Ninth Circuit Affirms 500,000,000 Dollar Judgment Against Reinsurer
UNITED STATES LIFE INSURANCE V. SUPERIOR NATIONAL INSURANCE CO. (CIVIL ACTION NO. 07-55938 JANUARY 4, 2010)
Ten years ago, US Life requested arbitration pursuant to the reinsurance contract seeking: (1) rescission or reformation of the contract because the insurers misrepresented the reserves during the underwriting process and (2) damages for the insurers’ bad faith performance. The arbitration panel bifurcated the arbitration into two phases, the first addressing rescission and reformation and the second determining whether the insurers engaged in improper handling of claims that resulted in bills to US Life in excess of the amounts due under the reinsurance agreement.