Very often litigation is brought in state court and the opposing party removes the case to federal court. That removal is often met with a motion to remand back to state court. In a recent case, the service of suit clause in the reinsurance agreements affected the court’s decision on a motion to remand.
In Humphreys v. Assicurazioni Generali, S.p.A. (UK), 1:25-CV-01142 (M.D. Pa. Mar. 31, 2026), the liquidator of an insolvent ceding insurer sued reinsurers in Pennsylvania state court when reinsurers rejected the liquidator’s claims under a series of reinsurance contracts. The reinsurers removed the case to federal court in Pennsylvania.
The liquidator moved to remand back to state court based on the service of suit clause in the reinsurance contracts. The reinsurers opposed remand and moved to strike two declarations on custom and practice.
In granting the liquidator’s motion to remand, the court addressed whether the service of suit clause in the reinsurance contracts prohibited the reinsurers from removing the case from state court to federal court. The court determined that the parties intended that the reinsurance contracts incorporate N.M.A. 772, which was the service of suit clause used in the London market when the reinsurance contracts were negotiated. That clause, held the court, required the reinsurers to go to and stay in the state court, which precluded them from removing the case to federal court.
As to the motion to strike, the court denied the motion because it recognized that the declarations were presented by the liquidator to prove customary practices in the London market at the time the reinsurance contracts were negotiated and not to prove missing terms in the reinsurance contracts.
Most reinsurance arbitrations proceed under a confidentiality order or agreement. When the arbitration is over, if a party goes to court to confirm or vacate, a motion to seal is often made in an effort to comply with the parties’ agreement on confidentiality. But it is up to the court whether to seal.
In Tyson International Co., Ltd. v. Partner Reinsurance Europe, SE, No. 1:25-cv-03152 (ALC) (SDNY Mar. 31, 2026), after a long and complicated arbitration involving a captive insurance company’s dispute with its reinsurer over settlement of a substantial fire loss in a poultry rendering facility and the valuation of the property, the arbitration panel issued an award in favor of the cedent but at an amount substantially lower than the amount sought from the reinsurer. Accordingly, the cedent sought to vacate that portion of the award concerning the valuation issue, or alternatively, vacating the entire award and remanding it back to the panel. The reinsurer sought to confirm. Both parties sought to seal various portions of the submissions.
In a separate decision, the court denied the petition to vacate the award and granted the petition to confirm the award. The court found that the cedent did not allege a statutory basis for vacatur and rejected the claims of manifest disregard of the law and that the panel exceeded its authority. Notably, the court quoted the honorable engagement language in the arbitration clause in support of its denial of the motion to vacate.
As to the requests to seal, the court granted the motions in part and denied the motions in part. The court noted that both parties conceded that the documents they sought to seal were judicial documents, which puts the burden on the proponents to show that sealing is necessary to preserve higher values.
The court categorized the exhibits into three categories: (1) the contracts/policies in the underlying dispute; (2) transcripts and opinions from the arbitration; and (3) internal correspondence. This was in addition to the petitions and memoranda of law.
Confidentiality was touted as a key protection of arbitration and the basis for sealing. Also that sealing was appropriate because of proprietary business information in the documents. The court agreed that the documents in category 1 should remain sealed, but denied the request for the other two categories because they contained large portions of non-commercial and non-confidential information. Thus, the court ordered the parties to file redacted portions of the documents in the last two categories.
The Vesttoo scandal has spawned significant disputes between all types of contracting parties. In one dispute, the policyholder’s parent sued a reinsurance intermediary for breach of its reinsurance intermediary authorization agreement (“RIAA”).
In Porch.com v. Gallagher Re, Inc., No. 25-10489 (5th Cir. Apr. 2, 2026), the district court granted the intermediary’s motion to dismiss all claims of breach of contract arising out of the Vesttoo scandal. On appeal, the 5th Circuit affirmed dismissal of two of the claims, but allowed one claim of breach to proceed.
The parties entered into an RIAA and the intermediary procured a reinsurance contract. Security for the reinsurance contract was to be a letter of credit but it turned out to be a fraud. New insurance had to be put in place and substantial funds were lost. The insured sued the intermediary for breach of contract under several sections of the RIAA.
Section 5 of the RIAA required the intermediary to retain reinsurance records for 10 years. The circuit court affirmed dismissal of breach of this section because the claim that the intermediary did not obtain the letter of credit documents contradicted the plain meaning of “retained” in Section 5. Nor did Section 5 include an obligation to procure documents not in the intermediary’s possession.
Section 11 of the RIAA required the intermediary to comply with economic sanction laws. The court held that the intermediary did not breach this section by allegedly failing to comply with Texas insurance laws because this section only applied to economic sanctions.
Finally, the court held that there was enough to sustain a claim of breach of contract concerning Section 13 of the RIAA, which requires the intermediary to provide administrative services. The court found the section ambiguous and could be interpreted to encompass duties concerning the letter of credit. Because there were issues of fact as to whether it was customary for an intermediary to perform servicing duties concerning the letter of credit, the court reversed the district court and sustained this one claim against the intermediary.
Claims against reinsurance intermediaries are rare and we will see where this one goes. But when a major scandal occurs, no one in the contracting chain is immune from a lawsuit.
Court decisions on petitions to confirm or vacate arbitration awards often go into some detail about the dispute. In a recent case, the court chose to use the arbitrator’s very comprehensive reasoned award to address both confirmation and vacatur in extreme detail.
In Hamilton Managing Agency Ltd. v. ICI Mutual Insurance Co., RRG, No. 2:25-mc-00079-cr, D. VT (Apr. 14, 2026), the cedent paid a claim to an insured under a D&O policy that was reinsured in part. The reinsurers disputed liability under the reinsurance contract and the parties arbitrated before a sole arbitrator. The arbitrator issued interim and final awards in favor of the cedent and apparently issued a detailed reasoned award. The reinsurers petitioned to vacate the award on multiple grounds. The cedent cross-petitioned to confirm the award.
In a lengthy and detailed wide-ranging opinion the court denied the petition to vacate and confirmed the arbitration award. What is different about this case is that the court chose to expound upon the arbitrator’s reasoned award in great detail to address the various grounds for vacatur and to support confirmation.
The issues arbitrated focused on whether “follow-the-fortunes” should be imputed into the reinsurance contract (or whether there even was a “follow-the-fortunes” clause) and whether the prior acts exclusion in the underlying policy precluded coverage of the subject matter of the dispute (reinstatement of financial filings with the SEC).
On the petition to vacate, among other things, the issue of arbitrator disclosure was raised in the context of seeking to vacate because of evident partiality. The ARIAS·U.S. Code of Conduct and its application to the allegations of non-disclosure were part of the court’s decision. The non-disclosure argument focused on the arbitrator’s prior expert testimony concerning whether industry custom and practice requires that “follow-the-fortunes” be imputed into all reinsurance contracts. The issue was raised with the arbitrator, who explained his position, which the court pointed out the reinsurers accepted. Ultimately, the court found that the reinsurers waived the argument. Nevertheless, the court looked at the substance of the argument and found that the arbitrator’s prior testimony on the imputation issue did not provide a basis for finding evident partiality.
The reinsurers also sought to vacate the award based on the arbitrator exceeding his authority and manifest disregard of the law. The court found that the arbitrator’s award was well within the scope of the arbitration clause, which included honorable engagement language. The court also found that the arbitrator provided a colorable justification for the award and that no egregious impropriety was apparent. Notably, the court stated that “[a]n arbitrator cannot manifestly disregard the law when he or she is empowered by the governing agreement to disregard it and follow industry custom and practice instead.” (citation omitted).
Arbitration awards are very hard to vacate. Where you have a well-reasoned award, the task is even harder.
My most recent IRMI.com Expert Commentary – Reinsurance was published on April 3, 2026. It is about why drafting reinsurance contracts in plain English is important. You may have to register to read it. You can access it here.
Proving the existence of an old reinsurance contract, especially a facultative certificate, is a fact-intensive endeavor. Time and time again, long-tail losses, like asbestos losses, result in insurance companies uncovering “evidence” of long-lost reinsurance certificates. Whether that evidence is sufficient to “prove” the contract is often a question of fact.
In 2025, the courts issued some significant arbitration decisions in non-reinsurance cases that have potential applicability to reinsurance disputes. Additionally, decisions were handed down concerning the defense of late notice, the use of collateral estoppel direct actions against reinsurers, disclosure of reinsurance information and funding of collateral.
Arbitration
In the non-reinsurance context, significant decisions were rendered in 2025 concerning reverse preemption and manifest disregard as a ground for vacatur of an arbitration award.
Arbitrability and Motions to Compel Arbitration
For decades, those seeking to enforce arbitration clauses in insurance and reinsurance policies have, in certain states, faced a major obstacle: reverse preemption. Reverse preemption occurs when a state law precluding arbitration clauses in insurance policies overrides — or reverse preempts — enforceability of arbitration through the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) based on the McCarran-Ferguson Act, which allows state insurance laws that regulate the business of insurance to override general federal laws that are not specific to insurance and, in the case of an international treaty, that are not self-executing. The Second Circuit Court of Appeals, since 1995, has held that the New York Convention was not self-executing. That holding was reversed in 2025.
In Certain Underwriters at Lloyd’s, London v. 3131 Veterans Blvd LLC, 136 F.4th 404 (2d Cir. 2025), a surplus lines insurer issued policies to two insureds with identical arbitration clauses. The insureds sued the insurer in Louisiana state court over hurricane losses and the insurers sued in New York federal court to compel arbitration under Chapter 2 of the Federal Arbitration Act (“FAA”) and the New York Convention. The insureds argued reverse preemption to dismiss the cases. Both of the underlying decisions held in favor of the anti-arbitration provisions in Louisiana’s insurance law based on reverse preemption and the Second Circuit’s holding in Stephens v. American International Insurance Co., 66 F.3d 41 (2d Cir. 1995), and denied the insurer’s petitions to compel arbitration.
The insurer appealed the dismissals arguing that subsequent U.S. Supreme Court precedent required an abrogation of Stephens and enforcement of the arbitration clauses under the New York Convention. In reversing and remanding, the Second Circuit held that its reasoning in Stephens had been fatally undermined by the Court’s holding in Medellin v. Texas, 522 U.S. 491 (2008). The court found that Stephens had been abrogated to the extent that it held that Article II, section 3 of the New York Convention was not self-executing. Because the court held that under the Medellin test Article 11, Section 3 of the New York Convention is self-executing, the Convention could not be reverse preempted under the McCarran-Ferguson Act. This should mean that if a case falls under Article 11, Section 3 of the New York Convention, state anti-arbitration laws should not override the policy in favor of international commercial arbitration.
Petitions to Confirm or Vacate Arbitral Awards
The grounds for vacating an arbitration award under the Federal Arbitration Act (“FAA”) are limited. For decades, however, parties have raised manifest disregard of the law as a ground for vacatur. Many courts have limited or rejected manifest disregard as a basis to vacate an arbitration award. In 2025, the Fifth Circuit Court of Appeals in a non-reinsurance case relegated manifest disregard to the dustbin of history.
In United States Trinity Energy Services, L.L.C. v. Southeast Directional Drilling, L.L.C., No. 24-10823 (5th Cir. Apr. 28, 2025), parties to a pipeline construction contract arbitration cross-petitioned to confirm and vacate a final award. The Texas District Court denied the petition to vacate and granted the petition to confirm. The losing party appealed to the 5th Circuit raising manifest disregard of the law.
In affirming the order confirming the arbitration award, the circuit court flatly rejected manifest disregard of the law as a basis for vacating an arbitration award under the FAA. The court noted that only limited circumstances allow for vacatur of an arbitration award. Indeed, stated the court, Section 10 of the FAA provides the exclusive statutory grounds. The court noted that manifest disregard was not one of the statutorily enumerated grounds for vacatur and stated that “[o]ur court has never held that “manifest disregard of the law” is a basis to establish that arbitrators “exceeded their powers” under § 10(a)(4).”
Issue Preclusion/Collateral Estoppel of Arbitration Awards
In Amerisure Mutual Insurance Co. v. Swiss Reinsurance America Corp., No. 24-1492 (6th Cir. Nov. 4, 2025) (Not Recommended for Publication), the circuit court affirmed an order of the district court granting a reinsurer’s motion for summary judgment based on collateral estoppel. The dispute was over expenses in addition to the limits for defending asbestos cases against the underlying insured.
Here, the ceding insurer had a prior arbitration with another facultative reinsurer where the arbitration panel in its final award held that the reinsurer did not have to pay expenses outside the limits of the umbrella policies under the facultative certificates. Subsequent to that arbitration the ceding insurer sought judicial confirmation of the award (based on other elements of the award that were favorable to the ceding insurer).
When the ceding insurer brought the underlying action against the second reinsurer arguing the same issue concerning whether the facultative certificate had to pay the umbrella expenses in addition to the limits, the reinsurer countered with a motion for summary judgment for collateral estoppel based on the prior arbitration award that was confirmed in court. The district court agreed and granted the reinsurer summary judgment.
On appeal, the Sixth Circuit affirmed. The court found that all the elements of collateral estoppel or issue preclusion applied and rejected the ceding insurer’s arguments to the contrary. At bottom the court held that precluding the ceding insurer from relitigating the same issue against the second reinsurer served an essential purpose of the collateral estoppel doctrine, which is to promote judicial economy by preventing needless litigation.
Securities Fraud
In 2025, a federal appeals court addressed an appeal of a summary judgment motion in favor of the reinsurer against investors in a securities fraud case focused on the omission of historical loss reserves in the reinsurer’s public filings.
In In re: Maiden Holdings, Ltd. Securities Litigation, 2025 WL 2406864 (3d Cir. 2025), the Third Circuit Court of Appeals reversed the district court’s order granting summary judgment dismissing a securities fraud case. The case focused on whether the reinsurer’s knowledge of historical loss reserves of certain business assumed from its ceding insurer and its omission to disclose that information in public filings was material under the federal securities laws.
As the court found, reinsurance is the business of insuring insurance companies. Therefore, just like any other insurance company, reinsurers have to set aside funds to pay out future claims. These set-aside funds, known as “loss reserves,” are the product of “an insurer’s actuarial judgment” and are generally calculated based on many factors. (citation omitted). Because reserves represent predicted losses, they are effectively removed from an insurer’s operating income and treated as liabilities in financial reports. A company that sets its loss reserves too low effectively understates its liabilities, thus inflating its perceived financial strength.
The critical question the court addressed was whether the omitted historical loss data was material. The key was that the evidence was sufficient to show that the reinsurer knew and considered the adverse loss data, but in calculating its reserves for public filing purposes chose a different reserve pick. The court pointed out that the cedent’s business was the reinsurer’s largest client relationship, that the reinsurer had access to the negative historical data, and that historical loss data was an important part of the reinsurer’s loss reserve estimation process. The court reversed summary judgment and allowed discovery to proceed at the district court level.
Late Notice
Late notice of claim has been a difficult defense for reinsurers to sustain. But when the delay in notice is objectively unreasonable and material, it may be, as the Fifth Circuit found in 2025, a breach of the reinsurance contract enough to absolve the reinsurer of its duty to indemnify.
In United States Fire Insurance Co. v. Unified Life Insurance Co., No. 24-10292 (5th Cir. Aug. 14, 2025), a dispute arose involving reinsurance for a short term medical insurance claim. The underlying insured disputed the cedent’s determination on usual and customary charges and litigation ensued culminating in a class action. The cedent did not notify the reinsurer about the claim and the litigation until December 2019, although the underlying litigation commenced in April 2017. Despite taking actions that the reinsurer suggested, the cedent was unsuccessful in the underlying litigation and ultimately settled the claim. The reinsurer denied the claim based on late notice.
The reinsurer brought this action to declare that notice of the underlying litigation was untimely and prejudicial. On cross-motions for summary judgment, a magistrate judge ruled for the cedent on its counterclaim using a subjective notice test and, alternatively, found no prejudice. The reinsurer appealed.
On appeal, the 5th Circuit reversed, holding that the delay was objectively unreasonable and material and that it breached the reinsurance contract. Treaty required the cedent to give prompt notice to the reinsurer “of all Claims which, in the opinion of [the cedent], may result in a claim hereunder …. ” The issue in dispute was whether notice was required based on a subjective or objective standard of what the cedent believed.
In reversing the district court, the circuit court found that in considering the question of “whether the phrase ‘”in the opinion of’ departs from an objectively determined duty to notify, [w]e hold that the Treaty did not depart from the ordinary rule.”
We reject a subjective standard in favor of an objective one for three reasons. First, an objective reading best interprets the Treaty as a whole and in light of background principles of quota share treaty reinsurance. Second, Texas authority, albeit sparse, suggests that Texas courts would agree that an objective standard controls. Third, most other jurisdictions faced with similar provisions apply an objective standard.
The court held that the cedent breached the notice provision. First the court considered when a reasonable cedent would have known that its duty to provide prompt notice of the underlying litigation was triggered and whether the cedent’s notice was reasonably prompt after that point. The court held that notice was not reasonably prompt based on the facts. The court also held that the unreasonable notice was prejudicial to the reinsurer based on a material breach of the reinsurance contract.
Production of Reinsurance Information
Policyholders and claimants seeking to access reinsurance contracts and other reinsurance information and communications to support their claims continued to take up judicial time in 2025. Courts are split on the issues, but the issues are all fact-dependent and may result in disclosure being narrowed to fit the facts.
In Divinity v. Bridgefield Casualty Insurance Co., 3:24-cv-00522-LGI (S.D. Miss. Apr. 28, 2025), a pro se plaintiff, among other things, requested production of its insurer’s reinsurance agreement. The insurer moved to limit the disclosure of the reinsurance agreement. The insured sought the reinsurance agreement as relevant to the claim for bad faith coverage denial. The dispute centered on the initial disclosure requirement in Federal Rule of Procedure 26(a)(1)(A)(iv), which requires disclosure of any insurance agreement under which an insurance business may be liable to satisfy all or part of a possible judgment in the action or to indemnify or reimburse for payments made to satisfy the judgment.
In denying the insurer’s motion to limit disclosure, the court held that “[the insurer] is self-insured and could satisfy the full amount of damages sought by Plaintiff is not a sufficient reason to excuse disclosure of [ the insurer’s] reinsurance agreement.” The court cited other cases where courts have held reinsurance agreements fit within the scope of 26(a)(1)(A)(iv) and found that it would not be burdensome for the insurer to produce the reinsurance agreement.
In Sinclair, Inc. v. Continental Casualty Co., No. 1:24-cv-03003-SAG (D. Md. Apr. 28, 2025), a coverage dispute arose over a cyber loss when the insurers denied coverage. A magistrate judge was asked to address a number of discovery disputes, including the policyholder’s request for production of reinsurance agreements and communications concerning reinsurance for cyber claims. The policyholder argued that the reinsurance information was relevant to its claim for bad faith.
While noting the diversity of decisions among the courts, the magistrate judge ultimately ruled that “that the reinsurance policies, as well as related documents and communications, are relevant to [the policyholder’s] bad faith claim and should be produced.” But because of the broadness of the document request, the court limited what information needed to be produced to communications between the insurer and the reinsurers/retrocessionaires concerning the cyber claim, the insured’s policy or any reinsurance contract providing coverage for the cyber claim.
Jurisdiction/Direct Right of Action
Traditionally, a policyholder cannot sue a reinsurer without privity of contract or some exceptional circumstance.
In Indorama Ventures Holdings L.P. v. Factory Mutual Insurance Co., No. 1:24-cv-00404 (E.D. Tex. Aug. 7, 2025), the policyholder brought a breach of contract and declaratory judgment action to recover the full value of business interruption losses caused by an explosion. The policyholder had already recovered $50 million and was seeking an additional $50 million. The reinsurer moved to dismiss the complaint for failure to state a cause of action (no right to sue the reinsurer).
The facts indicate that the property and business interruption policy was issued by a captive insurer and reinsured by the reinsurer. But the reinsurer was the party who was obligated to adjust and pay any claims. In fact, the reinsurer adjusted and paid the first $50 million claim. The policy was originally issued to a third-party that the policyholder purchased, and the parties signed an insurance assignment agreement. That assignment agreement was agreed to by the reinsurer, which acknowledged its role in adjusting and paying claims directly to the policyholder.
Ultimately, the court denied the motion to dismiss the complaint. The court found that the reinsurance agreement was outside the complaint and did not need to be considered. But even if the reinsurance agreement was considered by the court, the complaint still stated a cause of action under Texas law. Under Texas Insurance Code Ann. § 493.055, entitled “Limitation on the Rights Against Reinsurer,” A person does not have a right against a reinsurer that is not specifically stated in: (1) the reinsurance contract; or (2) a specific agreement between the reinsurer and the person.
As the court found, “[]he relevant ‘right’ in this case is [the policyholder’s] right to sue [the reinsurer] directly.” That right, held the court, did not exist under the reinsurance agreement. In denying the motion to dismiss, the court held that the policyholder has sufficiently pled a right to sue the reinsurer directly based on an implied agreement outside the reinsurance agreement.
Collateral
In Wesco Insurance Co. v. Sunfund Reinsurance Ltd., No. 653136/2024 (N.Y. Sup. Ct. N.Y. Co. Jul. 23, 2025), a cedent entered into a 100% quota share reinsurance contract with a Turks & Caicos domiciled reinsurer covering vehicle service contracts and limited warranties. The reinsurance contract required a trust fund to secure the reinsurer’s liabilities. Claims came in, the trust fund was not funded, and requests for payment of claims in excess of premium went unheeded.
The cedent brought a breach of contract action and sought a conditional dismissal for the reinsurer’s failure to comply with New York Insurance Law section 1213(c) (requiring a New York license or security to file an answer). The cedent then moved for a default judgment when the conditional order under 1213(c) was not met.
In granting the default judgment the court found that the cedent met the requirements for breach of contract and specific performance for funding the trust fund (after payment of the outstanding losses).
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In my latest IRMI.com Expert Commentary – Reinsurance, I discuss Special Termination provisions in reinsurance contracts and what they mean. You can access the Commentary here.
Asbestos claims continue to spawn reinsurance disputes over facultative reinsurance coverage of expenses in addition to the limits. What happens when the issue is decided in an arbitration between a ceding insurer and one reinsurer and the ceding insurer raises the same issue against another reinsurer in a subsequent litigation?
In Amerisure Mutual Insurance Co. v. Swiss Reinsurance America Corp., No. 24-1492 (6th Cir. Nov. 4, 2025) (Not Recommended for Publication), the circuit court affirmed an order of the district court granting a reinsurer’s motion for summary judgment based on collateral estoppel. The dispute was over expenses in addition to the limits for defending asbestos cases against the underlying insured. The ceding insurer issued primary and umbrella policies and reinsured the umbrella policies with the reinsurer under facultative certificates.
The real issue here is the ceding insurer’s prior arbitration with another facultative reinsurer where the arbitration panel in its final award held that the reinsurer did not have to pay expenses outside the limits of the umbrella policies under the facultative certificates. Subsequent to that arbitration the ceding insurer sought judicial confirmation of the award (based on other elements of the award that were favorable to the ceding insurer).
When the ceding insurer brought the underlying action against the second reinsurer arguing the same issue concerning whether the facultative certificate had to pay the umbrella expenses in addition to the limits, the reinsurer countered with a motion for summary judgment for collateral estoppel based on the prior arbitration award that was confirmed in court. The district court agreed and granted the reinsurer summary judgment.
On appeal, the Sixth Circuit affirmed. While the opinion is not recommended for publication and is therefore not precedent, the court provides a clear roadmap for analyzing whether a prior arbitration award in favor of a different reinsurer can support collateral estoppel for a different but similarly situated reinsurer so it is worth the read.
In essence, the court found that all the elements of collateral estoppel or issue preclusion applied and rejected the ceding insurer’s arguments to the contrary. The court found that the main issue being litigated — whether the ceding insurer’s reinsurers must reimburse it for defense costs it paid to its insured over the umbrella limits — was raised and actually litigated in the earlier arbitration. The court found that the arbitration record and award indicate that the umbrella drop-down provision was necessarily decided against the ceding insurer even though it was not expressly mentioned in the award.
The court found that the ceding insurer had the opportunity to fully and fairly litigate the defense cost issue in the arbitration. It noted that the ceding insurer sought to confirm the award and rejected the ceding insurer’s argument that the limited opportunity to “appeal” an arbitration award should preclude collateral estoppel. The court also rejected the ceding insurer’s argument that the “honorable engagement clause” and the difference in how an arbitration is conducted compared to a court proceeding should preclude collateral estoppel. The court noted that the ceding insurer had not shown the arbitration to be unfair or that the decision was unreliable.
The court also rejected the argument that mutuality of estoppel precluded collateral estoppel finding that the ceding insurer’s argumentative posture in both proceedings was the same. The court held that requiring mutuality would encourage gamesmanship.
At bottom the court held that precluding the ceding insurer from relitigating the same issue against the second reinsurer served an essential purpose of the collateral estoppel doctrine, which is to promote judicial economy by preventing needless litigation.
