Archives: Reinsurance Contracts

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June 2018 Reinsurance Newsletter

The Squire Patton Boggs June 2018 Reinsurance Newsletter is out.  You can access it here.  This quarter’s newsletter covers the Second Circuit’s remand of Global v. Century, an interesting Massachusetts case involving self-insured workers’ compensation programs and follow-on reinsurance, and a McCarran-Ferguson reverse preemption case.  Please enjoy.… Continue Reading

Interplay Between Reinsurance and Self-Insured Workers’ Compensation

There is a somewhat complicated statutory scheme in many states concerning an employer’s ability to self-insure its workers’ compensation obligations. Reinsurance often plays a role where an employer self-insures. Typically, that role is to provide “reinsurance” in excess of a self-insured retention to protect the employer’s top end.  If an employer fails to insure or … Continue Reading

English Court of Appeal Rules on “Experience of Insurance and Reinsurance” Arbitrator Qualifications Includes Legal Experience

In Allianz Insurance PLC (formerly Cornhill Insurance PLC) v. Tonicastar Ltd,  [2018] EWCA Civ 434, the Court of Appeal held that the arbitral qualification of experience of insurance and reinsurance means experience as a lawyer working for the industry and does not mean only those who have worked for the industry qualify.… Continue Reading

March 2018 Reinsurance Newsletter

Our March 2018 Reinsurance Newsletter is now available for your reading pleasure.  This issue covers the Global v. Century decision by the New York Court of Appeals answering the Second Circuit’s certified question as well as our annual review of reinsurance trends in 2017, as well as cases involving reinsurance for the September 11th terrorist attacks … Continue Reading

Direct Claims Against Reinsurer Fail to Succeed

Direct actions against reinsurers have been on the rise for some time.  To bring a direct action, a policyholder must get over the contractual privity hurdle and find some basis to show a direct relationship or third-party beneficiary relationship.  Many policyholders try to bring these actions, but they more often than not fail at the … Continue Reading

The Bell Tolled — New York Court of Appeals Rules No Presumption on Facultative Liability Cap

An interesting trend has emerged from the New York Court of Appeals.  In several recent cases, parties have asked the court to declare that a bright line rule of construction or presumption arises in every case where an insurance or reinsurance contract has certain language.  The high court has rejected this call for a bright line … Continue Reading

Flood Reinsurance Triggered — So What Happens Next?

In an effort to stabilize the National Flood Insurance Program (“NFIP”), Congress passed several bills that allowed the NFIP to access the private reinsurance market. First piloted in 2016, in 2017 the program resulted in a broker-placed $1.042 billion cover with 25 private reinsurance markets.  The 2017 catastrophe excess-of-loss program provides coverage of 26% of … Continue Reading

Should We Expect a Surge in Reinsurance Disputes?

I recently came across a number of articles in the insurance trade press discussing the economic effect of the recent catastrophes on the reinsurance market.   Some of the commentators wondered whether all of the property and related losses will cause reinsurance premiums to rise and end the very long soft reinsurance market.  Others thought that the recent … Continue Reading

Confidentiality Agreements in Reinsurance Arbitrations

Confidentiality agreements in reinsurance arbitrations are ubiquitous, but often cause concern when a subsequent arbitration arises over the same or similar contracts with the same or similar parties.  A question that has arisen with some frequency, but which has not been fully addressed in court, is whether the confidentiality agreement in the first arbitration precludes … Continue Reading

Collateral Effect of US-EU Covered Agreement on Reinsurance Disputes

With the signing of the Bilateral Agreement on Prudential Insurance and Reinsurance Measures (the “Covered Agreement“), the EU and US have embarked on a five-year road towards cooperation on insurance and reinsurance competition, supervision and regulation.  While the main purpose of the Covered Agreement was leveling the playing field for international reinsurers and agreeing on cooperation and information … Continue Reading

Bellefonte’s Influence Continues to Wane

As we all (or at least some of us) wait breathlessly for the New York Court of Appeals to answer the Second Circuit’s certified question in Global Reinsurance Corp. of Am. v. Century Indemn. Co., 843 F.3d 120 (2d Cir. 2016), which is now scheduled for argument on Wednesday, November 15, 2017 at 2:00 p.m., … Continue Reading

September 2017 Reinsurance Newsletter

Our September 2017 Reinsurance Newsletter includes a featured article on discovery of reserves and reinsurance information as well as an update on the US-EU Covered Agreement.  It also reports on recent cases, including a manifest disregard case, a case on Insurance Law 1213 security and reinsurance collection issues by the assignee of a liquidator.  Please … Continue Reading

Arbitration Award Clarification Confirmation

Generally, when an arbitration panel issues a final award the panel is “functus officio“; its powers expired and its duties relieved because it has finished its work and there’s no more to be done.  Sometimes, however, an arbitration panel will retain jurisdiction for a period of time after the final award is issued in case … Continue Reading

June 2017 Reinsurance Newsletter

This quarter’s Squire Patton Boggs Reinsurance Newsletter leads off with a summary of a New York federal case where an arbitration award was vacated for evident partiality.  It also features an update on the US-EU Covered Agreement. Please enjoy.… Continue Reading

Proving a Reinsurance Contractual Relationship Exists

Litigating a reinsurance contract dispute is not much different than litigating any commercial contract dispute. The party seeking recovery under the contract has to prove that the contract exists. Proving the policy can be a big issue with claims asserted under old policies and reinsurance contracts. This certainly has been an issue with asbestos and other … Continue Reading

Precluded By Issue Preclusion From Enforcing Reinsurance Arbitration Clause

In a recent state court appellate decision on a reinsurance collections dispute, the court affirmed a lower court order denying a motion to compel arbitration based on the collateral estoppel or issue preclusion effect of a prior decision. Collateral estoppel or issue preclusion may be used offensively or defensively. It is a civil procedure doctrine … Continue Reading

Relationship? What Relationship?: Evident Partiality and Arbitrator Disclosure

Arbitrators have a special responsibility to disclose all relevant relationships to the parties so that any potential conflicts can be vetted. There are some obvious relationships that need to be disclosed like prior employment by one of the parties. There are other relationships that may be disclosed out of an abundance of caution, but typically … Continue Reading

March 2017 Reinsurance Newsletter

This quarter’s Squire Patton Boggs Reinsurance Newsletter focuses on the certified question sent to the New York Court of Appeals by the Second Circuit on Bellefonte. It also features regulatory updates on the US-EU Covered Agreement as it affects reinsurance and on the new duty to pay insurance and reinsurance claims in the UK. Finally, … Continue Reading

The US/EU Covered Agreement — Why Is It Relevant to Disputes?

On January 13, 2017,  Federal Insurance Office (“FIO”) submitted to the US Congress a Covered Agreement negotiated with the EU  addressing:  (1) group supervision;  (2) reinsurance;  and (3) exchange of information between regulators.  Once fully implemented, the Covered Agreement eliminates EU collateral and local presence requirements for US insurers operating in the EU, and eliminates … Continue Reading

Exculpatory Clauses in Reinsurance Agreements

Exculpatory clauses appear in many contracts. They are often used to protect a contracting party from damages caused by its actions or the actions of others. For example, a hold harmless clause may protect one party from third-party suits caused by the alleged negligence of the other party. Exculpatory clauses, like hold harmless or indemnification clauses, … Continue Reading

The Assault on Bellefonte Accelerates

In a highly anticipated decision, the United States Court of Appeals for the Second Circuit has certified an important question of reinsurance law to the New York Court of Appeals. The appeal had amicus briefs from reinsurance intermediaries supporting the cedent’s argument that the so-called “Bellefonte” rule should not apply. We discussed this in an … Continue Reading

What a Difference a Word Makes

Lack of precision in reinsurance contract wording has been known to engender anomalous results. Often a single word or phrase can cause a court or arbitrator to construe an agreement in ways unintended. In reinsurance arbitrations, when the panel majority decides how a contract operates based on its construction of a word or phrase, the … Continue Reading

The Dangers of Selecting an Exclusive Arbitral Forum

Arbitration clauses in commercial contracts often specify an arbitral forum before which any dispute must be arbitrated. Insurance and reinsurance contracts containing arbitration clauses are no different. Specificity about the arbitral forum (or the arbitral rules or the appointing authority in case of an impasse) in an arbitration clause has resulted in much case law over the … Continue Reading

Contractual Privity and Reinsurance

In most jurisdictions a policyholder cannot bring a direct action against a reinsurer because of the lack of contractual privity. Yes, there are some quirky statutes and jurisdictions that allow a direct right of action under certain circumstances, but the general rule is that where there is no contractual relationship between the reinsurer and the … Continue Reading
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