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Reinsurance Litigation, Arbitration & Counseling

Reinsurance Updates

Overview:  Steptoe’s Reinsurance Group regularly represents cedents, reinsurers, and retrocessionaires in high-profile arbitrations and litigation involving the full range of reinsurance issues in the United States, Europe, Bermuda, and China.  We also focus on the regulatory and legislative aspects of the reinsurance industry, as well as a wide variety of corporate matters, inclusive of transactional work pertaining to the purchase and sale of large blocks of risk. 

Scope of Work:  Our work covers multiple lines and classes of reinsurance, broadly encompassing both life & health and property & casualty matters, as well as “specialty lines,” inclusive of financial reinsurance.  By way of example, Steptoe has represented clients in disputes over specific and aggregate medical stop loss programs, workers’ compensation carve-out programs, surety programs, the sale of closed blocks of life reinsurance, disability income matters, and alternative risk finance programs.  Our representations have involved virtually every major recent issue to sweep through the reinsurance industry including:  London Market Excess (LMX) spiral issues, pharmaceutical liability matters, environmental and asbestos exposures, and brokerage bid-rigging issues affecting the purchase of reinsurance. 

Membership:  Steptoe’s reinsurance lawyers are long-standing members of the major sponsoring institutions that resolve reinsurance disputes, including the Aida Reinsurance and Insurance Arbitration Society (ARIAS), both in the United States and the United Kingdom, as well as the London Court of International Arbitration (LCIA).   

Representative Matters

  • For an insurer, compelled a group of reinsurers to honor their “follow the settlements” obligations on a $100 million resolution of a professional liability claim.
  • Represented pool members in actions arising out of malfeasance by a reinsurance pool manager.  This involved various arbitrations and federal court litigation, resolution of numerous disputes with companies that had ceded business to the pool, and many issues relating to the pool manager’s misconduct.
  • Represented retrocessionaires in multiple arbitrations involving LMX and underpriced workers’ compensation carve-out business ceded by a reinsurer under a multiple-year quota share treaty.  The business had produced losses in excess of $1 billion.
  • For a US cedent, arbitrated claims against a reinsurer over surety and alternative risk transfer (ART) business.  US and UK counsel worked jointly to arbitrate $100 million of claims in the LCIA.
  • On behalf of several reinsurers, obtained an arbitration award rescinding a very large block of workers’ compensation carve-out business.  The business had been written in Bermuda by a Managing General Underwriter (MGU) that the panel determined did not have authority to write that business for a cedent.
  • Secured an arbitration award compelling a retrocessionaire to bear its share of liabilities.  The retrocessionaire had challenged its liability based on the quality of the underwriting that had been done by the reinsurer’s agent.
  • Counseled major reinsurers in a multi-million dollar antitrust brokerage bid-rigging/steering case, the largest insurance antitrust proceeding by private plaintiffs attempted in the US.
  • Successfully voided reinsurance agreement in its entirety due to material non-disclosures by cedent at point of cession in a $300 million dollar action for rescission of a reinsurance contract between an Irish reinsurer and Barbadian cedent.
  • Served as transaction counsel on reinsurance issues associated with a joint marketing venture involving co-branding of health products.

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