaquah Ridge Owners Assoc., et al v. Steadfast Ins. Co., et al., 

2007 WL 4410260 (W.D. Wa. 2007). Loss reserves and communications 

between the insurer and its reinsurer not discoverable as the plaintiff 

could not demonstrate the relevance to its bad faith claim. However, 

reinsurance policies were discoverable. 

Spirco Envtl. Inc. f/k/a Spirco Servs. Inc., v. Am. Int’l Specialty Lines Ins. 

Co., 2006 WL 2521618 (E.D. Mo. 2006). 

Olin Corp. v. Ins. Co. of N.A., No. 84 Civ. 1968 (S.D.N.Y.), reprinted in 


North River Ins. Co. v. Columbia Cas. Co., 1995 WL 338296 (S.D.N.Y. 

1995). 

WMX Technologies Inc. v. Admiral Ins. Co., No. AM-001003-94T2 

(N.J.Super.), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 6, 

No. 4 (6/28/95). 

Clark Equipment Co. v. Liberty Mut. Ins. Co., 1995 WL 867344 (Del Super. 

1995). 

• Reinsurance information not discoverable by insureds. 

BASF AG v. Great American Ins. Co., No. 04C6969 (N.D. Ill. 2005), 


(01/19/06). 

Catholic Mutual Relief Society v. Superior Court, 27 Cal.Rptr.3d 515 

(Cal.App., 2nd Dist. 2005), pet. for review granted, 116 P.3d 478 (2005). 

Uniroyal Inc. v. American Re-Insurance Co., et al., No. L08172-94, 

(N.J.Super. Middlesex Co.), reprinted in Mealey’s Litigation Report: 


Northern Illinois Gas Co. v. Home Ins. Co., et al., No. 95-L-17549, 

(Ill.Cir.Ct. Cook Cty.), reprinted in Mealey’s Litigation Report: 


Waste Management Inc., et al. v. Admiral Ins. Co., et al., 1994 N.J. LEXIS 

863 (N.J.Super.Ct. 1994). 

Aluminum Co. of America v. Accident and Cas. Ins. Co., No. 92-2-28065-5, 

(Wash.Super.Ct.), reprinted in Mealey’s Litigation Report: Reinsurance, 

Vol. 5, No. 4 (6/29/94). 


E.I. du Pont de Nemours & Co. v. Admiral Ins. Co., 1994 WL 315241 

(Del.Super. 1994). 

Rhone-Poulenc Rorer Inc. v. Home Indemnity Co., 139 F.R.D. 609 

(E.D.Penn. 1991). 

Leski v. Federal Ins. Co., 129 F.R.D. 99 (D.N.J. 1989). 

• Retrocessionaire materials discoverable in suit between cedent and reinsurer. 

Republic Ins. Co. v. PAICO Receivables, LLC, 2005 U.S. Dist. LEXIS 3606 

(N.D. Tex. 2005). Reinsurer breached settlement agreement with 

cedent’s assignee by failing to provide access to records, copies of 

retrocessional billings and accounting updates. 

Arkwright Mut. Ins. Co. v. Nat’l Union Fire Ins. Co., 1994 WL 512354 

(S.D.N.Y. 1994). 

• Reinsurer’s industry materials discoverable. 

Aetna Cas. and Sur. Co. v. Certain Underwriters at Lloyd’s, 263 A.D.2d 

367, 692 N.Y.S.2d 384 (App. Div. 1999). 

• Insurer compelled to produce only final reinsurance agreement in underlying 

matter but discovery of reinsurance communication disallowed. 

Medmarc Casualty Ins. Co. v. Arrow International, Inc., 2002 U.S. Dist. 

LEXIS 15082 (E.D.Pa. 2002). 

• Documents created by reinsurance working group for annual conference not 

discoverable based upon the joint defense privilege in suit between cedent and 

reinsurer. 

Travelers Cas. & Sur. Co. v. Excess Ins. Co. Ltd., WL 1782541 (S.D. Ohio 

Nov. 8, 2000). 

• Arbitration materials discoverable. 

Galleon Syndicate Corp. v. Pan Atlantic Group, Inc., 223 A.D.2d 510, 637 

N.Y.S.2d 104 (1996). 

• Non-party to arbitration not required to comply with panel’s subpoena to 

produce documents. 

Hay Group, Inc. v. E.B.S. Acquisition Corp., 360 F.3d 404 (3rd Cir. 2004). 

Arbitrators are not authorized to serve subpoenas to non-parties for 


documents to be produced either in advance of a hearing or at a hearing 

unless non-party is to testify as witness. 

OneBeacon America Insurance Co. et al. v. Factory Mutual Insurance Co., 

No. 03-MDB-10239-GAO, (D. Mass. 2003), reprinted in Mealey’s Litigation 


• Limited discovery of reinsurers allowed because of offset claim. 

United Technologies Corp., et al. v. American Home Assurance Co., No. 

2:92 CV 267 (D.Conn. 2001), reprinted in Mealey’s Litigation Report: 


• Attorney/Client Privilege does not preclude discovery of claims documents when 

attorneys are hired to conduct claims functions. 

First Aviation Services Inc., et al. v. Gulf Ins. Co., 205 F.R.D. 65 (D.Conn. 

2001). Attorney/client privilege assertion failed in situation where law 

firm was acting as an outside claims handler. 

• Depositions of reinsurance executives allowed. 

General Star Indemnity Co. v. Platinum Indemnity Ltd., et al., 2002 U.S. 

Dist. LEXIS 17903 (S.D.N.Y 2002). Court refused to bar depositions of two 

executives where neither submitted affidavits stating he lacked relevant 

knowledge or that his knowledge was identical to that of other deponent. 

• Information sought by reinsured from reinsurer regarding other claims is 

irrelevant and not discoverable. 

Excess Ins. Co., Ltd. v. Factory Mut. Ins. Co., No. 605759 (N.Y. Sup. 2003), 


(6/5/03). 

• Information sought by reinsured from reinsurer regarding other similar claims is 

discoverable. 

Zurich Am. Ins. Co. v. ACE Am. Reinsurance Co., 2006 WL 3771090 

(S.D.N.Y. 2006), reprinted in Mealey’s Litigation Report: Reinsurance, Vol. 

17, No. 17 (01/04/07). 

• Documents created by reinsurer in the ordinary course of investigating 

reinsured’s claim discoverable. 

AIU Ins. Co. v. TIG Ins. Co., No. 07-7052, 2008 U.S. Dist. LEXIS 66370 

(S.D.N.Y. Aug. 28, 2008). Reinsured’s motion to compel documents from 


einsurer granted insofar as documents sought were not prepared in the 

anticipation of litigation and thus not protected by the work-product 

doctrine, modified by 2009 U.S. Dist. LEXIS 58070 (S.D.N.Y. July 8, 2009). 

Upon reexamination, court found 25 (of 266) documents previously 

ordered discoverable to be privileged and properly withheld, magistrate 

judge’s recommendation at 2010 U.S. Dist. LEXIS 22254 (S.D.N.Y. Feb. 11, 

2010). Magistrate judge recommended that reinsurer’s motion for 

partial summary judgment be granted, adopted by, in part, vacated by, in 

part, summary judgment granted by, in part 2010 U.S. Dist. LEXIS 22245 

(S.D.N.Y. Mar. 9, 2010). Magistrate judge’s recommendation vacated 

without prejudice, except as to the recommendation for summary 

judgment in favor of reinsurer on the issue of whether reinsurer provided 

coverage. 

• Reinsurance information discoverable by underlying claimants. 

Tardiff v. Knox County, et al., No. 02-251-P-C, 2004 U.S. Dist. LEXIS 22862 

(D. Maine 2004). Defendant reinsured self-funded insurance pool 

ordered to produce reinsurance agreement to class action plaintiffs 

pursuant to FRCP 26(a)(1)(D) because reinsurers are insurers who are 

exposed to potential liability regardless of who will ultimately receive 

reinsurance proceeds. 

• State Insurance Department required to index and justify nondisclosure of 

documents relating to reinsurance transactions based upon policyholder’s suit 

under Freedom of Information Act 

Goodrich Corp. v. Clark, 837 N.E.2d 953 (Ill.App. 2005). 

• Subpoena power in seeking reinsurance information 

U.S.A. v. Ferguson, et al., 2007 WL 2815068 (D.Conn. 2007). Criminal 

defendants attempt to subpoena reinsurer’s counsel and former 

employees concerning loss portfolio transaction and reinsurance 

transactions quashed insofar as defendants could provide no basis for the 

admissibility of the material. 

XI. Reinsurance Claim Issues Arising From September 11, 2001 

• Subject matter jurisdiction. 

Combined Ins. Co. of America v. Certain Underwriters at Lloyd’s of 

London, No. 01-10023, S.D.N.Y., reprinted in Mealey’s Litigation Report: 

Reinsurance Vo. 13, No. 11 (10/3/02), aff’d., No. 02-9089 (2d Cir. 2003), 

2003 U.S. App. LEXIS 17545. Holding that the Air Transportation Safety 


• Personal jurisdiction. 

• Duplicative litigation. 

• Consolidation. 

System Stabilization Act does not apply to a suit seeking reinsurance 

proceeds for accidental death and dismemberment claims arising out of 

the September 11 attacks on the World Trade Center. 

The Canada Life Assurance Co. v. Converium Ruckerversicherung, 210 F. 

Supp. 2d 322 (S.D.N.Y. 2002), aff’d, 335 F.3d 52 (2nd Cir. 2003). Holding 

that Section 408(b)(3) of the Air Stabilization Act which states that the 

United States District Court for the Southern District of New York shall 

have original and exclusive jurisdiction over all actions brought for any 

claim resulting from or relating to the terrorist-related aircraft crashes of 

September 11, 2001 does not apply to reinsurance disputes. 

Associated Aviation Underwriters v. Arab Ins. Group, 2003 U.S. Dist. LEXIS 

6254 (S.D.N.Y. 2003). Providing reinsurance on a New York policy does 

not provide sufficient contact with New York simply because the 

underlying events which trigger indemnification occur in the state. 

Section 408(b) of the Air Transportation Safety and System Stabilization 

Act does not apply to reinsurance disputes. 

Combined Ins. Co. of America v. Certain Underwriters at Lloyd’s, London, 

826 N.E.2d 1089 (Ill.App. 2005). Dismissal based upon other pending 

action not appropriate where dismissal would require an Illinois resident 

to file a counterclaim in the concomitant matter pending in the foreign 

jurisdiction. 


Dist. LEXIS 2649 (D. Minn. 2004). Claims arising from 9/11 attacks cannot 

be consolidated absent contract language requiring consolidation. 

• Full Exhaustion of Underlying Limits Not Required. 

Lexington Ins. Co. v. Tokio Marine & Nichido Fire Insurance Company 

Limited, No. 11-cv-00391 (S.D.N.Y. March 28, 2012). Reinsurer denied 

claims of reinsured excess insurer arguing that because the underlying 

settlement did not result in the primary insurer actually paying all of its 

limits, the reinsured excess insurer had no obligation to pay. The Court 

held that the excess insurer’s liability was not contingent upon 

exhaustion of the underlying limit and, therefore, the reinsurer’s 

obligations were triggered as well. 


• One Event. 


al., 2012 U.S. Dist. LEXIS 118233 (S.D.N.Y. August 21, 2012). Court 

granted the reinsurer’s petition to confirm an arbitration award 

wherein the panel found that “[b]ecause the WTC Losses occurred 

within one 24 hour period and within a 10 mile radius. . . all such losses 

constituted one event under the Contracts.” 


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Current U.S. Reinsurance Claim Issues 2013 - Tressler LLP

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