Insurance Antitrust Litigation, In re
| Decision Date | 18 June 1991 |
| Docket Number | 89-16513,Nos. 89-16405,s. 89-16405 |
| Citation | 938 F.2d 919 |
| Parties | , 1991-1 Trade Cases 69,460 In re INSURANCE ANTITRUST LITIGATION. ACE CHECK CASHING, INC.; Acme Corrugated Box Company, Inc.; Anastasios Markos, t/a Municipal Exxon; Bay Harbor Park Homeowner's Association, Inc.; Bensalem Township Authority; Big D Building Supply Corporation, et al., Private Plaintiffs, Plaintiffs-Appellants, and State of Alabama, et al., Plaintiffs, v. AETNA CASUALTY AND SURETY COMPANY; Allstate Insurance Company; Cigna Corp.; Hartford Fire Insurance Company, et al., Defendants-Appellees. STATE OF CALIFORNIA; City of Lafayette; City and County of San Francisco; County of San Benito, Plaintiffs-Appellants, and State of Alabama, et al., Plaintiffs, v. AETNA CASUALTY AND SURETY COMPANY; Allstate Insurance Company; Cigna Corp.; Hartford Fire Insurance Company, et al., Defendants-Appellees. STATE OF CALIFORNIA; City of Lafayette; City and County of San Francisco; County of San Benito, Plaintiffs-Appellants, v. INSURANCE SERVICES OFFICE, INC., CNA RE (U.K.) Ltd.; Continental Reinsurance Corporation; Union-America Insurance Co.; Edwards & Payne Ltd.; Excess Insurance Co., Ltd.; General Reinsurance Corp.; Thomas A. Greene & Company, Inc.; Kemper Reinsurance London; Lloyd's Underwriters & Brokers; Mercantile & General Reinsurance Company of America; North American Reinsurance Corporation; Oxford Syndicate Mgmt. Ltd.; (sued herein as K.F. Adler & Others (U.A.) Ltd.); Prudential Reinsurance; Reinsurance Association of America; Terra Nova Insurance Co.; Aetna Casualty and Surety Company; Allstate Insurance Company; Winterthur Reinsurance Corporation of America; Cigna Corp.; Hartford Fire Insurance Company, Defendants-Appellees. STATE OF NEW YORK; Roosevelt Island Operating Authority; Village of Groton; Village of Lake Success, Plaintiffs-Appellants, v. HARTFORD FIRE INSURANCE COMPANY; Aetna Casualty and Surety Company; Cigna Corp.; Allstate Insurance; et al., Defendants-Appellees. COMMONWEALTH OF MASSACHUSETTS; Town of Hanover; Town of Milford, Plaintiffs-Appe |
| Court | U.S. Court of Appeals — Ninth Circuit |
Thomas Greene, Deputy Atty. Gen., San Francisco, Cal., H. Ladie Montague, Philadelphia, Pa., for plaintiffs-appellants.
Laurel Price, Deputy Atty. Gen., Trenton, N.J., for State plaintiffs-appellants.
Bartlett H. McGuire, Davis, Polk & Wardwell, Washington, D.C., John Harkins, Philadelphia, Pa., Martin Evans, New York City, for defendants-appellees.
Edwin A. Heafey, Jr., Raoul D. Kennedy and Richard de Saint Phalle of Crosby, Heafey, Roach & May, Oakland, Cal., defendants-appellees' liaison counsel.
Appeal from the United States District Court for the Northern District of California.
Before BEEZER and NOONAN, Circuit Judges, and SINGLETON, * District Judge.
Nineteen states and numerous private parties brought antitrust suits against the defendants named above. These suits were consolidated in the district court and were ultimately dismissed. The plaintiffs appeal. We reverse the district court and remand.
The undisputed facts are set out by the district court in In re Insurance Antitrust Litigation, 723 F.Supp. 464, 468-70 (N.D.Cal.1989). We summarize:
Commercial general liability insurance (CGL) protects the insured against the risk of liability to third parties for bodily injury or property damage. It is purchased by businesses, nonprofit entities, and governmental units. Defendants Hartford Fire Insurance Company (Hartford), Allstate Insurance Company (Allstate), Aetna Casualty and Surety Company (Aetna), and CIGNA Corporation (CIGNA) are sellers of CGL.
In distinction from these primary insurers, there are reinsurers to whom the primary insurers turn to share their risk. The terms and availability of reinsurance directly affect the terms and availability of primary insurance. In turn, retrocessional insurance--insurance for reinsurers--has an impact on the terms of reinsurance and primary insurance. The defendant reinsurers in this case are domestic--e.g., General Reinsurance Corporation (General Re)--and also foreign. The foreign defendant companies include one Swiss corporation, Winterthur Swiss Insurance Company (Winterthur); and six "London Company Market" corporations, all of them subsidiaries Reinsurance is arranged by specialized brokers and underwriters. Much reinsurance is done by syndicates doing business through Lloyd's of London. A variety of defendants here are underwriters for these reinsurance syndicates-- e.g., Merrett Underwriting Agencies Management, Ltd. (Merrett) and Three Quays Underwriting Management Ltd. (Three Quays). Thomas A. Greene and Co., Inc. (Greene) is an American reinsurance broker, a defendant here. Ballantyne, McKean and Sullivan, Ltd. (Ballantyne) and R.K. Carvill & Co., Ltd., (Carvill) are London reinsurance brokers, defendants here. There are also individual defendants associated with reinsurance--e.g., Peter North Miller, the chairman of the Council of Lloyd's, its governing body; and Robin A.G. Jackson, chief underwriter for Merrett.
of American corporations: Terra Nova Insurance Co., Ltd. (Terra Nova); Unionamerica Insurance Co., Ltd. (Unionamerica); Continental Reinsurance Co., (U.K.) Ltd. (Continental Re); Excess Insurance Group, Ltd. (Excess); Kemper Reinsurance London, Ltd. (Kemper Re); and CNA Re (U.K.) Ltd.
Two insurance associations are also defendants. One is Reinsurance Association of America (RAA), which principally engages in lobbying. The other is the Insurance Service Office (ISO). ISO has a key role in the regulation of insurance by the several states. Formed in 1971 by the merger of eleven insurance rating bureaus, ISO is an association of over fourteen hundred property and casualty insurers. It develops standard forms of policies. It collects statistical data and estimates risks relevant to the forms. In those states where regulators formally approve the forms, ISO presents the forms for approval.
In 1984, Hartford expressed its dissatisfaction with the standard ISO form for CGL insurance. In particular, Hartford was displeased with the way the form insured against "occurrences" of liability during the life of the policy. Such insurance had "a long tail," i.e., years after the policy had expired, a claim might be made upon it for an occurrence during the life of the policy. Hartford wanted a "claims made" form to replace the "occurrences" form. Under a "claims made" form only claims made during the life of the policy would be paid. Hartford also objected...
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