"The Reinsurance 'Cut-Through' Provision – No Privity, No Problem," by Michael A. Conlon

[Editor’s note: Mr. Conlon is an attorney in the Chicago office of Tressler LLP. His practice is focused primarily on litigation and arbitration of insurance coverage and reinsurance matters throughout the country. He can be reached at [email protected]. Copyright 2014, Michael A. Conlon.]

Reinsurers will do well to maintain a defined role in the reinsurance relationship, because as one reinsurer recently discovered the hard way, overstepping boundaries may lead to multi-million dollar consequences in the form of a direct action brought by the policyholder.

In the reinsurance setting, contractual privity typically exists only between a ceding insurer and its …