Insurer, Munich Re Battle Over Reinsurance for Underlying Defense Costs

MONTGOMERY, Ala. — An Alabama municipal insurer and Munich Reinsurance America Inc. are battling over reinsurance coverage for nearly $450,000 in defense costs incurred by the insurer in defending an underlying action filed against one of its policyholders.

In its Sept. 16 opposition to Munich’s motion for summary judgment, Alabama Municipal Insurance Corp. says its retainer of outside counsel was necessary due to the complexities of the case, and that the law firm had to employ a costly “multi-pronged defense strategy” that resulted in a favorable outcome.

Munich Re, however, says AMIC was not allowed to cede expenses that were …