In my latest IRMI Expert Commentary on Reinsurance I discuss reinsurance security and what can go wrong. You can read the commentary at IRMI.com here (you may need to create a log in to read the commentary).
Some Thoughts on Reinsurance Security
Category: Law
When Collateral Transactions Go Awry
Many reinsurance agreements require that the reinsurer provide security for the reinsurance obligations arising from the reinsurance transaction. There are many ways security may be provided. One method is establishing a trust account to hold collateral backing up the reinsurance obligation. Where the collateral is held, how it is used and who manages the collateral in the trust account is critical to maintaining viable security for the reinsurance obligations.
In a case brought in New York federal court, a cedent in a coinsurance treaty with an off-shore reinsurer, found itself without the security that it thought it contracted for.
Continue reading “When Collateral Transactions Go Awry”The Difficulty With Sealing Documents
In several blog posts I have discussed efforts to seal arbitration awards and arbitration materials in court proceedings to confirm or vacate an arbitration award. But that is not the only circumstance where a party will ask the court to seal purportedly confidential or proprietary documents. In motion practice, particularly motions for summary judgment, information and exhibits may be filed under seal because of alleged confidentiality or because the documents contain allegedly sensitive business information that could put the party at a competitive disadvantage.
In a recent case, a party moving for summary judgment sought to seal documents in a variety of categories, including reinsurance-related documents. Given the court’s hesitancy to seal documents from the public, can you guess the outcome?
Continue reading “The Difficulty With Sealing Documents”Arbitration Award Confirmed Despite Recapture
Confirming an arbitration award is straightforward, but what about confirming an arbitration award in a yearly renewable term life reinsurance dispute even after the business is recaptured?
Continue reading “Arbitration Award Confirmed Despite Recapture”Louisiana Federal Court Sort of Grants Reinsurance Discovery in Hurricane Loss Coverage and Bad Faith Action
Policyholders regularly ask for discovery of reinsurance information. Courts are regularly allowing it, but there are limitations as you will see from this Louisiana federal court decision from earlier in 2024.
Continue reading “Louisiana Federal Court Sort of Grants Reinsurance Discovery in Hurricane Loss Coverage and Bad Faith Action”Reinsurance Information Up For Grabs
Reinsurance information, be it reinsurance contracts, communications with ceding insurers and their reinsurers, broker communications or other related information, is frequently sought in coverage and personal injury litigation. In my latest IRMI.com Expert Commentary on Reinsurance I explore this issue once again, updating an earlier commentary. You can read the article on IRMI.com after registering for access, here.
Louisiana Federal Court Compels Arbitration Over Hurricane Property Damage Losses
Commercial property insurance policies written in hurricane-prone jurisdictions often contain arbitration clauses. Can a policyholder avoid arbitration and bring breach of contract claims into court instead? Earlier this year, a Louisiana federal court said no.
Continue reading “Louisiana Federal Court Compels Arbitration Over Hurricane Property Damage Losses”Reinsurer Wins Summary Judgment on Question of Number of Wrongful Acts
Traditional reinsurance programs tend to cover a cedent’s underlying policies over many years. Although a long-term relationship may exist, typically the reinsurance only covers policies or claims within a particular policy year. If, in those circumstances, the reinsurance attaches over a retention, then losses incurred in different policy years generally are subject to separate retentions, which could limit the reinsurance recovery if the claims arise out of the same dispute. If, however, the underlying losses constitute a single wrongful act, then perhaps only one retention is required. The number of retentions may make the difference between a limited reinsurance recovery and a more substantial reinsurance recovery. A recent case addressed this issue.
Continue reading “Reinsurer Wins Summary Judgment on Question of Number of Wrongful Acts”US Supreme Court Clarifies That Courts Decide What Contract Governs Dispute
The US Supreme Court has had a busy term deciding arbitration issues. In a second opinion in a matter of a week, the Court has addressed another arbitration issue that could affect insurance and reinsurance disputes. This time, the issue was conflicting contracts.
Continue reading “US Supreme Court Clarifies That Courts Decide What Contract Governs Dispute”US Supreme Court Clears Up the Stay/Dismissal Circuit Split
For some time, there has been a federal circuit split on whether a district court may dismiss a case where a dispute is subject to arbitration under section 3 of the Federal Arbitration Act (“FAA”) and one of the parties asks the court to stay the action pending arbitration rather than dismiss the proceeding. That question has now been answered by a unanimous Court.
Continue reading “US Supreme Court Clears Up the Stay/Dismissal Circuit Split”