DISTRICT COURT CONFIRMS THAT REINSURANCE CLAIMS NOT SUBJECT TO TEXAS PROMPT PAYMENT STATUTE
After holding that the follow the fortunes doctrine required a reinsurer to pay claims for business interruption and property damage at a theme park due to Hurricane Floyd in 1999 (see August 16, 2006 post to this blog), a Magistrate Judge entered a Report and Recommendation holding that the reinsurance claim was not subject to the Texas prompt payment statute, Texas Insurance Code article 21.55. Houston Casualty filed objections to the Report and Recommendation, and the district court rejected the objections, adopting the Magistrate’s Report and Recommendation in a two sentence Order. Houston Cas. Co. v. Lexington Ins. Co., Case No. 05-1804 (USDC S.D. Tex. June 25, 2007).
