In late 2017, the New York Court of Appeals, in Global Reinsurance Corp. of Am.
v. Century Indemn. Co., 30 N.Y.3d 508 (2017), provided
guidance to the Second Circuit Court of Appeals on how New York law
interprets reinsurance contracts and, in particular, the stated
limits in facultative certificates and whether those stated limits
are presumptive caps on the facultative reinsurer's
liability. That guidance is evident in a recent case decided
by the Second Circuit Court of Appeals in yet another dispute over
facultative coverage for asbestos settlement liabilities.
In Utica Mutual Ins. Co. v.
Clearwater Ins. Co., Nos. 16-2535, 16-2824, 2018 U.S. App.
LEXIS 165110 (2d Cir. Sep. 25, 2018), the circuit court followed
the New York Court of Appeals' guidance in
Global and vacated judgment for the cedent and
remanded the case back to the district court. On remand, the
district court is to determine whether the facultative reinsurer is
obligated to cover the
