Cedent May Combine Indemnity, Defense Expenses in Reinsurance Billings, Wis. Federal Judge Rules

MADISON, Wis. — Employers Insurance Company of Wausau was entitled to combine indemnity and defense expenses in billing R&Q Reinsurance Co. for an asbestos settlement under a facultative reinsurance certificate, a Wisconsin federal judge has ruled, finding the certificate does not exclude defense expenses from the meaning of “settlement.”

In a May 16 order, Judge Barbara B. Crabb of the U.S. District Court for the Western District of Wisconsin noted that R&Q failed to explain how Wausau’s position is inconsistent with the terms of the certificate.

R&Q issued two one-year facultative reinsurance certificates to Wausau, effective Oct. 1, 1981, to …