The appellant reinsurer appealed a trial judgment ordering it to indemnify the respondent retrocedant for its share of a $140 million settlement reached by the lead insurer regarding a business interruption claim.
The appellant argued it was not bound by the 'follow settlements' clause in the retrocession agreement because it had not agreed to the settlement.
The Court of Appeal dismissed the appeal, upholding the trial judge's findings that the appellant was bound by the single proviso follow settlements clause, that the settlement arguably fell within coverage as a matter of law, and that the lead insurer took proper and businesslike steps in reaching the settlement.
