Opinion ID: 164336
Heading Depth: 2
Heading Rank: 2

Heading: The Parties' Interpretations Of The Am-Re Reinsurance Policy

Text: 17 The provisions of the Am-Re reinsurance policy under dispute follow (with the pivotal language placed in bold by this Court): ARTICLE I BUSINESS COVERED 18 (a) [Am-Re] agrees to reimburse [ACCO-SIG], on an excess loss basis for the amounts of ultimate net loss which [ACCO-SIG] may pay for the coverages set forth below.... COVERAGES 19 General Liability, Automobile Liability, Law Enforcement Liability and Public Official Liability, Pollution Liability and Criminal Defense Liability Reimbursement Coverage as provided in the [ACCO-SIG] Liability Protection Plan document for covered [ACCO-SIG] entities ... as respects losses occurring or claims made as applicable, commencing on and after 12:01 A.M., July 1, 1997, with a retroactive date no earlier than 12:01 a.m., July 1, 1992.... ARTICLE VI 20 (a) The term occurrence as used herein means the definition as stated or in the ACCO-SIG Liability Protection Plan Document. 3 When claims made policies are involved individually or in the same Event with occurrence policies and/or other claims made policies, the date of the loss for the Event shall be determined as follows: 21 1. If an occurrence policy is identified as being involved, then the date of loss shall be the date as determined under the occurrence policy; or 22 2. If no occurrence policy is identified as being involved, then the date of loss will be the date the first claim is made under a claims made policy. 23 (b) The term Claims made, as used in the Agreement, shall mean those claims first made against the insured during the policy period and occurring on or after the retroactive date, if any. 24 NAICO argues that the plain language of the Am-Re policy states that Am-Re provided ACCO-SIG with an occurrence-based reinsurance policy for the period running from July 1, 1997, to July 1, 1999, and that it provided ACCO-SIG with a retroactive occurrence-based policy stretching back to July 1, 1992. In essence, NAICO interprets the bolded language above to mean: Am-Re agrees to reimburse ACCO-SIG for General Liability, et al., as respects losses occurring after 12:01 a.m., July 1, 1992. NAICO's conclusion derives from its argument that the Am-Re reinsurance policy follows the form of the ACCO-SIG policy with its member counties. In other words, NAICO argues that, because ACCO-SIG offers occurrence-based coverage to its member counties, Am-Re offers retroactive occurrence-based coverage to ACCO-SIG. 25 In support of this follows the form interpretation, NAICO relies on the Business Covered section of Article I(a) (as quoted above), and the definition of occurrence in Article VI(a). We agree that these provisions support NAICO's conclusion that the retroactive portions of the Am-Re policy provide occurrence-based coverage. 26 Nonetheless, we agree with the district court and find NAICO's interpretation strained. NAICO ignores the commencing on and after 12:01 A.M., July 1, 1997, language of the Coverage section of Article I(a) and renders the claims made as applicable on and after 12:01 A.M., July 1, 1997 language of that article surplusage. We must give this contractual language some meaning. See Okla. Stat. Ann. tit. 15, § 157. Moreover, this Court will not make a better contract by altering a term for a party's benefit. Max True Plastering Co., 912 P.2d at 869. 27 Am-Re offers a similarly strained interpretation of the policy. Am-Re argues that the plain language of the bolded section above states that Am-Re provides occurrence-based reinsurance for the policy period and retroactive tail coverage reinsurance from July 1, 1992, until July 1, 1997. Thus, Am-Re interprets the above clause to mean: 28 Am-Re agrees to reimburse ACCO-SIG for General Liability, et al., as respects losses occurring on and after 12:01 A.M., July 1, 1997. And Am-Re agrees to reimburse ACCO-SIG for claims made on and after 12:01 A.M., July 1, 1997, with a retroactive date no earlier than 12:01 a.m., July 1, 1992. 29 In suggesting this reading, Am-Re relies on: the definition of claims made in Article VI(b), the commencing on and after 12:01 A.M., July 1, 1997, language of the Coverage section of Article I(a), and the claims made as applicable on and after 12:01 A.M., July 1, 1997 language of Article I(a). As with NAICO, we agree that the provisions of the policy cited by Am-Re support its interpretation. 30 Nevertheless, Am-Re's interpretation ignores the definition of occurrence as provided in Article VI(a) and those portions of Article I(a) relied on by NAICO. As stated before, Oklahoma law does not allow us simply to ignore contractual language to form a more attractive contract for one party. See Okla. Stat. Ann. tit. 15, § 157; Max True Plastering Co., 912 P.2d at 869. 31 We are also unable to construct a third reading of the Am-Re reinsurance policy that comports with the canons of contractual interpretation under Oklahoma law. See Okla. Stat. Ann. tit. 15, § 157. Thus, we find that the Am-Re reinsurance policy is susceptible to two interpretations (viz., the one offered by NAICO and the one offered by Am-Re), and we hold that the Am-Re reinsurance policy is ambiguous as to the type of retroactive reinsurance provided by Am-Re. Max True Plastering Co., 912 P.2d at 869.