Case Study: Trenwick American Reinsurance V. IRC

Law360, New York (July 15, 2011, 12:42 PM EDT) -- In an important decision with implications for cedents and reinsurers alike, the U.S. District Court for the District of Massachusetts, after a two-week bench trial, has held a reinsurer and its controlling officer liable under Chapter 93A (Massachusetts Unfair and Deceptive Trade Practices Act) for their bad-faith disavowal of a reinsurance agreement.[1]

Trenwick Am. Reins. Corp. v. IRC Inc. reaffirms the court's prior holding in Seven Provinces[2] that, where a "moving target" strategy is employed to coerce a favorable compromise of reinsurance obligations, it may constitute...
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