We believe that our reinsurance practice is unrivaled in terms of our collective experience, knowledge, and historical success. Our lawyers have successfully handled reinsurance disputes on behalf of cedents, reinsurers, and intermediaries. These have included the most important dispute categories in the industry over time, continuing to today. Our practice includes, of course, arbitrations, and no one has more experience with them. We have also litigated matters in courts, on appeal, and overseas. Our reinsurance practice spans all industry segments: property-casualty, life, health, facultative, treaty, and retrocession.
Quantitatively, we have handled hundreds of reinsurance arbitrations in both domestic and international proceedings, including London and Bermuda arbitrations. Qualitatively, we have earned a reputation for effectiveness and efficiency in our markets, which is the result of decades of effort on behalf of several dozen major clients. We have been engaged to handle disputes arising out of virtually all types of underlying business and exposures, including variable annuities, individual life, workers' compensation, asbestos, environmental, disability income, accident and health, health care, and construction defect claims.
To a significant degree, reinsurance billings lag events in the global economy and in the tort system. As a result, shocks to the system always create new interpretive challenges for multipurpose treaty and policy wordings. Reinsurance disputes almost inevitably arise when general wordings of contracts are called upon to react, after the fact, to these unexpected shocks.
In the 1980s and 1990s, a complex array of reinsurance issues arose out of the development of insurance law as it was applied to a mass tort environment. Issues that originated then are still being litigated, and our lawyers have been centrally involved in all of them for many years: trigger and allocation in a great many forms and permutations, number of occurrences or events, recovery of declaratory judgment expenses, claims-handling and its interaction with the duties of good faith or utmost good faith, and a wide variety of problems associated with insolvencies along the insurance-reinsurance-retrocession pipeline.
More recently, various major dislocations in the life insurance industry have led to controversies about underwriting practices, broker behavior, and the sale of life insurance to "strangers" with no perceptible insurable interest (i.e., STOLI: stranger-originated life insurance). The separate reinsurance pipelines for components of universal life, including most particularly "yearly renewable term" contracts (YRT), have created other controversies that are being worked through the contractual language. Our lawyers have been continuously active in these disputes in recent years.
And, of course, reinsurance is not limited to liability and life exposures. Our practice encompasses surety and construction disputes, health insurance controversies and "accident and health" reinsurance, controversies involving captives, and complex insurance/reinsurance programs.
In virtually all of these disputes, the matrix of reciprocal obligations owed by cedents and reinsurers is defined by contract, law, and long tradition. These generally defined duties meet the complexities of the modern world constantly and must be reconsidered and adapted to the facts as they present themselves. Through long experience in all lines of business and in all of the relevant jurisdictions and fora, Crowell & Moring has a proven record of sophistication and success.
Much like our direct insurance practice, our reinsurance work has focused over the years on the most pressing issues that emerge out of the intersection of tort law, insurance law, and reinsurance contracts.
- Legacy Long-Tail Liability Exposures and Allocation. Our experience with the many issues that arise in the course of final disposition of tort system liabilities as they make their way through the global financial security system has included every major type of liability exposure and all of the significant legal-interpretive issues that have arisen over the past 25 years. We have been regular or coordinating counsel to several major international insurers and reinsurers for asbestos and other mass tort exposures, and we continue these representations today. Our lawyers are continuously engaged in reinsurance disputes arising out of the allocation of legacy liabilities to particular insurance policies, environmental sites, and/or reinsurance treaties. Indeed, we have had an almost continuous docket of such arbitrations for several years.
- Life Re, STOLI, and YRT. These controversies are of more recent vintage, though they often involve decade-old treaties. Our lawyers have handled many of the most financially significant of these disputes, which always involve forging a strategic balance among legal duties, custom and practice, and the imperatives associated with very long-duration contracts.
- Underwriting, Claims-Handling, and Other Behavior-Based Disputes. Understanding the law and custom of "follow the fortunes" is just the beginning of the litigation process for many reinsurance claims that implicate careful evaluations of the methods and practices being used in underwriting and claims disposition. Innumerable reinsurance disputes arise from, and must be resolved with reference to, conduct and decision making that do not necessarily fit within traditional "follow-the-fortunes" thinking, not least because of the active markets that have developed to facilitate the movement and consolidation of liabilities after the fact. New species of bad faith claims have arisen between cedents and reinsurers, and these implicate long factual histories and extremely complex fact patterns. Our firm has been, and is, involved in many of the most important of these disputes, the outcome of which will likely guide market behavior for quite some time.
- Insolvencies. These regularly clutter the courts and regulatory dockets and often block the flow of liabilities—and their countervailing assets—through the insurance-reinsurance financial pipeline. Crowell & Moring's bankruptcy practice is fully integrated with our (re)insurance practice and focuses on insurance-centric insolvency representations. No matter whether the issue lies in bankruptcy court or in a regulatory or liquidation proceeding, we continuously represent insurers and reinsurers facing exposures that may result from insolvency events.
- First-Party, Property, Nat Cat, Surety. These species of reinsurance claims often require a combination of reinsurance experience and great familiarity with complex facts, not to mention a more than passing familiarity with economics and damages jurisprudence. We have counseled about, and litigated, reinsurance issues arising out of weather events, business interruptions of all sorts, and construction problems or disasters.
- Multiline, International Presence. Our reinsurance practice is national and international and extends to any and all lines of business. We have litigated national and international arbitrations, litigated in state and federal and bankruptcy court, and represented clients whose insurance/reinsurance offerings span all of the major business groups and most of the significant subspecialties. Our understanding of the business of reinsurance inevitably allows us to handle major disputes more effectively and also more efficiently.