Law360, New York (February 24, 2015, 3:08 PM EST) -- In the 1990 case of Bellefonte Reinsurance v. Aetna Casualty & Surety Co., the Second Circuit issued one of the most important — and, at least in some circles, controversial — decisions in reinsurance jurisprudence when it held that a reinsurer was not liable for its cedent's defense costs above the liability limit stated in a facultative reinsurance certificate. Despite several challenges over the years, federal and state courts in New York consistently reaffirmed Bellefonte's core holding. Against this backdrop, a handful of recent decisions have both confirmed the continuing vitality of Bellefonte after 25 years and identified potential avenues for expanded reinsurance recoveries in certain circumstances....