Granite State Cannot Recover on $4.4 Million Reinsurance Claim Due to Late Notice, 2nd Cir. Affirms

NEW YORK — Granite State Insurance Co.’s failure to provide prompt notice of a $334 million settlement of asbestos claims to its reinsurer, Clearwater Insurance Co., bars its $4.5 million reinsurance claim, a federal appellate court has affirmed, ruling that Clearwater was not required to show that it was prejudiced by the late notice.

On April 2, the 2nd Circuit U.S. Court of Appeals found the trial court did not err in interpreting Illinois reinsurance law as containing a “no prejudice” rule.

Granite State had issued McGraw Edison Co. two one-year excess of loss policies, in effect from 1980 to …