Reinsurer Not Obligated to Pay Insured's 'Cash Call' Before Payment Is Submitted

NEW YORK - In an asbestos case, a New York state court has ruled that a reinsurer's obligation to indemnify its reinsured is not triggered until a plaintiff has made payment to its insured and submits proof of loss under a settlement agreement. Atlanta International Insurance Co. v. CGU Insurance, No. C605236-99 (N.Y. Sup. Ct., N.Y. Cty.).

The New York County Supreme Court concluded in its decision that defendant CGU Insurance could not be held to the terms of a settlement agreement between plaintiff Atlanta International Insurance Co. and its insured, asbestos defendant Rapid American Corp., because CGU had not …