A federal district court granted summary judgment in favor of a reinsurer who had been sued by a ceding company for failure to pay under two facultative reinsurance certificates that reinsured two excess liability policies from the 1980s. The certificates required the ceding insurer to promptly notify the reinsurer of “any event or development” that might result in a claim against the reinsurer. The reinsurer had not been provided with notice of millions of dollars worth of asbestos claims that had developed over several decades. The only correspondence between the ceding insurer and the reinsurer reflected a small potential exposure in the early 1980s that did not indicate the possibility that involvement of the certificates might follow. In the early 2000s, the insured was facing tens of thousands of asbestos bodily injury claims, and the ceding insurer engaged in lengthy and complex settlement negotiations with its insured without providing notice to the reinsurer. Ruling in the reinsurer’s favor, the court looked to the purpose of the notice provision – to provide the reinsurer with an opportunity to associate in the control and settlement of claims, as well as to ensure that the reinsurer has sufficient information at its disposal to determine whether to avail itself of that opportunity. The court also concluded that the ceding insurer’s failure to provide notice to the reinsurer was a breach of its duty of utmost good faith. Granite State Insurance Co. v. Clearwater Insurance Co., Case No. 09-10607 (USDC S.D.N.Y Mar. 31, 2014).