Travelers Files Suit Against Reinsurance Co. For $675K

Aug. 17--NEW HAVEN -- The Hartford-based Travelers Insurance Co. filed a lawsuit Friday in federal court against Excalibur Reinsurance Corp. for $675,000.

According to the complaint, the Philadelphia-based Excalibur is under contract with Travelers for a 22.5 percent share of the company's reinsurance claims.

The complaint alleges that on July 22, Travelers submitted a reinsurance bill to Excalibur under that contract for $675,000. Their contract contained a provision stating that Travelers could require payments over $350,000 be made within 10 working days and Travelers submitted the bill under that provision, so the payment should have been made by Aug. 1, according to the complaint.

Travelers alleges that Excalibur still had not made the payment by Aug. 16, when the complaint was filed.

A lawyer for Travelers said Friday that the company has no comment on the litigation.

Travelers expects to submit further reinsurance bills on the claim that this matter stems from -- a payout of more than $3 million for Grant Thornton LLP, the complaint states. In addition to the $675,000 in damages, the company is asking for a judgment declaring that Excalibur is obligated to pay any future bills within the required time periods.

"Excalibur contends that it is not and will not be obligated to pay the future reinsurance claims within the time periods set forth [in the contract]," the complaint states.

Travelers insures Grant Thornton, a major accounting firm based in Chicago, which became the subject of claims that alleged "improprieties in its accounting advice," prompting Travelers to make payments on those claims, the complaint states.

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