Law360 Quotes Partner Alex Roje on Northrop's Win - Curbs Excess Insurers' Settlement Challenges
Law360 recently featured the Ninth Circuit's decision this week to sharply limit excess insurers' ability to second-guess lower-level carriers' payment decisions when it rejected Axis Reinsurance Co.'s argument that it overpaid on Northrop Grumman Corp.'s settlement of a class action suite because the defense giant's other insurers prematurely exhausted their policies.
"We agree with Northrop that the district court's alternative rule — that excess insurers generally may contest the soundness of underlying insurers' payment decisions — 'would undermine the confidence of both insureds and insurers in the dependability of settlements,' eliminating one of the primary incentives for obtaining insurance in the first place," U.S. Circuit Judge Consuelo M. Callahan wrote.
Partner Alex Roje told Law360 she was encouraged to see the Ninth Circuit stamp out the improper erosion theory.
"This is exactly what policyholders have been arguing to excess insurers for many years," Roje said. "This comes up often, particularly on these very large ERISA, [directors and officers] or securities claims, where you are going into four or five excess layers because damages or attorneys fees are so high."
Read the full article here [SUBSCRIPTION REQUIRED]: Northrop's Win Curbs Excess Insurers' Settlement Challenges.