Holding
An Illinois appellate court held that genuine issues of material fact existed as to the existence of reinsurance policies, based on the cedent’s secondary evidence. The court also held that the reinsurer was not entitled to summary judgment on its late notice defense. Pohjola Ins. Ltd. v. Cont’l Ins. Co., 2026 IL App (1st) 242294-U.
Background
In 2004, Continental Casualty Co. (“Continental”) was asked by its policyholder to cover asbestos-related bodily injury liabilities under policies issued in the 1980s. In 2007, Continental and the policyholder entered into a defense cost sharing agreement. At that time, Continental searched for reinsurance but found no evidence that such coverage existed. In 2021, however, Continental uncovered internal records suggesting that Pohjola Insurance Ltd. (“Pohjola”), a Finnish insurer, had reinsured the underlying policies. Continental then submitted a notice of loss and reinsurance billing for over $1.8 million to Pohjola. Pohjola disputed liability and raised concerns over late notice. In 2022, Pohjola sued Continental seeking a declaration that Continental had not proven the existence and terms of any reinsurance agreement and that notice was untimely.
