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Reinsurance Information Up for Grabs

Larry Schiffer | June 21, 2024

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A magnifying glass resting next to a stack of insurance policy documents

In 2016, I wrote an Expert Commentary titled "The Reinsurance Information Free-for-All Highway," which discussed the many ways reinsurance information is sought by various stakeholders. This article updates that one due to the increased proliferation of case law surrounding broad and persistent requests for reinsurance information and communications.

Why are claimants and policyholders obsessed with reinsurance information and communications? Why do discovery requests in personal injury actions or coverage disputes routinely request reinsurance documentation and communications? What is so important about communications and information about a reinsurance contract between an insurance company and its reinsurers? These are some of the questions that this article will try to answer.

Why Reinsurance Information Is Requested

Whether in a lawsuit by a claimant against an insured for personal injuries or property damage, or in a declaratory judgment or breach of contract action between a policyholder and its insurance company over the denial of insurance coverage, invariably, a request for reinsurance information will be made. Policyholders and claimants seek discovery of reinsurance information because they believe that information provided by ceding insurers to reinsurers, or the reinsurance contracts themselves, may provide actionable admissions or other concessions or, at the very least, useful information that supports their claims.

Communications between ceding insurers and reinsurers often contain a wealth of information about the underlying policy, the course of dealing between the ceding insurer and reinsurer, and how an insurance company addressed, defended, and evaluated the claim. Under most reinsurance contracts, some level of reporting by the ceding insurer on claims is required, and some reinsurance contracts require detailed reporting on each loss or on losses in excess of a specific reserve amount. Other reinsurance contracts require detailed reporting of certain categories of losses, such as death, brain injuries, or loss of limbs from the first dollar paid for defense. Those reports may discuss the nature of the underlying claim, available defenses, an evaluation of the likelihood of success, coverage defenses and disclaimers, and the reserve set by the ceding insurer on the underlying claim.

Reinsurance contract information may provide details about coverage and the ultimate financial responsibility for a claim that might prove valuable in settlement discussions. Where a ceding insurer has leveraged reinsurance and retains little of the risk, incentives to settle may shift. This information may be important to both the claimant's lawyer and to the policyholder's counsel in negotiating a settlement.

Reinsurance information requests tend to come in three contexts. First, reinsurance information is often sought in disputes between personal injury or property damage claimants and insured defendants. Second, reinsurance information is requested in coverage disputes between policyholders and their insurers. These are often declaratory judgment actions either seeking coverage or seeking a declaration that there is no coverage. Third, reinsurance information is also sought in the obvious context of disputes between ceding insurers and reinsurers. In the latter case, the request for reinsurance information is typically tied to the reinsurance contract and the access to records clause. In the former cases, the requests are grounded in the discovery and admissibility rules found in state and federal procedural codes.

Types of Reinsurance Information

The types of reinsurance information requested tends to break down into two categories: contract information and claims information. Discovery requests will often ask for copies of reinsurance contracts and related contract information. These requests are aimed at coverage issues and determining if there is a contractual basis for a direct right of action against the reinsurer.

In Williams Int'l Co., LCC v. Zurich Am. Ins. Co., No. 4:20-cv-13277, 2022 U.S. Dist. LEXIS 40303 (E.D. Mich. Mar. 7, 2022), the policyholder moved to compel production of reinsurance agreements. In granting the motion in part, the court held that the reinsurance agreements were covered by Federal Rule of Civil Procedure 26(a)(1)(A)(iv) and should have been produced as part of the insurance company's initial disclosures (requiring disclosure of "any insurance agreement under which an insurance business may be liable to satisfy all or part of a possible judgment in the action or to indemnify or reimburse for payments made to satisfy the judgment").

The court noted that the rule is absolute, and no showing of relevance is necessary. Accordingly, the court ordered the insurance company to produce any reinsurance agreement, whether treaty or facultative, along with any declarations sheets. See also, Lamar Advert. Co. v. Zurich Am. Ins. Co., No. 18-cv-1060, 2020 WL 448243, 2020 U.S. Dist. LEXIS 13891 (M.D. La. Jan. 28, 2020); U.S. Tobacco Coop., Inc. v. Certain Underwriters at Lloyd's, No. 19-cv-430, 2021 WL 1341360, 2021 U.S. Dist. LEXIS 69206 (E.D.N.C. Apr. 9, 2021). (The court ordered broad production of reinsurance materials based on the automatic disclosures required under Rule 26(a)(1)(A),19, which required the insurers to identify and produce any relevant reinsurance agreements if the reinsurers may be liable for paying part of a judgment against the insurers.)

Reinsurance information may include regulatory filings, securities offerings, and communications with reinsurance intermediaries. Whether any or all of this information is properly discoverable will depend on the facts of each case and whether the court will allow broad discovery under its interpretation of the relevant evidentiary and procedural rules.

Depending on the context, corporate and regulatory reinsurance information may be requested. In a dispute between a ceding insurer and a reinsurer involving allegation of fraud and breach of contract in the context of a protected cell company, a New York federal court had to address whether the subpoenas of corporate counsel for the protected cell and related companies and the state regulator should be quashed for seeking reinsurance information presented to the regulator concerning the formation and approval of the protected cell company. AmTrust N. Am., Inc. v. Safebuilt Ins. Servs., Inc., 186 F. Supp. 3d 278 (S.D.N.Y. 2016). The court allowed discovery of nonprivileged documents and communications by the protected cell company's parent to the regulator about the protected cell company, including its formation, cell funding, cell merger, business plans, approvals, and policy language.

Reinsurance Information in the Context of Insured Claims Disputes

Claims information and communications with reinsurers about claims is even more prevalent and is by far the most sought-after category of reinsurance information. This type of information may include reinsurance billings, ceding insurer reports to the reinsurer on the claim (including reserves and comments), or advice obtained from the reinsurer. Defense counsel and coverage counsel evaluations of the underlying claim are also typically requested.

Plaintiffs seeking damages from insured defendants often believe that reinsurance information may contain admissions against the insured defendant that will entitle the claimant to damages. For example, a ceding insurer may provide a report to its reinsurer that evaluates the underlying claim and expresses a view that a contested defense may not be viable based on an analysis of the case law. Sometimes, these reports are prepared by defense counsel or coverage counsel, and other times, they are internal claims department evaluations. Obviously, a claimant would want to see these reports and make use of them in the context of the case.

Additionally, claimants often will ask for reserve information provided by the ceding insurer to the reinsurer. While those in the insurance industry recognize that reserve information is not an admission of liability or damages, plaintiffs' lawyers continue to seek this type of information, claiming that reserve evaluations are a tacit admission of liability. Typically, demands for production of reserving information are not successful, but some courts have allowed discovery of reserving information under specific factual scenarios.

Reinsurance Information in the Context of Declaratory Judgment Actions

Policyholder counsel will also often seek reinsurance information to fill in coverage gaps and missing policy wording. Complex coverage disputes involving long-tail or latent-injury claims involve policies going back decades. Records are often spotty in early coverage years, and information is often needed about policy details, insurers that issued policies to the policyholder, and policy limits.

Additionally, policyholder counsel will try to obtain reinsurance information to locate admissions of coverage when in a contested coverage dispute. Attorney-client and attorney-work-product privileges may preclude discovery of reinsurance information when provided in the context of active litigation or through counsel providing legal advice. Also, in states that recognize it, the common interest privilege may preclude discovery of communications between ceding insurers and reinsurers. Privilege-type defenses raised to preclude discovery of reinsurance information will typically not be successful unless the information is truly privileged information, meaning communications between the attorney and client providing legal advice.

In Ansur Am. Ins. Co. v. Borland, No. 3:21-CV-59-SMY-MAB, 2023 U.S. Dist. LEXIS 190193 (S.D. Ill. Oct. 23, 2023), the insurer brought a legal malpractice claim against appointed defense counsel for the insurer's insured in an underlying products liability action. The defendant law firm sought discovery, including reinsurance communications on the products case between the insurer and its reinsurers that the insurer withheld from production on the basis of privilege. The defendant law firm sought to compel production of those documents, along with other withheld items.

The issue in Ansur was the applicability of the common interest doctrine to the reinsurance communications. The court noted that the common interest doctrine is not actually a privilege in and of itself. "Instead, the doctrine extends a preexisting 'privilege to communications made in the presence of third parties for the purpose of coordinating a defense strategy or pooling information for common legal purpose.'" [Citations omitted.]

Importantly, the court stated that the party withholding documents based on the common interest doctrine bears the burden of establishing the common interest and the underlying privilege. The key issue that many people miss in applying the common interest doctrine is first establishing that the communication itself was a privileged communication.

While the court found that the insurer had demonstrated that a common interest between the insurer and its reinsurers existed, the court was unable to determine whether the common interest doctrine was applicable without first examining the communications and documents to determine whether an underlying privilege existed. Thus, in partially granting the defendant's motion, the court ordered that the insurer review the documents it claimed were protected under the common interest doctrine to determine whether they involved privileged attorney-client communications or work product in the first instance.

In San Juan Assoc., Outdoor World, LLLP v. Depositors Ins. Co., No. 22-cv-001137-CNS-NRN, 2023 U.S. Dist. LEXIS 190994 (D. Colo. Oct. 24, 2023), a bad faith claim was brought against the insurer by its insured. The insured requested production of the relevant claims files, and the insurer redacted information in the claims files, including reinsurance information. The insured sought to compel production of the redacted information, including the redacted reinsurance information.

In ordering the insurer to remove the redactions related to reinsurance, the court noted that the basis for the reinsurance redactions were relevance-based and not related to privilege. The court held that if the insurer included references to reinsurance interspersed within its otherwise discoverable claims files with no privilege attaching to them, then the insurer should not have redacted those references.

In U.S. Tobacco Coop., Inc. v. Certain Underwriters at Lloyd's, No. 19-cv-430-BO, 2021 U.S. Dist. LEXIS 69206 (E.D.N.C. Apr. 9, 2021), the court addressed the policyholder's second motion to compel discovery against the insurers. The court made the following statement concerning the insurers' burden to avoid discovery.

The party resisting or objecting to discovery "bears the burden of showing why [the motion to compel] should not be granted." [Citation omitted.] To meet this burden, the non-moving party "must make a particularized showing of why discovery should be denied, and conclusory or generalized statements fail to satisfy this burden as a matter of law." Id.

The court noted that the insurers claimed that the reinsurance materials were protected by the attorney-client or attorney work-product privileges. The court analyzed the parameters of the privileges and instructed the insurers to only withhold documents if they had a good faith belief that the communications related to the provision of legal services.

On the production of reinsurance materials, the court noted that the cases conflict on the issue. The court rejected the insurers' argument that the policyholders had not shown the reinsurance information to be relevant because the burden is on the insurers to show a lack of relevance. The court held that the insurers did not meet this burden and that the reinsurance information was relevant.

For example, the court found that the insurers presented no evidence showing that the reinsurance documents should be immune from discovery. No affidavits or other evidence were presented, just unsworn statements in the briefs. Additionally, the court found that the insurers had waived the privileges because there had been both deposition testimony and some document production of reinsurance information. Accordingly, the court ordered production of the requested reinsurance documents.


As seen above, there is a lot of reinsurance information out there, and there are also some important reasons to seek reinsurance information and communications to assist in prosecuting or defending an insurance dispute. However, automatic requests for reinsurance information will not be successful, and there needs to be a legitimate basis to seek reinsurance information.

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