In a June 14, 2011, decision by Justice Kapnick, the court granted plaintiff-insurer’s motion for summary judgment declaring that, under a reinsurance agreement between the parties, defendant-reinsurer was obligated to reinsure plaintiff’s insured in connection with a financial guarantee insurance policy. A schedule attached to the parties’ reinsurance agreement itemized some 1300 insurance policies covered under the agreement. A provision in the agreement allowed for the exclusion of a policy if it did not meet certain rating standards as established by S & P, Moody’s, or certain internal standards established by plaintiff as of the effective date of the agreement. Defendant contended, among other things, that because plaintiff’s internal rating was not static, discovery was necessary to determine whether the financial guaranty policy was “below investment grade” according to plaintiff’s standards. The court rejected defendant’s contention, finding that the exclusion provision in the reinsurance agreement was unambiguous and plainly excluded the financial guaranty policy whose rating as of the effective date of the agreement was not in dispute. The court also dismissed defendant’s counterclaims as necessarily failing by virtue of its interpretation of the reinsurance agreement. The court, however, neglected to find that defendant engaged in bad faith by refusing to attend to its payment obligations under the agreement in connection with the financial guaranty policy.
CIFG Assur. N. Am., Inc. v Assured Guar. Corp., Sup Ct, New York County, June 14, 2011, Kapnick, J., Index No. 651090/2010