A U.S. District Court in Louisiana has ruled that absent a clear intent by the parties to a reinsurance contract to confer an advantage on a third party, that party has no standing to bring suit against the reinsurer. At issue in LaSalle Parish School Board v. Allianz Global Risks U.S. Ins. Co. was whether the underlying insured, LaSalle Parish School Board, could sue for recovery of a claim against the reinsurer, Allianz, under an insurance policy issued by Property Casualty Alliance of Louisiana (PCAL) to LaSalle. The insurance policy was reinsured by Allianz pursuant to a reinsurance agreement between PCAL and Allianz. Following the destruction of a high school insured by PCAL, PCAL paid the amount it owed under the insurance policy. LaSalle then sued Allianz claiming that Allianz should pay “the remainder of the monies owed under the terms and conditions of the policies.”
In granting Allianz’s motion to dismiss, the court noted that LaSalle had no standing to sue Allianz since they were not a party to the contract. The court further noted that nothing in the reinsurance agreement suggested that the parties, PCAL and Allianz, intended to grant any advantage to any party other than those named in the agreement, and the reinsurance contract did not contain a cut-through indicating the reinsurer intended to School’s out for this case assume for itself any of the policy obligations of the ceding insurer.