Munich Re Moves to Dismiss Cedent’s Bad Faith Claims in Ala. Federal Action

MONTGOMERY, Ala. — Munich Reinsurance America Inc. has moved to dismiss bad faith claims in a $1.9 million reinsurance action filed by an Alabama non-profit public insurer, arguing that state law does not recognize a tort of bad faith for failure to pay reinsurance claims.

In a June 3 motion filed in the U.S. District Court for the Northern District of Alabama, Munich Re noted that the state has not extended the limited tort of bad faith to reinsurance contracts, and the Alabama Supreme Court has routinely rejected attempts to broaden the application of the tort.

Alabama Municipal Insurance …