Cap in Reinsurance Certificates Applies to Loss and Expenses Combined, N.Y. Federal Judge Rules

NEW YORK — The dollar amount stated in the “reinsurance accepted” section of reinsurance certificates issued to Century Indemnity Co. caps the maximum amount that the reinsurer is obligated to pay for combined loss and expenses, a New York federal judge has ruled.

On Aug. 15, Judge Lorna G. Schofield of the U.S. District Court for the Southern District of New York relied heavily on the 2nd Circuit’s ruling in Bellefonte Reinsurance Co. v. Aetna Cas. and Sur. Co. that the reinsurers' total liability for both loss and expenses was capped at the dollar amount stated in the "reinsurance accepted" …