Hartford-based Travelers Casualty and Surety Co. hasfiled breach-of-contract claims against three insurance carriersclaiming they failed to pay valid claims under a series ofreinsurance contracts.

The Travelers subisdiary, formerly known as The Aetna Casualtyand Surety Co., claims in its Tuesday lawsuits filed in U.S.District Court in Connecticut that Nationwide Mutual Insurance Co., its sistercompany National Casualty Co. and Lamorak insurance Co. failed to meetobligations totaling more than $900,000. The nearlyidentical lawsuits were brought by Hartford-based DayPitney.

Related: Travelers ordered to abide by $500M asbestospact

Underlying asbestos claims

The crux of the civil case surrounds Travelers insuringPittsburgh Corning Corp, (PCC) which sold asbestos-containingproducts for decades. Over a period of time, the company was suedby individuals alleging they suffered bodily injury from exposureto the products.

As insurance coverage was approaching exhaustion, the lawsuitsstate, PCC filed for bankruptcy protection in 2000 in the WesternDistrict of Pennsylvania. PCC's parent company continued tonegotiate with Travelers and other insurers to resolve coverageissues for the asbestos claims. Travelers subsequently satisfiedits payment obligations under a trust agreement via payments ofabout $518 million to an asbestos trust fund.

The defendant companies were among several reinsurers thatsubscribed to a series of reinsurance contracts comprising what wascalled Travelers Casualty's Blanket Excess of Loss Program. Thereinsurance contracts are commonly referred to as reinsurancetreaties.

Reinsurers promised to provide coverage

As part of the treaties, the lawsuit states the reinsurerspromised to provide reinsurance coverage to Travelers in return forits payment of premiums. The lawsuit states the reinsurers agreedto indemnify Travelers for, among other things, “each and everyloss from disaster and/or casualty which occurs during the time ofthis contract.”

Nationwide, the lawsuit states, owes Travelers $422,500, whileits sister company owes $404,170, and Lamorak owes $80,000. Thetreaties, the lawsuit states, were binding.

With regard to Nationwide, the lawsuit states “by improperlyfailing to make any such payments, Nationwide has breached thecontractual obligations it owes to Travelers Casualty under theblanket treaties.”

The lawsuit seeks the monetary damages allegedly owed by thethree companies as well as costs associated with the legalaction.

Travelers is represented by Daniel FitzMaurice and JosephScully, both of Day Pitney. Neither attorney responded to a requestfor comment Wednesday.

No one from the Columbus, Ohio-based Nationwide or NationalCasualty responded to a request for comment. In addition, no onefrom Philadelphia-based Lamorak responded to a request for commentWednesday.

Related: Reinsurance market slows

Robert Storace covers legal trends, lawsuits and analysisfor the Connecticut Law Tribune. Follow him on Twitter @RobertSCTLaw or reach him at203-437-5950.