Calif. Federal Judge Dismisses Breach of Good Faith Claims Against Reinsurers

SACRAMENTO — A California federal judge has dismissed claims for breach of the implied covenant of good faith and fair dealing asserted by a self-insured risk pool against Munich Reinsurance America Inc. and General Reinsurance Corp. in a dispute over reinsurance coverage for an underlying construction defects lawsuit.

In a Sept. 29 order, Judge Troy L. Nunley of the U.S. District Court for the Eastern District of California predicted that the California Supreme Court would not allow such claims to be asserted against reinsurers because the elements of adhesion and unequal bargaining power are absent in reinsurance contracts, which are …