1 No. 123
Travelers Casualty and Surety Company, &c.,
Appellant,
v.
Certain Underwriters at Lloyd's of London, et al.,
Respondents, L'Abeille Cie D'Assurances, et al.,
Defendants.
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1 No. 124
Travelers Casualty and Surety Company, &c.,
Appellant,
v.
Certain Underwriters at Lloyd's of London, &c., et al.,
Respondents, London and Overseas Insurance Co. Ltd., et al.,
Defendants. Cases Nos. 123 & 124:
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2001 NY Int. 108
October 16, 2001
This opinion is uncorrected and subject to revision before publication
in the New York Reports.
Mary Kay Vyskocil, for appellant.
Herbert M. Wachtell, for respondents.
Reinsurance Association of America et al.; American Insurance
Association; United Policyholders, et al.; American International
Group, Inc., amici curić.
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GRAFFEO
, J.:
These appeals present a common issue of contract interpretation:
whether losses from environmental injury claims involving decades of
commercial activities at numerous industrial and waste disposal sites
may properly be aggregated as a single "disaster and/or casualty"
under certain reinsurance treaties. We conclude, under the facts and
reinsurance contracts at issue, that the aggregation of these losses
is beyond the scope of the applicable treaties.
We begin with a general explanation of the purpose and structure of
reinsurance. As we described in Matter of Union Indem. Ins. Co. of
SNIPPETS:
Travelers Casualty and Surety Company, &c., Appellant, v.
Certain Underwriters at Lloyd's of London, et al., Respondents, L'Abeille Cie D'Assurances,
Ltd., et al., Defendants.
Reinsurance Association of America et al.; American Insurance Association; United
These appeals present a common issue of contract interpretation: whether losses from
Branch v Cologne Reinsurance Co. of Am.,, 75 NY2d 295, 301; Staring, Law of Reinsurance §§
When entering into a reinsurance contract, an insurance company agrees to pay a particular
the reinsured seeks to "cede" or spread its risk of loss among one or more reinsurers.
"The characteristics of the quota share are that a reinsurer takes a given percentage of the
From 1960 to 1981, plaintiff Travelers Casualty and Surety Companyprovided primary, excess
These reinsurance treaties obligate the Reinsurers to pay Travelers for "each and every loss"
"Any and all payments made by in settlement of loss or losses under policies, whether in
Following a decade of litigation, Travelers eventually settled with Koppers for approximately
Travelers' rationale was that the Koppers loss resulted from a "common origin" and/or was
After presenting its reinsurance claim to the Reinsurers, Travelers commenced the action
He found the word "originating" implied a broader scope of application, requiring "the widest
affidavits and exhibits submitted on the motions for summary judgment in these actions
The courts held that the reinsurers were bound by "follow the fortunes" clauses in their
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