Reinsurance Redux - August 2012


In This Issue:

- Texas Supreme Court Holds that Stop-Loss Insurance is Not Reinsurance, but Rather, is Direct Health Insurance Subject to Regulation under the State Insurance Code:

The Texas Supreme Court reversed the judgment of the state’s Court of Appeals, holding that, as a matter of law, stop-loss insurance sold to a self-funded employee health benefit plan is not “reinsurance,” but rather, “direct insurance” subject to regulation under the Insurance Code. Texas Dep’t. Ins. v. Am. Nat’l Ins., No. 10-0374, 2012 WL 1759457 (Tex. May 18, 2012). PAGE 2

- United States Court of Appeals for the Second Circuit Affirms District Court’s Unpublished Opinion that a Surety Bond Holder Did Not Enjoy Cut Through Rights to Reinsurance:

The United States Court of Appeals for the Second Circuit affirmed a District Court’s unpublished decision, holding that the reinsurance agreement at issue did not offer any third-party right to recovery from a surety bond reinsurer. Callon Petroleum Co. v. Nat’l Indem. Co., No. 11-241, 2012 WL 2549500 (2d Cir. July 3, 2012). PAGE 3

- United States District Court for the Eastern District of Pennsylvania Grants Petition for an Arbitration Award in a Reinsurance Dispute, Finding that the Court Had Not Received Opposition to the Confirmation:

The United States District Court for the Eastern District of Pennsylvania granted a petition to confirm an amended arbitration award of $7,957.88 in a reinsurance dispute, finding that the court had not received any opposition to the confirmation. Aurum Asset Managers, LLC v. Banco Do Estado Do Rio Grande Do Sul, No. 08-mc-00102 (E.D. Pa. June 26, 2012). PAGE 4

Please see full publication below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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