Fire Insurance Co. of Pittsburgh, Pa. v. LSB Industries, Inc.
ZEK has a nationwide practice representing
insurance companies in pursuit of retrospective premiums and
other reimbursable obligations from commercial insureds.
Recently, the United States Court of
Appeals for the Tenth Circuit in Denver accepted ZEK's arguments
and affirmed a judgment in favor of our client, National Union
Fire Insurance Co. of Pittsburgh, Pa. In National Union
Fire Co. of Pittsburgh, Pa. v. LSB Industries, Inc., 296
F.3d 940 (10th Cir. 2002), the court held, in a case of first
impression under Oklahoma law, that the statute of limitations
on a claim for retrospective insurance premium did not begin
to run until a final premium was computed. The case allowed
our client to recover balances due arising from coverage that
ended in 1988.
The case is significant for the insurance
industry because retrospective insurers are often obligated
to continue to pay losses for many years after coverage expires.
The LSB case links the insured's obligation to reimburse to
the insurer's obligation to pay loss. Nationally, the case
is the clearest support for the proposition that, when an
insured has an obligation to reimburse an insurer for retrospective
losses, a statute of limitations should not bar the insurer's
recovery, where the insurer waits until insured claims are
closed to seek that recovery.