Reinsurance Focus

We have previously reported on the ongoing action between UNG and Aon for indemnity and contribution. On July 24, 2009, the Eastern District of Pennsylvania decided two post-trial motions arising out of a reinsurance agreement between United National Insurance Co. (“UNG” as plaintiff) and its Italian reinsurer Riunione Adriatica di Sicurta and UNG’s broker, Aon, Ltd. (defendant). In 1999 RAS commenced arbitration seeking to rescind the reinsurance agreement alleging it had been misled by one or both of the other parties. The arbitrator ruled in favor of RAS; UNG subsequently filed the present action for indemnity or contribution against Aon. The jury, applying Pennsylvania law, returned a $16.8 million dollar indemnification verdict for UNG. Following the trial, Aon filed a Motion for Judgment as a Matter of Law or for a New Trial. UNG, for its part, filed a motion for a discretionary grant of interest on its awarded damages.

The district court denied Aon’s motion for a new trial, holding that it was reasonable for a jury to conclude that Aon was in the business of supplying information as a broker (and did so in connection with this reinsurance agreement). The court found no error in the jury’s conclusions, and found it inappropriate to order a new trial. Conversely, the court granted UNG's motion to alter or amend the judgment, finding that an interest award was appropriate under Pennsylvania law, and applied the interest grant to the entire award including attorneys’ fees and costs. The court granted UNG an additional $8.2 million in damages. United Nat’l Ins. Co. v. Aon Ltd., Case No. 04-539 (USDC E.D. Pa. July 24, 2009).

This post written by John Black.