Commutations May be Used to Establish Prejudice Under Late Notice Defense, N.Y. Federal Judge Rules

UTICA, N.Y. — Commutations may be used to establish prejudice under a late notice defense if a reinsurer can show that it suffered economic injury resulting from a cedent’s late notice, a New York federal judge has ruled.

Judge David N. Hurd of the U.S. District Court for the Northern District of New York denied Utica Mutual Insurance Co. summary judgment on Fireman’s Fund Insurance Co.’s late notice defense, ruling that if the reinsurer can establish that it was prejudiced by Utica’s late notice, it will be completely relieved of its obligation to indemnify Utica under certain reinsurance certificates.

The …