LLR: Insurance & Reinsurance

Practice and procedure - Jurisdiction - Service of writ outside the jurisdiction - Derivative claims -”Good arguable case” - Reinsurance-led environmental impairment liability pool covering United States risks - Disastrous losses resulting in complex disputes between parties - Litigation in England and United States between pool participants - Leave to serve writ granted by judge - Appeal -Whether appellate court should interfere with lower court’s order - Principles to be applied by appellate court - RSC Order 11, r 1.

Insolvency - Non-payment of claims by reinsurer - Winding-up petition by reinsureds - Reinsureds’ refusal to permit inspection under right of inspection and notice of loss clauses in treaty until outstanding claims paid - Whether debt disputed by reinsurer in good faith and on substantial grounds - Whether injunction restraining advertisement of petition should be granted.

Cut through - Cause of action - Representation - Reinsurance policy attached to main policy - Policy holder’s claim against reinsurer - Whether “cut through” clause implicit in reinsurance cover note - Payment by insurer “condition precedent” to liability of reinsurer - Effect of representation made by insurer.

Jurisdiction - Claim by Liberian policyholder against reinsurers under reinsurance contract executed in

New York - Whether Liberian law or New York law applicable.

Environmental pollution - United States - Comprehensive general liability policies - Applicability of standard form “accident-based” and “occurrencebased” language - Claims for environmental pollution (release of dioxins and other hazardous chemicals) - Remediation costs, property damage and bodily injury claims by residents of surrounding neighborhoods - Liability of primary and excess carriers.

Product liability - United States -Comprehensive general liability policies - Applicability of “occurrence based” language and war risk exclusion - Claims arising out of injuries sustained by military person nel exposed to Agent Orange while in Vietnam - Settlement of class action - Liability of primary and excess carriers.

Practice and procedure - Representative action - Separate marine insurance policies issued to assured - Claim by assignee of policies - Whether court had power to appoint representative under writer - How court’s discretion should be exercised - RSC Order 15, rule 12.

Jurisdiction - Insurance - Proceedings between London market insurers and German insured - Insured and insurers having comparable bargaining power - Whether proceedings “related to insurance” within Brussels Convention 1968 article 7 - Whether “insurance” confined to insurances for domestic or private purposes - Absence of written choice-of-law clause - Whether article 35 of Accession Convention applicable - Whether insurers obliged to sue German insured in Germany for avoidance of policy or could bring proceedings in England - Whether proper case for service out of jurisdiction - Rules of Supreme Court, Order 11.

Lloyd’s - Corporation - Relationship with Lloyd’s names - Action by names against Corporation of Lloyd’s in respect of underwriting losses - Trial of preliminary issue whether Corporation of Lloyd’s owed statutory or contractual duty towards names ordered by trial judge - Judge’s order reversed by Court of Appeal - Appeal to House of Lords - Effect of letter to Lloyd’s names from underwriting agent - Whether relationship between Corporation of Lloyd’s and Lloyd’s name affected by remarks of member of Committee of Lloyd’s.

Notice - Excess of loss - Prejudice -Second amended complaint by reinsurer against reassured in respect of product liability claims - Whether allegations regarding notice, reassured’s duty to conduct claims reviews and fiduciary duty directly contradicted, ignored and were inconsistent with earlier findings of court and should be dismissed - Whether pleadings insufficient and lacked specificity - Whether court should accede to reinsurer’s request that court grant summary judgment based on conditional concession by reinsurer.

Insolvency - Preference - Letters of credit issued by bank on behalf of reinsurer - Practice of securing letters of credit by certificate of deposit - Purpose of letter of credit to ensure that reassured’s sight drafts against reinsurer were paid - Reinsurer insolvent - Whether liquidator or reassured entitled to proceeds of letter of credit.

Insolvency - Offset - Unpaid premiums -Colorado statute regulating reinsurance business - Whether commissioner authorized to disapprove of right to offset term in reinsurance contracts.

Notice - Late notice - Occurrence “likely to involve.. reinsurance” - Prejudice - Asbestos-related claims - Reinsured aware of likelihood that reinsurance would be involved - Timely notice not given to reinsurer - Whether reinsurer required to show prejudice under New York law.

Jurisdiction - Seisin - Brussels Convention 1968 - Proceedings in Italy and England in disputes between reassured, reinsurers, retrocessionaires and broker arising out of reinsurance programme - - Whether English court or Italian court “first seised” of dispute - Whether English action and Italian proceedings were “related actions” within Brussels Convention 1968 article 22 - Whether reamendments to writ and statement of claim permitted.

Agency - United States - Agents acting for undisclosed London reinsurers exercising option to be associated in defence of claim - Whether contract formed between US primary insurer’s defence counsel and agents.

Insolvency - Defence costs - London reinsurers given option to be associated in defence of any claim or suit - Effect on general rule precluding reinsurer from making payment to insolvent insurer.

Contract - Defence costs - Reinsurers’ option to be associated in defence - Whether reinsurers’ US agents’ assumption of supervision of cases created new contract or new relationship with primary insurer’s defence counsel binding them as agents of reinsurers as partially disclosed principals.

Pleadings - Specificity - Agency - Fiduciary duty - Reinsurer’s failure to allege specific facts from which agency relationship with intermediary could be inferred - Whether failure to state cause of action for fraudulent concealment of facts - Whether trial court abused discretion in terminating litigation.

Practice and procedure - United States -Interrogatories - Fronting insurers’ motion to compel insured and captive reinsurer to provide more complete responses to interrogatories.

Arbitration - Award - Confirmation -”Decision”, signed by umpire only, issued by panel - Later “decision” issued, signed by all members of panel - Whether later award should be affirmed as “majority” decision of arbitrators - Whether panel’s ruling on future enforceability of reinsurance agreements within scope of its review.

Arbitration - Arbitration clause -Construction - Selection of umpire - Treaty’s incorporation by reference of American Arbitration Association Rules of Commercial Arbitration - Applicability to parties’ selection of umpire where one of parties a national or resident of country other than United States.

Insolvency - Reinsurance - Excess of ultimate net loss - Application to dismiss petition to wind-up company - Whether company had shown that petitioner’s claims were bona fide disputed on substantial grounds - Valuation pursuant to order of Bermudan court - Whether a “loss settlement”.

Notice - Prejudice - Asbestos-related claims - New York - Decision by trial court that reinsured excess insurer was late in notifying reinsurer of “any occurrence or accident” - Whether prejudice a necessary factor in reinsurance disputes.