A United States District Judge dismissed RICO claims asserted against GenRe by the Insurance Commissioners of Tennessee and Virginia in an MDL action relating to the liquidation of Reciprocal of America and various risk retention groups, due to the failure to adequately plead reliance. In re Reciprocal of America Sales Practices Litigation, case no., MDL 04-1551 (June 12, 2006). The claims alleged that GenRe provided illusory reinsurance, under which it did not assume substantial risk.
SPECIAL FOCUS: introduction
SPECIAL FOCUS entries are longer entries that address a topic that has been the subject of a number of court opinions, or which are otherwise of special interest. SPECIAL FOCUS entries treat multiple cases or news items in a single entry. We hope that you find these special items to be interesting and informative.
Court clarifies relationship between two arbitration awards
In The Burlington Ins. Co. v. Trygg-Hansa Ins. Co., Case no. 1:99cv00334, in the United States District Court for the Middle District of North Carolina (May 16, 2006), the Court was asked to clarify the relationship between two arbitration awards. The Court found, after asking the arbitration panel for the second award for clarification, that the first award had been factored into and setoff within the second award.
Court of Appeals vacates summary judgment, finding reinsurance agreements ambiguous
The United States Court of Appeals for the Second Circuit vacated orders entered granting Republic Insurance Company summary judgment interpreting facultative reinsurance certificates, finding that the provisions regarding when definitive statement of loss were required to be submitted were ambiguous, requiring consideration of extrinsic evidence and resolution of the ambiguity by a trier of fact. Folksamerica Reinsurance Co. v. Republic Ins. Co., Case No. 04-2716 (May 26, 2006).
Denial of request to vacate arbitration award due to denial of continuance of final hearing affirmed
In a non-reinsurance case, the United State Court of Appeals for the Fifth Circuit affirmed a District Court decision denying a request to vacate an arbitration award, which was based upon the contention that the arbitration panel committed misconduct by denying a request for a continuance of the final hearing that was submitted the day before the scheduled hearing. Laws v Morgan Stanley, 2006 WL 1579542, case no. 05-20626 (5th Cir. Je. 9, 2006).