A Florida Court of Appeal has affirmed a summary judgment in favor of a reinsurer arising out of the partial assignment of the underlying insurance policy as security for a loan, where the reinsurer paid the insured $8 million for a fire loss, ignoring the recorded assignment. Banco Ficohsa v. Aseguradora Hondurena, S.A., – So.2d -, 2006 WL 1999368 (Fla. 3rd DCA July 19, 2006) (slip opinion). Carlton Fields represented Banco Ficohsa in the appeal of this case.
Arbitration / Court Decisions
UK – broker may assert lien for unpaid reinsurance premium
Under UK law, a reinsurance broker may assert a lien over claim proceeds for premiums for reinsurance coverage paid by the party's broker, but not reimbursed by the reinsured. Heath Lambert Ltd. v. Sociedad de Corretaje de Seguros, [2006] EWHC 1345 (June 9, 2006).
Judge finds ambiguity as to whether two reinsurance agreements provide for a single or an annual aggregate limit
Cross motions for summary judgment were denied in Professional Consultants Insurance Co. v. Employers Reinsurance Co., Case No. 1:03-cv-216 (D. Vt. March 28, 2006), where the Court found that two reinsurance agreements covering professional liability policies were ambiguous as to whether the reinsurance provided an aggregate annual, or a per-policy, limit on the liability of the reinsurer. This case settled and was dismissed in June 2006. Professional Consultants Insurance Company v. Employers Reinsurance Company, 2006 WL 751244 (D. Vt. March 8, 2006) (slip opinion).
Denial of pre-pleading security is appealable in Connecticut
The Connecticut Supreme Court, reversing a decision of the Connecticut Appellate Court that found the issue not to be appealable, has found that the denial of a motion for pre-pleading security in a case brought by Hartford against unauthorized reinsurance companies was an appealable final judgment. The Supreme Court remanded the case for consideration of the merits of the appeal by the Court of Appeal. Hartford Accident and Indemnity Co. v. Ace American Reinsurance Co., – A.2d -, 2006 WL 1982910 (Ct. July 25, 2006) (slip opinion).
Arbitration award confirmed over disputes as to discovery and arbitrator bias
A District Court confirmed an arbitration award in a non-reinsurance context in Lebeau v. Oppenheimer & Co., rejecting contentions that the award should be vacated because, inter alia, the arbitrators did not allow sufficient discovery, did not adequately disclose conflicts and demonstrated bias. One interesting finding is that under the Federal Arbitration Act, one may waive such objections by raising them for the first time in the context of motions to confirm or vacate a later award, rather than raising them in the arbitration, at the time of the alleged misconduct. Lebeau v. Oppenheimer & Co., Case No. 05-5876 (USDC E.D. Pa. June 23, 2006).