Commentary on insurance and reinsurance disputes and related issues and the website of Schiffer Law & Consulting PLLC
Receivers in insurance insolvencies always look for creative ways to manage their insolvent estate. Some try to close the estate early by accelerating reinsurance recoverables. Others, as in the case discussed below, try to allocate estate assets to others so that claims in excess of the guaranty fund limit might be paid in part.
Continue reading “Liquidation Court Rejects Attempt by Receiver to Allocate Funds to a Captive”
There is a whole world of automobile service contracts sold by car dealers that are sometimes “reinsured” by affiliated reinsurers. Many disputes have arisen out of these deals and many of these disputes are arbitrated.
In a recent case in Georgia, an arbitration award in an auto service contract dispute was issued and confirmed by the court. On appeal, the court of appeals vacated the arbitration award based on manifest disregard of the law. The Georgia Supreme Court took the case on certiorari and reversed the court of appeals and remanded the matter.
Continue reading “Georgia Supreme Court Reverses and Remands Appellate Court Order Reversing Order Confirming Arbitration Award”As some of you know, I write a quarterly Reinsurance Commentary for International Risk Management Institute, Inc. (IRMI). Quite a few years ago I wrote a Commentary entitled “Reinsurance Arbitration – A Primer.” For my December 2021 Reinsurance Commentary, I updated that commentary. I hope you find it useful. You can access it at IRMI.com.
In some reinsurance disputes, there is often tension between the words of the reinsurance contract and what one of the parties say they intended to reinsure. On the one hand, a reinsurance agreement is a contract and, in court, is enforced like any other contract based on the plain and unambiguous contract language. On the other hand, reinsurance traditions rely on custom and practice and some reinsurance contracts provide that the agreement should be interpreted as an honorable engagement and not merely as a legal obligation.
Continue reading “In Reinsurance, the Contract Wording Should Control”
It has become commonplace for reinsurance counterparties to change over time. This is especially true with runoff books of business or books of business that have been transferred to runoff entities through loss portfolio transfers or other mechanisms. It is also commonplace that when a book of business is acquired by a runoff organization, the assuming entity will enter into one or more service agreements with affiliated companies to manage the assumed claims and financial transactions.
When a new organization is managing an assumed reinsurance portfolio it often takes a fresh look that the reinsurance business it acquired. This sometimes results in frustration for the ceding company when claims are not being paid the same way they were prior to the acquisition. Naturally, disputes arise and sometimes the affiliated service providers are brought into the dispute. In a recent case in Illinois a runoff dispute landed in court and motions to compel arbitration and dismiss the complaint against the service providers were made.
Continue reading “Runoff Reinsurance Disputes and Service Providers”
It should be pretty obvious that you only get the insurance you ask and pay for. Yet, sometimes coverage is sought well beyond the scope of the policy. In a recent case, the court made short work of the issue, but nevertheless the case went all the way to an appeals court even though it was obvious there was no coverage.
Continue reading “Insurance Coverage Only Goes So Far”
Arbitration provisions in insurance agreements often come under attack when one of the parties to a dispute invokes a state law anti-arbitration provision to oppose a motion to compel arbitration. In many of these disputes, the court has to determine what state law governs the dispute. In a recent case, a federal magistrate judge recommended that the insurer’s motion to compel arbitration be denied because of a state’s anti-arbitration law but the federal district court disagreed.
Continue reading “Parties’ Choice of Law Prevails: Arbitration Compelled”
In many insurance policies, particularly directors and officers liability policies, coverage is precluded if one insured brings a claim against another insured. But what happens if one of the named plaintiffs is not an insured party? A recent Sixth Circuit Court of Appeals case addresses this issue.
Continue reading “Insured vs Insured Exclusion Precludes Coverage”
Courts are tough on exclusions but when an exclusion is clear it will preclude coverage. In a recent case, an exclusion for bodily injury arising out of weapons resulted in a coverage case being dismissed
Continue reading “Weapons Exclusion Precludes Coverage”
You don’t see a lot of healthcare reinsurance disputes but in the case discussed below a dispute arose after a heart transplant took place. A motion to dismiss the complaint was granted (or at least recommended by the Magistrate Judge). It involves statutory construction.
Continue reading “Reinsurer Prevails in HMO Excess Reinsurance Dispute”
