Reinsurance Focus

Certain Underwriters at Lloyd’s, London brought suit in Florida federal court to seek adjudication of the binding effect of a purported settlement agreement it had entered with insureds pertaining to coverage for an underlying all terrain vehicle accident. Lloyd’s and the insureds had been approaching a tentative agreement on a settlement, but the parties’ stories diverged from there, with Lloyd’s asserting settlement had been in fact been reached in principle, and the insureds asserting that no final agreement had been reached. Lloyd’s brought suit in federal court to resolve the dispute, and the trial court rejected the insureds’ challenge to jurisdiction, by way of motion to dismiss, asserting that Lloyd’s had to specifically allege the residence of each of the “names” actually sponsoring the insurance, and for whom liability attaches severally under pertinent British statutory laws governing Lloyd’s. The Eleventh Circuit Court reversed that decision, detailing the history of Lloyd’s, its nature as an unincorporated association of “names” who sign on to particular risks, which are administered by “syndicates,” and the manner in which liability attaches to the “names,” akin to the members of a partnership. The Court held that Lloyd’s must allege each of the actual “names” bringing suit for purposes of establishing diversity jurisdiction. Underwriters at Lloyd’s, London v. Osting-Schwinn, No. 08-15809 (11th Cir. August 5, 2010).

This post written by John Pitblado.