Patton Boggs Reinsurance Newsletter - March 2013: A Brief Review of Reinsurance Trends in 2012: Antitrust

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In 2012, New York's highest court dismissed a state law antitrust claim against Equitas. In its decision in Global Reinsurance Corp. - U. S. Branch v. Equitas Ltd., 969 N. E. 2d 187 (N. Y. 2012), the New York Court of Appeals held that New York's antitrust law, known as the Donnelly Act, Gen. Bus. Law § 340, could not be used to assert claims by a New York branch of a German reinsurer against Equitas. The underlying dispute involved retrocessional claims issues and the requirements that Equitas put in place to document and examine claims prior to paying retrocessional claims. The retrocedent commenced arbitration against Equitas under various reinsurance agreements, but also brought this action under the Donnelly Act claiming that Equitas' claims handling practices amounted to a suppression of competition in the marketplace.

In reversing the intermediate appellate court's reinstatement of the complaint, the Court of Appeals reinstated the motion court's order dismissing the complaint. Although the substance of the case is not a reinsurance issue, for reinsurers interested in state law antitrust issues, this is an opinion worth noting