construction that protect individual purchasers of original insurance
policies do not apply to reinsurance.")
Accordingly, absent any indication by the New Jersey Supreme Court that
the prejudice requirement in late notice cases extends to the reinsurance
context or that the same rules of construction that apply to insurance
contracts apply to reinsurance contracts, this Court declines to add
terms to the Facultative Reinsurance that were not expressly negotiated
or bargained for by the parties. See American Centennial Ins. Co. v.
Warner-Lambert Co., 293 N.J. Super. 567, 575 (Law Div. 1995) (holding
that rule requiring appreciable prejudice in late notice cases does not
apply to situations involving excess carriers); see also Liberty Mutual,
773 F.2d at 18 (noting that reasons for imposing prejudice requirement in
late notice cases did not apply to reinsurance contracts involving
experienced insurance underwriters who bargain at arm's length).*fn3
Based on an objective assessment of the information provided to ACIC in
1985 and 1992, there was a reasonable probability that the reinsurance
would be involved. Therefore, ACIC's notice to Safety, which at the
earliest, was not provided until 1994, was untimely. BICC's motion for
summary judgment is denied.
Having determined that BICC's predecessor-in-interest failed to provide
timely notice in accordance with the terms of the Facultative Reinsurance
and that New Jersey law does not require a showing of prejudice to
prevail on a late notice defense, Safety's cross motion for summary
judgment is granted.
An appropriate Order accompanies this Opinion.
WILLIAM G. BASSLER, U.S.D.J.
This matter having come before the Court on Plaintiff's motion
for summary judgment; and on Defendant's cross motion for summary
The Court having considered the submissions of counsel; and
The Court having heard oral argument on May 7, 2001; and
For good cause shown;
It is on this 1st day of June, 2001 ORDERED that Plaintiff's motion for
summary judgment is denied; and
IT IS FURTHER ORDERED that Defendant's cross motion for summary
judgment is granted; and
IT IS FURTHER ORDERED that the Clerk of the Court shall close this