La. Federal Judge Refuses to Dismiss Subrogated Insurer’s Complaint Against Reinsurers

NEW ORLEANS — A Louisiana federal judge has refused to dismiss a subrogated insurer’s third-party complaint against another insurer and its reinsurers in a property coverage action, ruling that there are questions of fact as to whether the insurer was a “fronting company,” leaving the reinsurers liable for the damages.

In a Nov. 18 order, Judge Carl Barbier of the U.S. District Court for the Eastern District of Louisiana explained that if the defendant insurer is a fronting company, the subrogated insurer’s third-party complaint is permissible under the Louisiana Direct Action Statute.

This case arises out of an alleged allision …