Reinsurance programs are often complex and the calculation of
reinsurance premiums can be confusing. Periodically, a reinsured
will review its reinsurance premium transactions to make sure that
it has not been overpaying for its reinsurance protection. Where a
third-party premium audit company is used for that review,
compensation is usually based upon a percentage of the savings
found on the reinsurance premiums. In a recent case, a reinsured
hired a third-party auditor who produced a report indicating a
significant over-payment of reinsurance premium. Ultimately, the
reinsured rejected the report and continued calculating the
reinsurance premium based on the methodology used by its
reinsurance intermediary. Suffice it to say that the audit company
was less than pleased and, when the reinsured refused to pay the
audit company, sued the intermediary for tortious interference with
the contractual relationship between the audit company and the
reinsured. As the discussion
