Breach of Contract Claim to Proceed Against Liberty National in Assumption Reinsurance Dispute

TULSA, Okla. — An Oklahoma federal judge has allowed a breach of contract claim to proceed against Liberty National Insurance Co. in a dispute over whether the insurer is liable to a policyholder under a reinsurance and assumption agreement.

On Nov. 12, Judge Claire V. Eagan of the U.S. District Court for the Northern District of California explained that although assumption reinsurance transfers direct liability under the policy, the ceding company remains liable unless there has been a novation substituting the reinsurer for the ceding company. In this case, Liberty failed to present evidence that such a novation exists, …