Bellefonte No Longer Controlling in 2nd Circuit, Panel Rules

NEW YORK — A federal appeals panel has affirmed that Global Reinsurance Corporation of America’s obligation to pay defense costs to its cedent, Century Indemnity Co., is not capped, ruling that Bellefonte Reinsurance v. Aetna is no longer controlling law in the circuit.

In a Dec. 28 opinion, the 2nd Circuit U.S. Court of Appeals panel explained that Bellefonte was undermined by the New York Court of Appeals’ ruling that “the ‘standard rules of contract interpretation’ applicable to facultative reinsurance contracts do not permit a court to disregard the precise terminology that the parties used and simply assume that any …