Travelers Reaches Settlement With Reinsurer

The Travelers Indemnity Company v. La Fonciere Compagnie D’Assurances, et al.

(D. Conn. December 30, 2009)

 

Travelers Indemnity Co. (“Travelers”) issued primary, umbrella and excess insurance policies to The Goodyear Tire and Rubber Company (“Goodyear”) in the late 1970s.  Travelers was reinsured by La Fonciere Compagnie D’Assurances (“La Fonciere”), Phoenix Greece Ins. Co. S.A. (“Phoenix”), and Assurance Generales de France S.A. (“AGF”) for a portion of the risk associated with its policy covering Goodyear.

 

Goodyear became liable for environmental claims.  Travelers initially denied coverage, but reached a settlement with Goodyear after Goodyear commenced a declaratory judgment action against it.  Pursuant to that settlement, Travelers made installment indemnity payments to Goodyear through March 2006.

 

In 2009, Travelers commenced an action against its reinsurers seeking reimbursement for these payments.  Travelers claimed that it provided precautionary notice to the reinsurers about the environmental claims in 1988.  From 1988 until Travelers executed the settlement agreement with Goodyear, Travelers provided periodic reports to the reinsurers of developments relating to the environmental claims and coverage action.  In early 2005, Travelers forwarded a detailed letter to the reinsurers advising them of the settlement with Goodyear and notifying them that Travelers would bill the reinsurers for their responsible percentages of the loss.

 

In April 2006, Travelers prepared a detailed letter to the reinsurers advising them of the installment payments and enclosing its first reinsurance billings for the reinsurers’ shares of those loss payments.  Travelers prepared another reinsurance billing in November 2006.  Travelers also presented the April 2006 and November 2006 reinsurance billings to the reinsurers through an intermediary in February 2007.  In its complaint, Travelers claimed that the reinsurers refused to pay any of the amounts owed and demanded by Travelers in breach of the reinsurance agreements.  Travelers claimed that La Fonciere owed more than $958,000, Phoenix owed more than $940,000 and AGF owed more than $428,000. 

 

In October 2009, Travelers reached a confidential settlements with AGF and La Fonciere.  On Wednesday, December 30, 2009, Travelers filed a motion to dismiss its suit against Phoenix with prejudice simply stating that the two parties resolved the dispute between them.  No settlement figures were disclosed in the court filing.

 

For a copy of the complaint, click here

 

Toni Frain and Joe Oliva

 

http://www.goldbergsegalla.com/attorneys/Frain.html

http://www.goldbergsegalla.com/attorneys/Oliva.html

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