Norcal May Pursue Claims Against Reinsurers, Court Rules

LOS ANGELES - A cedent's failure to timely issue a nonrenewal notice to its policyholder automatically extended the policy by 60 days under California law, a California appellate court has ruled. Norcal Mutual Insurance Co. v. Certain Underwriters at Lloyd's London, No. B213122 (Calif. App., 2nd Dist.).

On Feb. 22, the California Court of Appeal, Second District, reversed a trial court's grant of summary judgment to the reinsurers, finding that a claim brought under the underlying policy fell within that 60-day coverage period, therefore the reinsurers could be liable for the related reinsurance claim.

Norcal created a program through which …