ACE Breached Policy's Consent-To-Settle Provision, Federal Judge Rules

NEW YORK - Continental Insurance Co. is not required to reimburse ACE Insurance Co. for an underlying settlement because ACE breached the policy's consent-to-settle provision by failing to obtain prior written consent from Continental. Continental Casualty Co. v. ACE American Insurance Co., No. 07-958 (S.D. N.Y.).

U.S. District Judge Paul A. Crotty of the U.S. District Court for the Southern District of New York ruled that ACE entered into a valid and binding settlement agreement with its insured, Pilgrim's Pride Corp., before seeking Continental's consent to enter into such an agreement.

In July 1999, Continental agreed to provide coverage to …