Category: Blog

Follow-the-Fortunes Rejected By 11th Circuit

Photo by Michael M on Pexels.com

Follow-the-fortunes is a reinsurance concept that often is misconstrued. Some wish to impose it on every reinsurance contract regardless of whether a follow-the-fortunes clause exists. Cedents invoke it to compel payment from their reinsurers. In a recent case, the Eleventh Circuit had an opportunity to weigh in on whether the follow-the-fortunes doctrine should be inferred regardless of the contract wording and whether the terms of the reinsurance contract contained follow-the-fortunes language.

Continue reading “Follow-the-Fortunes Rejected By 11th Circuit” →

Federal Jurisdiction Matters to Vacate or Confirm an Arbitration Award

The Supreme Court Building on 1 First Street, NE. Original image from Carol M. Highsmith’s America, Library of Congress collection. Digitally enhanced by rawpixel. by Carol M Highsmith is licensed under CC-CC0 1.0

Insurance and reinsurance arbitrations are often governed by the Federal Arbitration Act (“FAA”). Enforcement of arbitration rights under the FAA, however, may take place in either federal or state courts. To proceed in federal court, subject matter jurisdiction must exist. In a recent case, the United States Supreme Court addressed an open question concerning whether subject matter jurisdiction existed on competing applications to vacate and confirm an arbitration award so that the federal district court could hear the dispute.

Continue reading “Federal Jurisdiction Matters to Vacate or Confirm an Arbitration Award” →

Climate Change and Reinsurance

In my latest IRMI.com Expert Commentary-Reinsurance, I discuss the important issue of climate change and its effect on reinsurance. You can read the commentary here.

ARIAS US Form Plays Major Role in Court’s Decision to Seal Documents

Photo by Tayeb MEZAHDIA on Pexels.com

Whether courts will seal reinsurance arbitration documents when the parties come to court for judicial relief has been a significant topic for several years. Most courts refuse to seal arbitration information when motions to vacate or confirm an arbitration award are made. But when the controversy is over whether arbitration should be compelled, sometimes the result is different. In a recent case, the court agreed to seal arbitration-related documents in large part because of the ARIAS U.S. confidentiality agreement.

Continue reading “ARIAS US Form Plays Major Role in Court’s Decision to Seal Documents” →

Compelling Arbitration After Assignment

Photo by Anna Nekrashevich on Pexels.com

Reinsurance disputes sometimes become complicated when the original parties to the reinsurance contract are no longer involved. Enforcing arbitration rights also becomes more complicated when contracts are assigned or where a receiver is involved. Who has the right to compel arbitration and was the arbitration demand properly served are questions that arise. In a recent case, a New York State motion court addressed some of these issues.

Continue reading “Compelling Arbitration After Assignment” →

Follow the Fortunes: The Case for Aggregation Under a CAT XL

Photo by Arya Kratos on Pexels.com

COVID-19 has sparked new debates about how insurance losses are identified, categorized, defined and potentially aggregated. This is especially true in the reinsurance context. While in the US, insurance claims for losses sustained under business income and extra expense provisions of commercial property policies have largely been denied leaving little to cede to reinsurers, that is not the case under other lines of business including event cancellation and travel insurance coverages. Moreover, in the United Kingdom and in the EU, business interruption claims have been allowed under certain policy forms, which has led to reinsurance cessions.

My colleague Curtis Leitner asked me to co-author an article with him discussing the possibility of aggregating COVID-19 losses using follow-the-fortunes and related principles. I gladly admit that Curtis did the heavy lifting on this one from an analytical point of view. We published the article in the ARIAS Quarterly, Q1 2022. We hope you enjoy the article.

Leitner-Schiffer-COVID-19-Aggregation-Follow-Article-Q1-2022Download

Courts Continue to Order Production of Reinsurance Information

Photo by Pixabay on Pexels.com

Parties routinely seek reinsurance information in insurance coverage cases and the courts routinely allow those requests to go forward. Yes, each case is different and each request is different and the reinsurance information may be different as well so drawing a general conclusion is fraught with danger. Nevertheless, two recent cases continue the trend of requiring production of reinsurance information.

Continue reading “Courts Continue to Order Production of Reinsurance Information” →

Systemic Event Reinsurance

In my latest IRMI.com Expert Commentary-Reinsurance, I discuss a lesser known reinsurance product called systemic event reinsurance. You can read the commentary here.

COVID-19 and Insurance Premiums

Photo by Karolina Grabowska on Pexels.com
Click Here for Podcast

The COVID-19 pandemic has brought about myriad issues including whether there is insurance coverage for losses allegedly caused by the virus and its collateral effects. In the United States, insurance companies have been largely successful in avoiding coverage in the majority of disputes over whether commercial property policies provide coverage under business income and extra expense provisions for COVID-19 losses. That is because most commercial property policies require direct physical loss or damage to property for coverage to apply.

To avoid the issue of alleging and proving direct physical loss, one insured took a different tactic. It argued that it was being overcharged its insurance premium because its exposure to loss was much lower due to COVID-19. An interesting and novel approach.

Continue reading “COVID-19 and Insurance Premiums” →

Prior Arbitration Precludes Law Suit Ruling Upheld on Appeal

Photo by cottonbro on Pexels.com
Listen to Post Here

Back on May 27, 2021, I wrote about a collateralized reinsurance dispute where the reinsurer sued the cedent in New York state court claiming that provisions of a trust agreement relieved the reinsurer of any further liability to the cedent. See Reinsurer’s Claims Precluded By Prior Arbitration Award. The motion court granted the cedent’s motion to dismiss the complaint and now that decision has been affirmed on appeal.

Continue reading “Prior Arbitration Precludes Law Suit Ruling Upheld on Appeal” →