ARBITRATION TERMINATING RETROCESSIONAL INSURANCE RULED INADMISSIBLE IN RELATED SUIT AGAINST REINSURANCE BROKER
On April 21, 2009, we reported on a case in which reinsurance broker Aon Re prevailed at trial against reinsurer Reliastar Life. Reliastar claimed Aon failed to disclose the potential termination of the reinsurance pool’s retrocessional insurance by its retrocessionaires. An appellate court has now affirmed the judgment for Aon. The appellate court rejected Reliastar’s arguments for reversal, including the argument that the trial court erred by excluding the arbitration decision that ultimately terminated the pool’s retrocessional insurance. The arbitration decision was irrelevant and inadmissible hearsay because Aon was not a party to the arbitration. The court further reasoned that only the timing of when the retrocessionaires considered their agreement ineffective, and not the fact that an arbitration eventually terminated the agreement, was relevant to Reliastar’s claim. The arbitration decision could have mislead the jury by imputing “guilt by association” to Aon for the retrocessional insurance’s termination. Reliastar Life Insurance Co. v. Roger Smith & Aon Re, Inc., Case No. A-4484-08T2 (N.J. App. Div. Mar. 1, 2011).
This post written by Michael Wolgin.
