Reinsurance Focus

We reported earlier on an action brought by Instituto Nacional de Seguros (“INS”), a Costa Rican state-owned insurer, against Florida insurance broker Hemispheric Reinsurance Group, L.L.C. and London-based Howden Insurance Brokers Limited. INS alleges breach of contract and tort claims based on Hemspheric’s and Howden’s alleged commission overcharge on $300 million in faculty reinsurance coverage INS obtained on a single property damage and business interruption policy. INS had retained Hemispheric as broker for its reinsurance program; Hemispheric, in turn, retained Howden as sub-broker to gain access to the London reinsurance market.

Howden moved for a determination that English law and practice should apply to INS’s tort claims. INS argued in opposition that the relationship between the parties began in Florida, and that Florida continued to be the center of the parties’ relationship. INS further argued that the funds for the reinsurance program, including the alleged overcharges, flowed through Florida. Howden argued that its conduct took place in England and, further, that there was no “center” of the parties’ relationship because there was no cognizable relationship between INS and Howden as the parties were not in privity. Agreeing with INS, the court held that Florida law applies to INS’s tort claims under Florida’s “most significant relationship” test. Instituto Nacional de Seguros v. Hemispheric Reinsurance Group, L.L.C., Case No. 10-33653 CA 04 (Fla. Cir. Ct. Apr. 10, 2013).

This post written by Ben Seessel.

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