Ariz. Federal Judge Allows Amended Complaint Against Reinsurer in ‘Cut-Through’ Action

PHOENIX — An Arizona federal judge has allowed an amended complaint against reinsurer Hartford Steam Boiler Inspection and Insurance Co., ruling it has plausibly alleged that a reinsurance contract issued to the plaintiff’s insurer allows policyholders to assert “cut-through” actions.

In a Dec. 19 order, Judge James Teilborg of the U.S. District Court for the District of Arizona further found that Midtown Hotel Group LLC may be able to maintain breach of contract and bad faith claims on a third party-beneficiary theory.

Midtown sued its insurer, Selective Insurance Company of America and an “additional insurer,” Hartford, demanding coverage …