Commentary on insurance and reinsurance disputes and related issues and the website of Schiffer Law & Consulting PLLC
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, 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.
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”
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”
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”
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”
Communications between an insurance carrier and its reinsurers may or may not be protected by privilege and may or may not be further protected by the common interest doctrine. The analysis is fact-specific, but important where reinsurance communications are sought in litigation. In a recent case, a New York federal court upheld an insurer’s withholding of reinsurance communications based on both work-product privilege and the common interest doctrine.
Continue reading “Common Interest Doctrine Prevails in Disclosure Dispute”
Most reinsurance contracts have a provision that allows the reinsurer to inspect or audit the books and records of the cedent or the cedent’s agent. The reasons behind this provision are obvious. The reinsurer needs to know if premiums or losses are being booked and handled correctly given that the reinsurer is indemnifying the cedent for losses under the insurance policies ceded to the reinsurance contract. Where an agents like MGAs or TPAs are involved, audits are even more important because of the third-party nature of the arrangement and because of commission and profit sharing provisions.
The scope of the right to inspection, however, differs by clause. Some inspection clauses are very detailed and some are cursory statements of an audit right. Some restrict rights and some are expansive. As in most cases, the parties only get the rights that they bargained for and included in the reinsurance contract.
In a recent Texas case, a reinsurer brought suit over its right of inspection of the cedent’s managing general agent’s files.
Continue reading “How Far Does a Reinsurer’s Right to Inspect Records Go?”
Some reinsurance disputes repeat. Either they involve different reinsurers on the same contract or different reinsurers on the same claim or different reinsurers on similar contracts on the same basic issue. Where a cedent loses an arbitration on an issue that repeats in a subsequent reinsurance dispute, should the cedent be estopped from seeking a reinsurance recovery from the other reinsurer? A Michigan federal court recently addressed this issue.
Continue reading “Cedent Denied Second Bite at the Apple in Dispute Over Reinsurance Coverage”
It’s been a while since there has been a court opinion on the defense of late notice in a reinsurance dispute. Recently, a Texas federal court had the pleasure of addressing the issue.
Continue reading “Cedent Wins Late Notice Dispute”
