November 28, 2017 Articles

Clarification—A Valid Exception to Functus Officio

By Sarah Miller Espinosa

General Re Life Corp. v. Lincoln National Life Insurance Co.
On March 31, 2017, the U.S. District Court for the District of Connecticut issued a ruling and order in the matter of General Re Life Corp. v. Lincoln National Life Insurance Co., No. 15-cv-1860 (D. Conn. Mar. 31, 2017). In 2002, General Re executed an Automatic Self-Administered YRT Reinsurance Agreement with Lincoln. Pursuant to that agreement, General Re had the right to increase the reinsurance premiums if the new rates were based exclusively on a change in the anticipated mortality. In the event of such an increase, the agreement specified that Lincoln could elect to recapture the life insurance policies and terminate the reinsurance. In 2014, General Re informed Lincoln and increased the rates. Lincoln demanded arbitration, asserting the rate increase was improper.

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