By Syed Ahmad, Walter Andrews and Patrick McDermott (September 14, 2017, 2:17 PM EDT) -- Joining a growing number of courts, a Pennsylvania appellate court recently rejected a reinsurer's "limits" defense. In Century Indemnity Co. v. OneBeacon Insurance Co., OneBeacon argued that its total exposure as Century's reinsurer was capped by the "reinsurance accepted" amount in the reinsurance contracts. The roots of this defense extend back to the Second Circuit's 1990 decision in Bellefonte Reins. Co. v. Aetna Cas. & Sur. Co. After the Bellefonte decision, more and more reinsurers began to contend that the reinsurance accepted amounts in their facultative reinsurance certificates capped their liability for loss and expense, even where the reinsured policy obligated the cedent to pay expense in addition to the reinsured policy limits. For a number of years, courts largely adopted the reinsurers' position. But, more recently, courts have often returned to first contract principles, examining each contract based on its unique terms and rejecting reinsurers' arguments that prior case law examining different language controlled. The Pennsylvania appellate court's decision in Century v. OneBeacon is the latest in that line of rulings....