Addendum to Reinsurance Agreement Valid, Texas Court Affirms

FORT WORTH, Texas - An addendum to a reinsurance agreement that increased a reinsurance intermediary's commission was valid, despite the fact that it was not approved by the cedent, a Texas appellate court has affirmed. Arch Reinsurance Co. v. Underwriters Service Agency Inc., No. 02-10-365 (Texas App. Ct., 2nd Dist.).

On April 26, the Texas Court of Appeals, 2nd District, ruled that approval by the cedent was not required because the addendum did not adversely affect the cedent in any way.

Arch Reinsurance Co. entered into a quota share reinsurance agreement and agency agreement under which Arch agreed to reinsure …