Reinsurer in Rehabilitation May Make Pre-Offset Plan Payments to Cedents, Del. Judge Rules
April 6, 2022
WILMINGTON, Del. — A Delaware judge has ruled that a reinsurer in rehabilitation may make payments to a subset of cedents for a portion of their losses, ruling that the reinsurer’s receiver did not abuse his discretion in allowing such payments.
On March 31, Vice Chancellor Travis Laster of the Delaware Chancery Court explained that it was rational for the receiver to seek to provide some value to cedents who have not received value through an offset plan, and that the receiver did not act in bad faith in proposing the pre-plan payments.
Scottish Re (U.S.) Inc. entered into reinsurance …