BURDEN RESTS WITH REINSURER TO SHOW LESSER LIABILITY UNDER RETROCESSIONAL INSURANCE AGREEMENT
On January 23 and April 12, 2012, we reported on orders concerning liability and damages in a suit involving disputed payment obligations under reinsurance and retrocessional agreements between Munich Re and Tower Insurance. The court recently addressed the parties’ motions in limine designed to determine whether Munich must affirmatively prove that Tower was 100% liable for claims under one of the retrocessional agreements at issue, or whether a burden rested with Tower to show that it was obligated to pay only 10% under certain conditions provided in the agreement. The court interpreted the agreement’s language and found that the burden of proof belonged to Tower because the 10% indemnity provisions constituted policy exclusions, which, under state law, must be “construed narrowly with the onus on the insurer to bring the case within the exclusion.” Munich Reinsurance America, Inc. v. Tower Insurance Co. of New York, Case No. 09-02598 (USDC D.N.J. July 17, 2012).
This post written by Michael Wolgin.
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