Cedent Urges Court to Allow Claim for Punitive Damages Against Munich Re

LOS ANGELES - Under California law, reinsurers who misapply coverage exclusions and fail to properly investigate claims can be held liable for bad faith in tort, a cedent argues in a dispute over coverage for claims brought against a California city. California Joint Powers Insurance Authority v. Munich Reinsurance America Inc., No. 08-00956 (C.D. Calif.).

In a March 31 opposition brief, California Joint Powers Insurance Authority (CJPIA) asked a California federal judge to reject Munich Reinsurance America Inc.'s motion to dismiss or strike the punitive damages from a bad faith count.

A hearing on the motion is scheduled …