Complex corporate structures and internal reinsurance
relationships can complicate legacy reinsurance relationships. This
is especially true where the underlying losses are long-tail
liabilities and where companies have changed, merged, combined and
succeeded each other. A key question for any legacy reinsurance
treaty is whether the losses now being ceded come within the scope
of the reinsurance treaty. In a recent case, a federal court had to
address a situation where ceded asbestos losses arose from policies
issued by one company in a corporate group, but where the original
policy issuing company was not a signatory to the reinsurance
treaty.
In TIG Insurance Co. v.
American Home Assurance Co., No. 18-cv-10183 (VSB), 2020
U.S. Dist. LEXIS 22639 (S.D.N.Y. Feb. 7, 2020), certain members of
an insurance group demanded arbitration against a reinsurer
(successor in interest) for the reinsurer’s alleged failure
to pay its share of asbestos losses arising out of
