Reinsurer Says Follow-The-Fortunes Should Not Be Implied

KANSAS CITY, Mo. - In a Missouri federal court battle, Employers Reinsurance Corp. (ERC) argues that follow-the-fortunes should not be implied into an excess disability income reinsurance treaty Employers Reinsurance Corp. v. Massachusetts Mutual Life Insurance Co., No. 06-0188 (W.D. Mo.).

In a July 28 brief, ERC argues that the treaty's prompt notice and joint participation clauses preclude such an implication. The case is pending before Chief Judge Fernando J. Gaitan Jr. of the U.S. District Court for the Western District of Missouri.

ERC issued the treaty to Connecticut Mutual Life Insurance Co., under which ERC agreed to reinsure a …