Policyholder Cannot Collect $22M Claim From Reinsurers, Brokers

A policyholder cannot sidestep its insurer by collecting a $22 million claim from 10 reinsurers and insurance brokers, a federal appeals court said Friday, in a ruling involving a Willis Towers Watson PLC captive manager.

The complex case involves a network of insurance and reinsurance agreements between several companies, according to the ruling by the U.S. Court of Appeals for the District of Columbia Circuit in Vantage Commodities Financial Services I, LLC v. Assured Risk Transfer PPCC, LC et al.

New York-based Vantage, which finances retail energy companies, entered into a loan agreement extending credit to Glacial Energy Holdings, according to the ruling.

Seeking to mitigate its risk, Vantage retained New York-based Equifin Risk Solutions LLC to create and manage a special purpose captive backed by reinsurance, Assured Risk. Equifin in turn retained Willis Towers Watson Management (Vermont) Ltd. to assist in ART’s formation, licensing and management.