Reinsurance Focus

The National Council on Compensation Insurance, as attorney-in-fact for participating companies of the National Workers Compensation Reinsurance Pool, filed a complaint against AIG alleging that AIG engaged in a fraudulent scheme to avoid paying their proportional share of the insurance costs in the residual market for workers compensation insurance. The parties, unable to agree on several terms of a protective order to govern the exchange of confidential information, turned to the district court to resolve their differences on numerous provisions.

The Court made the following key determinations: First, the ‘inadvertent production’ provision would require the receiving party to ‘return, sequester, or destroy’ the information that the producing party claimed had been inadvertently produced. The Court explained that the 2006 Amendments to Rule 26 added the option of sequestration. Second, the Court acknowledged the need for a two-tier definition of confidentiality (“confidential” and “highly confidential – outside counsel’s eyes only”) but limited “highly confidential” documents to those that “(a) must have current applicability to defendant’s business operations, and (b) more likely than not would cause competitive harm to the business operations of the disclosing party.” Lastly, the court rejected defendants’ request to include a provision in the protective order that would require the Court to award damages for any breach of the protective order. National Council on Compensation Ins., Inc. v. American International Group, Case No. 07 C 2898 (USDC N.D.Ill. Dec. 11, 2007).

This post written by Lynn Hawkins.