Contract analysis

1. Late Notice (Article 7). Pinnacle Atlantic's first claim alleges that QC&S failed to timely notify Pinnacle Atlantic, through Broadreach, of the Meridian Docks mass tort cluster. The Meridian Docks cluster consists of 31 commercial general liability claims arising under Policy No. CGL-2020-09844, issued to Meridian Docks Development LLC, a commercial real estate developer. The claims allege personal injuries susta

2. IBNR Misallocation (Article 5). Pinnacle Atlantic's second claim alleges that QC&S improperly allocated $22,300,000 in incurred but not reported ("IBNR") reserve strengthening to Treaty Year 2022 instead of Treaty Year 2021. Article 5 of the Treaty defines "losses incurred" for purposes of determining the aggregate net incurred loss in each treaty year. Pinnacle Atlantic contends that the $22,300,000 in IBNR devel

3. Follow-the-Fortunes (Article 11). Pinnacle Atlantic's third claim challenges the propriety of QC&S's settlement of the Veridian Financial Services E&O cluster under the follow-the-fortunes doctrine codified in Article 11 of the Treaty. The Veridian Financial Services cluster involved three related professional liability claims arising under Policy No. PL-2021-15327, issued to Veridian Financial Services, Inc., a f

Article 11 of the Treaty provides that Pinnacle Atlantic shall "follow the fortunes" of QC&S with respect to claims settlements, provided that such settlements are made "in good faith and in a businesslike manner." Pinnacle Atlantic contends that QC&S's settlement of the Veridian cluster lacked good faith and businesslike conduct because, in Pinnacle Atlantic's view, the settlement amounts were excessive relative to

4. Premium Underreporting (Article 3). Pinnacle Atlantic's fourth claim alleges that QC&S underreported ceded earned premium to Pinnacle Atlantic by $6,800,000. Under Article 3 of the Treaty, QC&S is obligated to report ceded earned premium to Pinnacle Atlantic quarterly, and the treaty premium payable by QC&S is calculated as a percentage of ceded earned premium. Pinnacle Atlantic contends that QC&S reported $38,400

Article 22.1 goes even further than the typical "arising out of or relating to" clause, because it explicitly identifies four categories of disputes that fall within its scope: disputes relating to the "formation, interpretation, performance, or breach" of the Treaty. This enumeration captures every conceivable type of treaty dispute — from questions about whether the Treaty was validly formed, to questions about wha