Insured May Not Proceed Directly Against Reinsurer, Federal Judge Rules

PHILADELPHIA - A Pennsylvania federal judge on Sept. 16 ruled that the lack of a cut-through clause in a reinsurance contract prevents a policyholder from bringing breach of contract and bad faith claims against a reinsurer. Brand v. AXA Equitable Life Insurance Co., et al., No. 08-2859 (E.D. Pa.).

On Sept. 16, Chief Judge Harvey Bartle III of the U.S. District Court for the Eastern District of Pennsylvania ruled that the policyholder cannot proceed directly against Centre Life Insurance Co. or a claims administrator because he is not a third-party beneficiary of the reinsurance or claims administration contracts.

In …