Munich Re Seeks Stay of Discovery in $1.9 Million Action Pending Ruling on Bad Faith Claims

MONTGOMERY, Ala. — Munich Reinsurance America Inc. has asked an Alabama federal judge to stay discovery in a $1.9 million reinsurance action filed against it by a non-profit public insurer, pending the court’s ruling on its motion to dismiss the bad faith claims.

In a July 14 motion, Munich Re argues that Alabama state law does not recognize a tort of bad faith for failure to pay reinsurance claims. The state has not extended the limited tort of bad faith to reinsurance contracts, the reinsurer contends, and the Alabama Supreme Court has routinely rejected attempts to broaden the application of …