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  Court Shields Reinsurance Details in Abuse Case

By Roberto Ceniceros rceniceros@BusinessInsurance.com
Business Insurance
August 28, 2007

http://www.businessinsurance.com/cgi-bin/news.pl?newsId=10977

San Francisco—Victims of alleged child abuse by priests cannot delve into the Catholic Mutual Relief Society's reinsurance arrangements during discovery as part of pretrial settlement negotiations, California's Supreme Court has ruled.

In Catholic Mutual Relief Society et al. vs. The Superior Court of Los Angeles County, victims sought to learn whether the nonprofit entity, which administers self-insurance funds for more than 300 archdioceses and other Roman Catholic entities in the United States and Canada, could meet its policy obligation should they enter into a settlement with the Archdiocese of San Diego.

In 2004, a Los Angeles County trial court judge said the victims could seek reinsurance information, but Catholic Mutual objected. A state Court of Appeal vacated the judge's order, ruling that California law authorizing limited discovery of a defendant's insurance coverage does not authorize pretrial discovery of reinsurance agreements with a "nonparty" liability insurer.

On Monday, the California Supreme Court agreed. It found that discovery of reinsurance is allowed when a reinsurer's policy functions "in the same way as a liability policy (fronting arrangement), or where the reinsurance agreement is itself the subject matter of the litigation at hand."

But the case before it lacked those exceptions, the state's high court said.

The case was remanded for further proceedings.

 
 

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