Continental Insurance Accuses TIG of Breaching Facultative Certificates in Federal Lawsuit

LOS ANGELES — Continental Insurance Co. (CIC) has sued TIG Insurance Co. in California federal court, accusing it of breaching a facultative reinsurance contract by refusing to pay toward the settlement of environmental contamination claims filed against CIC’s policyholder.

In a May 15 complaint filed in the U.S. District Court for the Central District of California, CIC notes the reinsurance certificate provides that “all claims, involving this reinsurance, when settled by the CIC, shall be binding on TIG, which shall be bound to pay its proportion of such settlements.”

In addition, the reinsurance certificate requires TIG to pay CIC …