August 30, 2010
Travelers Wins $262.3 Million From Reinsurers in Asbestos Case
In a 28 page decision, New York Supreme Court Justice Richard Lowe said Travelers Insurance is entitled to receive about $262.3 million plus interest from a group of reinsurers.
For the past several years, United States Fidelity & Guaranty Company (USF&G), now part of Travelers, had been looking to recoup from reinsurers about half of a $987 settlement with an asbestos policyholder.
According to court documents, the largest share of the awardâ€”about $202.5 millionâ€”will be paid by American Reinsurance Company, now Munich Re America.
About $59.8 million will be picked up by the Excess Casualty Reinsurance Association, ACE Property & Casualty Co., Century Indemnity Co., OneBeacon American Insurance Co. and Excess Treaty Management Corp., according to the decision.
Justice Lowe found that the reinsurance treaties were enforceable. With interest, the award could top $420 million. Reportedly, Travelers' attorneys have said the company had already reached settlements with other reinsurers.
USF&G settled with Western Asbestos in 2002 after about 10 years of litigation, but the facts of the case go back to 1948 when USF&G began providing a number of liability insurance policies to the asbestos company, according to court documents. Western Asbestos sought coverage when it started to get sued by individuals injured by asbestos.
At least one of the reinsurers, Princeton, N.J.-based Munich Re America Inc., has said it plans to appeal the ruling.
The Bloomberg story is here