Follow the Fortunes and Allocation: An Update

Peter Chaffetz and Cecilia Moss, Journal of Reinsurance, Spring ‘09. Introduction: The phrase “follow the fortunes” (or “follow the settlements”) is familiar to all who work with reinsurance claims. Indeed, it is rare to see a reinsurance dispute without some discussion of the scope of this principle. Nonetheless, the question of what the proper boundaries of this doctrine should be, particularly with respect to allocation of settlements, remains open. In New York, there appears to be disagreement between the Second Circuit (the federal intermediate appellate court) and the state’s intermediate appellate court as to the doctrine’s application to allocation questions.

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