Cedent Did Not Manipulate Allocation to Hit Excess Level, Court Affirms

PHILADELPHIA - A federal appellate court has affirmed that Travelers Casualty and Surety Co. did not manipulate the allocation of the settlement of breast implant and chemical claims in order to recover reinsurance proceeds. Travelers Casualty and Surety Co. v. Insurance Company of North America, Nos. 06-4100, 06-4101, 07-4690, 08-1032 (3rd Cir.).

On June 9, the 3rd Circuit U.S. Court of Appeals further affirmed, however, that Travelers allocated more to the policies reinsured by Insurance Company of North America than was reasonably allowed by the policy limits, and it reduced INA's liability accordingly. In addition, the appellate court remanded the …