What happens when, after a reinsurance arbitration over how the
ceding company billed the reinsurer is resolved in the
reinsurer’s favor with a final award confirmed by the court,
the ceding company rebills the reinsurer for the same losses (but
differently than the way it did during the prior arbitration)? If
the reinsurer again denies the billing, is the dispute subject to
arbitration or is it precluded by the court’s judgment
confirming the prior arbitration award? That is the issue addressed
by a Massachusetts federal court.
In Certain Underwriters at Lloyd’s, London v. Century
Indemnity Co., Nos. 18-cv-12041, 19-cv-11056, 2020 U.S. Dist.
LEXIS 39242 (D. Mass. Mar. 6, 2020), a dispute arose over the
billing of molestation losses. After settling with its insured, the
cedent allocated all of the molestation claim payments to the
policy in effect at the time of the first act of molestation as
agreed in the settlement agreement and then accumulated the
payments
