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Catholic Mutual Relief Society v. Superior Court of the County of Los Angeles4/25/2005
rance is necessary in order to analyze this contention.
Reinsurance is a "contract . . . by which an insurer procures a third person to insure him against loss or liability by reason of such insurance." (Ins. Code, § 620.) A reinsurance contract is presumed to be a contract of indemnity for the benefit of the insurance company and the original insured has no interest in it. (Ins. Code, § 623; Ascherman v. General Reinsurance Corp. (1986) 183 Cal.App.3d 307, 312 (Ascherman).) It is " `. . . a special form of insurance obtained by insurance companies to help spread the burden of indemnification. A reinsurance company typically contracts with an insurance company to cover a specified portion of the insurance company's obligation to indemnify a policyholder . . . . This excess insurance . . . enables the insurance companies to write more policies than their reserves would otherwise sustain since guarantees the ability to pay a part of all claims. The reinsurance contract is not with the insured/policyholder. When a valid claim is made, the insurance company pays the first level insured, and the reinsurance company pays the insurance company. The reinsurance company's obligation is to the insurance company, and the insurance company vis-à-vis the reinsurer is thus the insured, or more appropriately, the "reinsured." ' " (Id. at p. 312, fn. 5, quoting Excess & Cas. Reinsurance Ass'n v. Insurance Com'r, Etc. (9th Cir. 1981) 656 F.2d 491, 492 (italics added by Ascherman court.)
The California case law antecedents to section 2017(b) were premised on the fact that Insurance Code section 11580 created a contractual relationship with all those who might be injured by an insurer's policyholders, thus vesting any eventual injured plaintiffs with a discoverable interest in the defendant's insurance policies. (Laddon, supra, 167 Cal.App.2d at p. 395.) Under Insurance Code section 11580, the injured plaintiff becomes a third party beneficiary of the insured plaintiff's liability policy. (Shafer v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone (2003) 107 Cal.App.4th 54, 68.) Because reinsurance contracts are, by statute, solely between the insurer and its reinsurer, and because the original insured has no rights in that reinsurance policy, an injured plaintiff cannot be considered a third party beneficiary to the reinsurance contracts of the plaintiff's liability insurer. Moreover, Insurance Code section 11580 does not list reinsurance policies among those as to which it is applicable. (Ins. Code, § 11580, subd. (a).) Therefore, to the extent section 2017(b) is based on earlier California decisions which established the discoverability of insurance information as an adjunct to Insurance Code section 11580, it does not apply to reinsurance policies.
Apart from the effect prior California appellate decisions might have when interpreting section 2017(b), that section was derived from former Federal Rule of Civil Procedure 26(b). (Irvington-Moore, Inc. v. Superior Court (1993) 14 Cal.App.4th 733, 737 (Irvington-Moore).) Some federal and out-of-state cases interpreting that provision or others like it have permitted discovery of reinsurance information, but only in bad faith or declaratory relief coverage actions where the insurer itself was a party and the reinsurance information was relevant to the parties' claims or defenses. (See Potomac Electric Power Co. v. California Union Ins. Co. (D.C. 1990) 136 F.R.D. 1 (Potomac) [suit by insured who paid judgment against its insurers]; Nat. Union Fire Ins. v. Continental Illinois Corp. (N.D.Ill. 1987) 116 F.R.D. 78 (Union Fire) [suit by insurer to rescind policies based on claims of misrepresentations by its insured]; (National Union Fire Ins.
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