Reinsurer’s Loss Reserves May be Relevant to Bad Faith Claim, Calif. Federal Judge Rules

SAN DIEGO — A California federal judge has ordered an insurer to produce information concerning its reinsurer’s loss reserves, finding this information may be relevant to the policyholder’s bad faith claim in a dispute involving marine coverage.

On Nov. 1, Magistrate Judge Mitchell D. Dembin of the U.S. District Court for the Southern District of California held that such loss reserve information may be relevant in determining the subjective intent component of a bad faith claim.

This action arises out of a "Hull and Machinery/Protection and Indemnity" policy issued by State National Insurance Co. to Robert McAdam, effective May 5, …