Judge Orders Employers to Pay $1.4 Million in Prejudgment Interest

KANSAS CITY, Mo. - A federal judge has ordered Employers Reinsurance Corp. to pay $1.4 million prejudgment interest on reinsurance proceeds that it withheld for two years from a cedent, ruling that the sum owed and the length of time the cedent was deprived of the money constitutes wrongful withholding. Employers Reinsurance Corp. v. Massachusetts Mutual Life Insurance Co., No. 06-0188 (W.D. Mo.).

On Aug. 19, Chief Judge Fernando J. Gaitan Jr. of the U.S. District Court for the Western District of Missouri calculated the interest using the constant maturity Treasury rate rather than the higher Connecticut statutory rate of …