Skip to Content

The Reinsurance Information Free-for-All Highway

Larry Schiffer | June 24, 2016

On This Page
Confidential files

Everybody wants information. The recent data breaches culminating in Internet releases of confidential information about business deals, tax shelters, and business secrets have provided a treasure trove of interesting, embarrassing, and sometimes valuable information to competitors, regulators, and litigants.

In business litigation, information is obtained through discovery requests and subpoenas, not through data breach releases. In the more mundane world of insurance and reinsurance disputes, access to reinsurance information and communications with reinsurers is equally important and regularly sought. And although reinsurance is still not a household subject, requests for reinsurance information are proliferating and expanding in insurance litigation.

Why Reinsurance Information Is Requested

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

Communications between ceding insurers and reinsurers often contain a wealth of information about the underlying policy and the insurance company's handling and evaluation of the claim. Under most reinsurance contracts, some level of reporting by the ceding insurer on claims is required. 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 very 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 basically three contexts. The first context in which reinsurance information is often sought concerns disputes between claimants and insureds. The second context for reinsurance information is in the context of disputes between policyholders and insurers. 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 available are nearly limitless. Discovery requests will often ask for copies of reinsurance contracts, 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 typically requested. Reinsurance information may include regulatory filings, securities offerings, and communications with reinsurance intermediaries. Whether any or all if 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 subpoenas to 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., Nos. 16-MC-169 (CM) (JLC), 16-MC-170 (CM) (JLC), 2016 U.S. Dist. LEXIS 64105 (S.D.N.Y. May 16, 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

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 might 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.

Many environmental damages claims and asbestos personal injury actions involve policies going back to the 1950s and 1960s, if not earlier. Not surprisingly, some of those policies may be lost or missing. The target defendants may be in bankruptcy or otherwise out of business. The records covering the target defendant's insurance purchases over long periods of time may be incomplete. The target defendant may not know what companies provided insurance coverage and at what limits, terms, and conditions. Mergers and acquisitions over the years may cause a further impediment to uncovering all the necessary policies that may have some risk exposure.

Claimants may seek reinsurance information to help fill in the gaps of missing policies and policy wording so that the settlement pot may be increased or be fully funded. Insurance program proposals, renewal packages, broker communications with reinsurers, and other similar information may provide evidence of missing policies that help fill in the policy matrix. When there is an issue about identifying applicable policies or policy wording, discovery of reinsurance information is likely to be allowed to help fill in the missing information.

Reinsurance Information in the Context of Declaratory Judgment Actions

Policyholder counsel also will often seek reinsurance information to fill in coverage gaps and missing policy wording for many of the reasons previously discussed. 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.

Reinsurance agreements have been construed by some courts to come within the federal discovery rules requiring production of "any insurance agreement." FRCP 26(a)(1)(A)(iv). In Certain Underwriters at Lloyd's v. AMTRAK, No. 14-CV-4717 (FB), 2016 U.S. Dist. LEXIS 64088 (E.D.N.Y. May 16, 2016), the court held that the reinsurance contracts demanded in discovery by the policyholder came within the disclosures required under the federal rules. While the court acknowledged that reinsurance cannot be treated interchangeably with insurance in every context, in the context of initial disclosures under the federal rules, reinsurance is appropriately construed as the functional equivalent of insurance.

Reinsurance Information in the Context of Reinsurance Disputes

In the context of reinsurance disputes, the communications between the ceding insurer and the reinsurer are a typical part of the information exchange. The concerns about shielding communications between the ceding insurer and the reinsurer from policyholder or claimant counsel are not an issue in a dispute between the two communicating parties. Confidentiality agreements entered into in reinsurance disputes generally protect reinsurance information from claims of waiver of privilege.

Obviously, it is difficult to argue that communications between the disputing companies should not be disclosed in a reinsurance dispute. But that does not mean the ceding insurer's communications with other reinsurers should be produced. In many reinsurance arbitrations where broad discovery of reinsurance information with the entire market is sought by the reinsurer, arbitration panels often take the view that only the communications between the ceding insurer and the reinsurer in the dispute are relevant and that communications with other reinsurers have no bearing on the specific issues in dispute. Of course, whether communications with other reinsurance markets are relevant will depend on the specific facts of the case.


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. Knee-jerk requests for reinsurance information, however, will not be successful. There needs to be a legitimate basis to seek reinsurance information. Now that federal discovery rules require proportionality as a factor in discovery demands, fishing expeditions into reinsurance information will likely fail, and only narrowly crafted requests seeking needed information relevant to the case will be permitted.

Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.