Courts In 2025 Further Cracker Opened The Door For Policyholders To Access Insurers’ Reserve And Reinsurance Information

Insurers typically fight pretty aggressively to preclude disclosure of reserve and reinsurance information during discovery battles with their policyholders. They argue that this type of information is irrelevant, immaterial and protected as confidential. Many courts have agreed with this assessment and have limited the type of information a policyholder can obtain. However, in 2025, a number of courts further opened that door and allowed policyholders to dig deeper into how their insurers evaluate their claims, whether their insurers were offering honest and fair valuations and whether they were reserving their claims at one amount and offering their policyholders a different, much lower amount. Required disclosure of reserve and reinsurance information usually came in cases involving bad faith claims.

In Mandarin Oriental, Inc. v. HDI Global Insurance Company and Assicurazioni Generali, the Magistrate Judge issued an opinion granting in part and denying in part the policyholder’s motion to compel its insurers to produce reinsurance and reserve information in a case involving business interruption expenses due to COVID 19. The policy in that case provided certain coverage for those types of claims. In granting the policyholder’s motion to compel reinsurance information, the court noted that such information could reflect the insurers’ understanding of the risk that the claim posed, the merits of the claim and the likelihood of coverage. Likewise, the court allowed discovery of reserve information in this bad faith case, noting that the information could provide an insight into the insurers’ motivations as to why it did not pay the full value of the claim. (Case No. 1:23-c-04951-JOC-SLC, U.S.D.C., Southern District of New York, June 2025)

In LEV Investments, Inc. v. Princeton Excess and Surplus Lines, the policyholders filed a motion to compel the insurer’s loss reserve information claiming that this information was relevant to their claims alleging bad faith and violations of the Texas Insurance Code. Like most insurers, the insurer in this case argued that the information was wholly irrelevant to the policyholder’s claim. In granting the motion to compel, however, the court noted that the loss reserves could provide evidence of a pretextual investigation and could show that the insurer knew or should have known that liability was reasonably clear yet still denied full payment of the claim. (Case No. 3:24-cv-02463-L, U.S.D.C., Northern District of Texas, Oct. 2025).

The two above-noted cases are only a few that were rendered in 2025 that further opened the door for policyholders to obtain reserve and reinsurance information. Obtaining that information allowed them to test whether their insurers were being honest brokers in evaluating their cases. To the extent an insurer refuses to fairly evaluate and promptly pay a claim, it opens itself up to a bad faith claim that could be supported by disclosure of its reserve and reinsurance information. The lesson for insurers: treat your policyholders fairly to begin with!