A recent decision by a North Carolina federal court adds to a list of cases requiring insurance company defendants in coverage actions to produce reinsurance agreements as part of their initial disclosures under Federal Rule of Civil Procedure 26. Although the list may be growing, many of these decisions adopt an overly simplistic, one-size-fits-all approach that fails to recognize the complexities of reinsurance and the wide variety of reinsurance covers that may or may not apply to a policyholder’s claim under an insurance policy. Courts would be better served to take a case-by-case approach to determine whether disclosure of reinsurance agreements advances the policy objectives underlying Rule 26’s disclosure requirement – i.e., “to enable counsel for both sides to make the same realistic appraisal of the case, so that settlement and litigation strategy are based on knowledge and not speculation.” While there may be unique or particular circumstances in which disclosure might serve those objectives, in the majority of coverage cases, reinsurance is completely irrelevant.
Reinsurance Agreements and Initial Disclosures
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