Helen Groom
St Paul Travelers is suing CX Re for $1.6m (£854,000) for breach of reinsurance contracts. The claim relates to reinsurance on two binders, one from 1998 and the other from 2000.
According to the claim form, filed in the High Court, CX Re signed a quota share reinsurance contract for both binders which "obliged the defendant to follow the claimants' settlements".
It alleges that "in breach of contract, the defendant [CX Re] has failed to indemnify the claimants," leading to "loss and damage" for the claimants.
The claim is made by F&G Underwriters and members of closed Syndicate 314. Syndicate 314 ceased writing new business in 2002 and was merged into St Paul Travelers Syndicate Management non-marine syndicate 5000.
Cx Re has come under criticism in recent years for its claims payments policy. In 2003, the LMBC complained to the FSA about the reinsurer's "obstructive and cynical" practices.
A spokesman for St Paul Travelers said it would be "inappropriate to comment given the stage of the proceedings".
Philip Singer, CX RE chief executive, said: "I can confirm that we have received a claim form, but cannot discuss the issue further."
