In Mt. McKinley Ins. Co. v. Corning Inc., 2010 NY Slip Op 20235 (N.Y. Sup. Ct. June 14, 2010), an insured (“Corning”) moved to compel discovery of reinsurance and reserve information from its insurers, arguing that this information was relevant, material and necessary to its coverage claim. Specifically, Corning alleged that the reinsurance information sought could be relevant to the insurers’ liability for the asbestos claims at issue (including whether the insurers took inconsistent coverage positions with their reinsurers) and to rebut the insurers’ claims of late notice. As for information pertaining to the insurers’ reserves, Corning argued that it might illustrate when the insurers first became aware of the asbestos claims, which policies were triggered, how the limits of those policies applied, and whether the insurers were liable for the claims.

The court denied Corning’s request for reinsurance information, finding that it failed to offer any proof that such information was relevant to the coverage issues involved in the case, and that Corning’s discovery request was based upon mere speculation. Moreover, the court found that, under New York law, there is no per se rule requiring an insurer to produce its reinsurance agreements that might cover an underlying loss. Rather, an insurer’s obligation to produce this information is determined by the facts of a case and whether it is relevant (noting that the provisions of CPLR 3101(f) provide that a party “may” obtain discovery of the existence and contents of any insurance agreement).

The court also denied Corning’s motion to compel the insurers’ reserve information for the subject asbestos claims, distinguishing those cases in New York which have required an insurer to produce such information where its insured alleges bad faith. Because the dispute involved a disagreement over certain insurance coverage issues, but no allegations of bad faith, the court held that reserve information was likewise irrelevant.

Click here to review a copy of the court’s decision.