Insurer’s Breach of Contract Claim Proceeds in Dispute over Reinsurance Trust Account

SACRAMENTO, Calif. — A California federal judge has refused to dismiss an insurer’s breach of contract claim accusing an investment company of refusing to allow it to withdraw proceeds from a reinsurance trust account for the purpose of paying claims made under vehicle service contracts.

In an April 12 order, Judge John A. Mendez of the Eastern District of California ruled that Protective Property & Casualty Insurance Co. has adequately pled a claim for breach of contract against Cal Capital Ltd.

In June 2008, Cal Capital entered into a trust agreement with Chesterfield International Reinsurance Ltd., under which Chesterfield was …