Policyholder May Not Directly Sue for Breach of Contract

ALEXANDRIA, La. - In an $800,000 action, a Louisiana federal judge has ruled that a policyholder does not have standing to directly sue a reinsurer for breach of contract because the reinsurance contract did not contain a cut-through provision. LaSalle Parish School Board v. Allianz Global Risks U.S. Ins. Co. (No. 1:07-cv-00399 (W.D. La.).

In an April 24 opinion, Judge Dee D. Drell of the Western District of Louisiana dismissed the breach of contract claim, but allowed claims of detrimental reliance and negligent misrepresentation to proceed against the reinsurer and its claims adjuster.

The LaSalle Parish School Board was …