'Following Form' Provision Allows Insurer to Challenge Claim

HOUSTON - In a non-reinsurance case, a Texas federal judge ruled that a "following form" provision, unlike a "follow the fortunes" provision, does not require an excess insurer to automatically follow a primary insurer's coverage decisions. American Home Assurance Co. v. Oceaneering International Inc., No. H-06-2105 (S.D. Texas).

In a May 22 order, Judge Nancy F. Atlas of the U.S. District Court for the Southern District of Texas ruled that the provision obligates the excess insurer to pay for losses "as insured" rather than "as paid" by the primary coverage.

In 2002, Okeanos Gas Gathering Co. was granted permission by …