STORY FROM: Reinsurance & Arbitration
Reinsurer’s Obligation to Pay Defense Costs Not Capped, N.Y. Federal Judge Rules
March 4, 2020
NEW YORK — Global Reinsurance Corporation of America’s obligation to pay defense costs to its cedent, Century Indemnity Co., is not capped when the reinsurer pays losses, a New York federal judge has ruled following an evidentiary hearing.
In a March 2 order, Judge Lorna Schofield of the U.S. District Court for the Southern District of New York held that the plain and unambiguous meaning of the reinsurance certificates is that the dollar amount stated on those certificates caps indemnity payments and also caps expense payments when there are no losses, but does not cap expense payments when there are ...
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