The U.S. Court of Appeals for the Third Circuit has applied New York law in a case involving a reinsurer’s duty to indemnify, effectively reversing the district court’s ruling in favor of the Pennsylvania-based insured in a suit that sprang from roughly $500,000 in asbestos-related claims.
The Third Circuit agreed with the lower court’s reading of the contract between an insurance company and its reinsurer, but held that the law of the state with the strongest tie to the contract would prevail in its interpretation. The Third Circuit ruled that the state would be New York, not Pennsylvania, which has unsettled law regarding prompt-notice provisions in reinsurance contracts.
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