Stonewall Files $1.6 Million Reinsurance Action against XL Re; Seeks Coverage for UNOCAL Settlement

BOSTON — Stonewall Insurance Co. has sued XL Reinsurance America Inc. for $1.6 million in reinsurance proceeds for the underlying settlement of environmental claims asserted against Union Oil Company of California.

The Sept. 25 complaint filed in the U.S. District Court for the District of Massachusetts says the facultative reinsurance contracts at issue preclude XL from second-guessing Stonewall’s settlement decisions.

According to the suit, Stonewall issued various insurance policies to the Union Oil Company of California, including an excess policy (Policy No. 13272), which was effective Nov. 11, 1975, to Nov. 11, 1976.

XL’s predecessor, The North American …