ACE faces new legal hurdles on asbestos claims
London insurers are seeking to block units of ACE Ltd. from consolidating arbitration proceedings on dozens of asbestos claim-exposed reinsurance contracts dating back to the 1950s, Business Insurance reported yesterday.
The trade magazine said on its website that ACE units last month filed 17 separate arbitration demands against Lloyd?s of London underwriters and other London-market reinsurers, charging the reinsurers with a ?pattern and practice of delay, obstruction and failure and refusal to timely pay? asbestos claims, according to court filings and a lawyer involved in the dispute.
ACE, which is running off business originally written by CIGNA Corp. and Aetna Property & Casualty operations that ACE acquired, seeks ?recovery of all outstanding amounts as well as future billings? on asbestos losses.
The ACE arbitration demands cover roughly 50 reinsurance contracts in force between the 1950s and 1980s and list roughly 100 policyholders with asbestos claims that ACE contends should be covered under the contracts, according to Jack B. Gordon, a lawyer with Fried, Frank, Harris, Shriver & Jacobson in Washington, representing the reinsurers.
Many of the claims are on losses for which ACE has not yet billed or given notice to the London reinsurers, Mr. Gordon said. London reinsurers have also demanded that ACE?s asbestos claims be supported by adequate evidence, he said.
An ACE spokesman declined to comment on the dispute.
ACE has sought to consolidate arbitrations of the approximately 50 contracts into 17 proceedings, while the reinsurers argue that the contracts themselves contain no provisions for consolidated proceedings and that they should be arbitrated separately.
London reinsurers this week filed nine separate complaints against ACE units in federal courts in Pennsylvania, New Jersey and California. The suits seek court orders that ACE subsidiaries may not consolidate the arbitrations and must address disputes under each treaty separately.
London reinsurer plaintiffs include Lloyd?s underwriters and London-based Excess Insurance Co. Ltd., a Hartford Financial Services Group Inc. unit that is in runoff.
ACE units named in the suits include ACE Property & Casualty Insurance Co., Century Indemnity Co. and Westchester Fire Insurance Co.
Many of the reinsurance contracts involve excess liability coverage written for public utility companies and oil and gas producers and distributors, court records show.