MASSACHUSETTS HIGH COURT HOLDS THAT CLAIMS UNDER FOLLOWING FORM EXCESS POLICIES ARE NOT COVERED BY FOLLOW-THE-FORTUNES
Massachusett's Supreme Judicial Court recently held, in a case of first impression, that a following form excess insurer is not bound by claims payment decisions made by a primary insurer, in an analysis that is akin to the reinsurance follow-the-fortunes doctrine. The Court held that although such an excess policy borrows language from the underlying primary policy, it is a separate insurance policy, and that the excess insurer retains the right to make its own claims decisions absent a provision in its policy to the contrary. This is similar to opinions holding that courts will not imply the follow-the-fortunes doctrine into a reinsurance agreement if it is not explicitly a part of the reinsurance agreement's written terms. Allmerica Financial Corp. v. Certain Underwriters at Lloyd's, London, No. SJC-09834 (Aug. 6, 2007).
