Bellefonte Reinsurance Co. v. The Aetna Cas. & Sur. Co., 903 F.2d 910 (2d Cir. 1990). · Go Syfert
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Bellefonte Reinsurance Co. v. The Aetna Cas. & Sur. Co., 903 F.2d 910 (2d Cir. 1990). Cases Citing This Book View Copy Cite
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cited 3× by 3 distinct cases, 2000–2017 · 2 courts · …the proper standard for appellate review of a pure textual construction by the district court, whatever the procedural posture of the case, is de novo. at p. 912 ✓
224 citation events (150 in the last 25 years) across 17 distinct courts.
Strongest positive: Zeiler v. Deitsch (ca2, 2007-08-23)
Treatment trajectory · 1990 → 2026 · click a year to view as-of
1990 2008 2026
Top citers, strongest first. 45 distinct citers. How cited ↗
discussed Cited as authority (verbatim quote) Zeiler v. Deitsch
2d Cir. · 2007 · signal: see · quote attribution · 1 verbatim quote · confidence high
the proper standard for appellate review of a pure textual construction by the district court, whatever the procedural posture of the case, is de novo.
discussed Cited as authority (verbatim quote) In Re: The Duplan Corporation
1st Cir. · 2000 · quote attribution · 1 verbatim quote · confidence high
the proper standard for appellate review of a pure textual construction by the district court, whatever the procedural posture of the case, is de novo.
discussed Cited as authority (quoted) Fireman's Fund Ins. Co. v. OneBeacon Ins. Co.
2d Cir. · 2022 · quote attribution · 1 verbatim quote · confidence low
the sole issue presented on this appeal is whether the reinsurers are obligated to for an amount greater than the amounts stated in the reinsurance certificates.
discussed Cited as authority (quoted) Federal Housing Finance Agency v. Nomura Holding America, Inc.
2d Cir. · 2017 · quote attribution · 1 verbatim quote · confidence low
the proper standard for appellate review of a pure textual construction by the district court, whatever the procedural posture of the case, is de novo.
discussed Cited as authority (quoted) The North River Insurance Company v. Ace American Reinsurance Company (2×) also: Cited "see, e.g."
2d Cir. · 2004 · quote attribution · 1 verbatim quote · confidence low
thus, we find the clause applies both to settlements and to judgments.
cited Cited as authority (rule) Lorenzo P Quesnel, Jr. and Amy Quesnel
Bankr. D. Vt. · 2025 · confidence medium
Co., 903 F.2d 910, 912 (2d Cir. 1990)) (“The Bankruptcy Court’s interpretation of the text of the Plan, the Confirmation Order, and the Final Decree are conclusions of law reviewed de novo.”).
cited Cited as authority (rule) United States v. Quesnel
D. Vt. · 2025 · confidence medium
Co., 903 F.2d 910, 912 (2d Cir. 1990)) (“The Bankruptcy Court’s interpretation of the text of the Plan, the Confirmation Order, and the Final Decree are conclusions of law reviewed de novo.”).
discussed Cited as authority (rule) Global Reinsurance Corporation of America v. Century Indemnity Company
S.D.N.Y. · 2020 · confidence medium
Bellefonte affirmed a judgment declaring that reinsurers “[are] not obligated to pay . . . any additional sums for defense costs over and above the limits on liability stated in the reinsurance certificates.” Id. at 910.
examined Cited as authority (rule) Century Indemnity Co. v. OneBeacon Insurance Co. (12×) also: Cited "see"
Pa. Super. Ct. · 2017 · confidence medium
The district court granted the reinsurers’ motion for summary judgment, holding the “Reinsurance Accepted” amount was an “overall limitation and that the reinsurance certificates were cost-inclusive and capped by that amount.” Id. at 912.
examined Cited as authority (rule) Century Indemnity Co. v. OneBeacon Insurance (5×) also: Cited "see"
Pa. Super. Ct. · 2017 · confidence medium
In Bellefonte and its progeny, the “subject to” clause stated the reinsurance was “subject to the terms, conditions and amount of liability set forth herein.” Bellefonte, supra, 903 F.2d at 911 (emphasis added).19 In the present case, however, the “subject to” clause states the reinsurance is “subject to the general conditions set forth on the reverse side.” Certificate at 1.
examined Cited as authority (rule) Global Reinsurance Corp. of America v. Century Indemnity Co. (3×)
2d Cir. · 2016 · confidence medium
Apr. 15, 2015). 2 In reaching this conclusion, the district court relied primarily on this Court’s 3 decision in Bellefonte Reinsurance Co. v. Aetna Casualty & Surety Co., 903 F.2d 910 4 (2d Cir. 1990), which considered a similar reinsurance certificate.
discussed Cited as authority (rule) Global Reinsurance Corp. v. Century Indemnity Co. (2×)
2d Cir. · 2016 · confidence medium
Century timely appealed the district court’s grant of summary judgment to Global. ' DISCUSSION We review the district court’s grant of summary judgment de novo and will affirm if “viewing the evidence in the light most favorable to the non-moving party, there is no genuine dispute as to any material fact,” Baldwin v. EMI Feist Catalog, Inc., 805 F.3d 18, 25 (2d Cir. 2015) (internal quotation marks and citation omitted). 4 In Bellefonte, we considered a reinsurance certificate that provided as follows: Provision 1 Reinsurer does hereby reinsure Aetna (herein called the Company) in respe…
examined Cited as authority (rule) Utica Mutual Insurance v. Munich Reinsurance America, Inc. (7×) also: Cited "see"
N.D.N.Y. · 2013 · confidence medium
The reinsured policy’s limit was five-million dollars, $500,000 of which was reinsured by the reinsurer. 903 F.2d at 912.
cited Cited as authority (rule) McCrary v. Barnett (In re Sea Island Co.)
S.D. Ga. · 2013 · confidence medium
Co., 903 F.2d 910, 912 (2d Cir.1990) (“The proper standard for appellate review of a pure textual construction ... is de novo.”)).
discussed Cited as authority (rule) Contrarian Funds LLC v. Aretex LLC
2d Cir. · 2010 · confidence medium
Co., 903 F.2d 910, 912 (2d Cir.1990)) (internal quotation marks omitted)); see, e.g., Truskoski v. ESPN, Inc., 60 F.3d 74, 77 (2d Cir.1995) (according deference to the district court’s interpretation of its own order).
discussed Cited as authority (rule) Cauff v. Jacom Computer Services, Inc. (In Re Jacom Computer Services, Inc.)
S.D.N.Y. · 2006 · confidence medium
Bancorp v. FDIC, 273 F.3d 509, 515 (2d Cir.2001) (applying New York law and noting that the “interpretation of an unambiguous contract is a question of law reserved for the court.”); In re Duplan Corp., 212 F.3d 144, 151 (2d Cir.2000) (“The Bankruptcy Court’s interpretation of the text of the Plan, the Confirmation Order, and the Final Decree are conclusions of law reviewed *7 de novo.”); Bellefonte Reinsurance Co. v. Aetna Casualty Surety Co., 903 F.2d 910, 912 (2d Cir.1990) (“The proper standard for appellate review of a pure textual construction is de novo.”).
cited Cited as authority (rule) In Re Johns-Manville Corp.
S.D.N.Y. · 2006 · confidence medium
Co., 903 F.2d 910, 912 (2d Cir.1990) ("The proper standard for appellate review of a pure textual construction by the district court, whatever the procedural posture of the case, is de novo.”)).
examined Cited as authority (rule) Travelers Casualty & Surety Co. v. Ace American Reinsurance Co. (3×) also: Cited "see"
S.D.N.Y. · 2005 · confidence medium
In Unigard, 4 F.3d 1049 , the Second Circuit extended the logic of Bellefonte to “follow the form” clauses and held that, where the limitation on liability provision caps the reinsurer’s liability under the certificate, “[a]ll other contractual language must be construed in light of that cap.” Id. at 1071 (quoting Bellefonte, 903 F.2d at 914). *665 Most recently, the First Circuit handed down two opinions that discuss how “follow” clauses ought to govern the interpretation of facultative reinsurance certificates.
cited Cited as authority (rule) North River Insurance v. Employers Reinsurance Corp.
S.D. Ohio · 2002 · confidence medium
Co., 903 F.2d 910, 912 (2d Cir.1990)("follow the fortunes” doctrine burdens the reinsurer with risks which direct insurer bears under direct insurer's policy covering original insured). 2 .
cited Cited as authority (rule) New York City Employees' Retirement System v. Sapir
2d Cir. · 2001 · confidence medium
Co., 903 F.2d 910, 912 (2d Cir.1990) (“The proper standard for appellate review of a pure textual construction by the district court, whatever the procedural posture of the case, is de novo.”).
discussed Cited as authority (rule) In Re Sharlene De Ann Taylor
2d Cir. · 2001 · confidence medium
Co., 903 F.2d 910, 912 (2d Cir.1990) ("The proper standard for appellate review of a pure textual construction by the district court, whatever the procedural posture of the case, is de novo."). 13 Duplan, 212 F.3d at 151 . 14 At issue here is whether the NYCERS employee pension contributions, required by N.Y.
cited Cited as authority (rule) Goldman, Sachs & Co. v. Esso Virgin Islands, Inc.
2d Cir. · 2000 · confidence medium
Co., 903 F.2d 910, 912 (2d Cir.1990) (“The proper standard for appellate review of a pure textual construction by the district court, whatever the procedural posture of the case, is de novo.”).
discussed Cited as authority (rule) MICH. TP. PLAN v. Fed. Ins. Co.
Mich. Ct. App. · 1999 · confidence medium
A provision inserted in a reinsurance contract for that purpose is commonly referred to as a "follow the fortunes" clause because it requires that "`the reinsurer will follow the fortunes or be placed in the position of the [insurer].'" Bellefonte Reinsurance Co. v. Aetna Casualty & Surety Co., 903 F.2d 910, 912 (C.A.2, 1990), quoting Koehnen, Administration and Maintenance of Business in Force, which appears in Strain, Reinsurance (New York, NY: College of Insurance, 1980), p. 509.
discussed Cited as authority (rule) TIG Premier Insurance v. Hartford Accident & Indemnity Co.
S.D.N.Y. · 1999 · confidence medium
The standard, short-form Reinsurance Certificate that constitutes the written contract by which TIG agrees to reinsure Hartford for a portion of Hartford’s risk in insuring Dow 1 includes within a box entitled “Reinsurance Accepted” the following language: “$150,000 each oecur-rence/NIL aggregate, being 20% P/O $750,-000 each occurrenee/NIL aggregate, excess item 5.” Interpreting similar contracts in Bellefonte Reinsurance Co. v. Aetna Cas. and Surety Co., 903 F.2d 910, 911 (2d Cir.1990) and Unigard Security Ins.
discussed Cited as authority (rule) Texaco A/S (Denmark) v. Commercial Insurance
2d Cir. · 1998 · confidence medium
Moreover, in reviewing the interpretation of the parties’ insurance poli-eies, “[t]he proper standard for appellate review of a pure textual construction by the district court, whatever the procedural posture of the case, is de novo.” Bellefonte Reinsurance Co. v. Aetna Casualty & Surety Co., 903 F.2d 910, 912 (2d Cir.1990).
discussed Cited as authority (rule) Texaco A/S (Denmark) v. Commercial Insurance Co. Of Newark, Nj
2d Cir. · 1998 · confidence medium
Moreover, in reviewing the interpretation of the parties' insurance policies, "[t]he proper standard for appellate review of a pure textual construction by the district court, whatever the procedural posture of the case, is de novo." Bellefonte Reinsurance Co. v. Aetna Casualty & Surety Co., 903 F.2d 910, 912 (2d Cir.1990).
examined Cited as authority (rule) Allendale Mutual Ins. Co. v. Excess Ins. Co., Ltd. (3×) also: Cited "see, e.g."
S.D.N.Y. · 1997 · confidence medium
All claims involving this reinsurance, when settled by the [Insurer], shall be binding on the Reinsurer, which shall be bound to pay its proportion of such settlements, and in addition thereto... its proportion of expenses ... incurred by the [Insurer] in the investigation and settlement of claims or suits____” Bellefonte, 903 F.2d at 911.
examined Cited as authority (rule) Allendale Mut. Ins. Co. v. Excess Ins. Co., Ltd. (3×)
S.D.N.Y. · 1997 · confidence medium
Bellefonte, 903 F.2d at 913.
examined Cited as authority (rule) Allendale Mutual Insurance v. Excess Insurance (3×)
S.D.N.Y. · 1997 · confidence medium
Bellefonte, 903 F.2d at 913.
discussed Cited as authority (rule) Martin W. Hoffman, Trustee v. Astroline Company, Astroline Company, Inc., and Astroline Connecticut, Inc.
2d Cir. · 1996 · confidence medium
The only reasonable interpretation of the lease is that it was for an original three-year term, and only thereafter terminable on ninety days' notice. 13 In assessing a bankruptcy court's interpretation of a contract, we review its textual interpretation de novo, see Bellefonte Reinsurance Co. v. Aetna Casualty & Surety Co., 903 F.2d 910, 912 (2d Cir.1990), but its findings regarding extrinsic evidence only for clear error, see Network Publishing Corp. v. Shapiro, 895 F.2d 97, 99 (2d Cir.1990). 14 Hoffman urges that the ninety-day termination provision must apply to both the automatic renewals…
cited Cited as authority (rule) North River Insurance v. Cigna Reinsurance Co.
3rd Cir. · 1995 · confidence medium
Co., 903 F.2d 910, 914 (2d Cir.1990); see also Kramer, supra, at 13 (“[T]he concept of follow fortunes cannot create a reinsurance where none exists.”).
cited Cited as authority (rule) North River Insurance Company v. Cigna Reinsurance Company
3rd Cir. · 1995 · confidence medium
Co., 903 F.2d 910, 914 (2d Cir.1990); see also Kramer, supra, at 13 ("[T]he concept of follow fortunes cannot create a reinsurance where none exists.").
examined Cited as authority (rule) Aetna Casualty & Surety Co. v. Home Insurance (4×) also: Cited "see, e.g."
S.D.N.Y. · 1995 · confidence medium
Id. at 913.
cited Cited as authority (rule) Affiliated FM Insurance v. Constitution Reinsurance Corp.
Mass. · 1994 · confidence medium
Bellefonte, supra at 914.
cited Cited as authority (rule) North River Insurance v. Philadelphia Reinsurance Corp.
D.N.J. · 1993 · confidence medium
Co., 903 F.2d 910, 912-14 (2d Cir.1990).
discussed Cited as authority (rule) Associated Metals & Minerals Corp. v. Jasmine
2d Cir. · 1993 · confidence medium
Bellefonte Reinsurance Co. v. Aetna Casualty & Surety Co., 903 F.2d 910, 912 (2d Cir.1990) (proper standard for appellate review of a pure textual construction by district court is de novo); United States v. International Bhd. of Teamsters, 899 F.2d 143 , 148 n. 5 (2d Cir.1990) {de novo review of district court’s interpretation of language of document such as contract or bylaw); Network Publishing Corp. v. Shapiro, 895 F.2d 97, 99 (2d Cir.1990) (interpretation of contract is generally a question of law and subject to de novo review).
discussed Cited as authority (rule) Associated Metals & Minerals Corp. v. S/S Jasmine
2d Cir. · 1993 · confidence medium
Bellefonte Reinsurance Co. v. Aetna Casualty & Surety Co., 903 F.2d 910, 912 (2d Cir.1990) (proper standard for appellate review of a pure textual construction by district court is de novo ); United States v. International Bhd. of Teamsters, 899 F.2d 143 , 148 n. 5 (2d Cir.1990) (de novo review of district court's interpretation of language of document such as contract or bylaw); Network Publishing Corp. v. Shapiro, 895 F.2d 97, 99 (2d Cir.1990) (interpretation of contract is generally a question of law and subject to de novo review).
discussed Cited as authority (rule) Christiania General Insurance Corporation of New York v. Great American Insurance Company
2d Cir. · 1992 · confidence medium
Co. for Property & Casualty Ins., 697 F.2d 79, 81 (2d Cir.1982), or in excess of its agreed-to exposure, see Bellefonte Reinsurance Co. v. Aetna Casualty & Surety Co., 903 F.2d 910, 912-14 (2d Cir.1990), this is not a case where it can be said requiring indemnification would impose liability on Christiania “for risks not encompassed by the underlying policy.” 1 Dunham § 15.05[2]; cf. Jackson v. St.
examined Cited as authority (rule) American Marine Insurance Group v. Neptunia Insurance (3×) also: Cited "see"
S.D.N.Y. · 1991 · confidence medium
Co., 903 F.2d 910, 912 (2d Cir.1990).
examined Cited as authority (rule) Unigard Security Insurance v. North River Insurance (3×)
S.D.N.Y. · 1991 · confidence medium
The Second Circuit has subsequently reaffirmed the validity of the “follow the fortunes” doctrine in Bellefonte, 903 F.2d at 912, stating that it “burdens the reinsurer with those risks which the direct insurer bears under the direct insurer’s policy covering the original insured.” The authorities cited above define the scope of a reinsurer’s obligation.
discussed Cited "see" Glob. Reins. Corp. of Am. v. Century Indem. Co. (2×) also: Cited "see, e.g."
2d Cir. · 2021 · signal: see · confidence high
See 903 F.2d at 911 .
discussed Cited "see" Zeiler v. Deitsch
2d Cir. · 2007 · signal: see · confidence high
See Bellefonte Reinsurance Co. v. Aetna Casualty & Surety Co., 903 F.2d 910, 912 (2d Cir.1990) (“The proper standard for appellate review of a pure textual construction by the district court, whatever the procedural posture of the case, is de novo.”).
discussed Cited "see, e.g." North River Insurance v. ACE American Reinsurance Co.
2d Cir. · 2004 · signal: see also · confidence medium
See Travelers Cas. & Sur., 734 N.Y.S.2d 531 , 760 N.E.2d at 329; see also Bellefonte, 903 F.2d at 913 (follow-the-fortunes doctrine does not require reinsurer to indemnify losses in excess of the reinsurance certificate’s stated policy limits); NAPAC, 697 F.2d at 81 (reinsurer not required, under follow-the-fortunes doctrine, to indemnify cedent for punitive damage award not contemplated by the terms of the insurance policy).
discussed Cited "see, e.g." United States v. One Parcel Of Property Located At 414 Kings Highway, Fairfield, Connecticut, Defendant
2d Cir. · 1997 · signal: see, e.g. · confidence medium
See, e.g., Bellefonte Reinsurance Co. v. Aetna Casualty and Surety Co., 903 F.2d 910, 912 (2d Cir.1990) ("The proper standard for appellate review of a pure textual construction by the district court, whatever the procedural posture of the case, is de novo.") (citations omitted).
discussed Cited "see, e.g." United States v. One Parcel of Property
2d Cir. · 1997 · signal: see, e.g. · confidence medium
See, e.g., Bellefonte Reinsurance Co. v. Aetna Casualty and Surety Co., 903 F.2d 910, 912 (2d Cir.1990) (“The proper standard for appellate review of a pure textual construction by the district court, whatever the procedural posture of the case, is de novo.”) (citations omitted).
Retrieving the full opinion text from the archive…
Bellefonte Reinsurance Co., Mission Insurance Co., the Insurance Co. Of the State of Pennsylvania, North American Co. For Property and Casualty Insurance, Constitution Reinsurance Corp. And Gerling Global Reinsurance Co.
v.
The Aetna Casualty and Surety Co.
1164.
Court of Appeals for the Second Circuit.
May 18, 1990.
903 F.2d 910
Cited by 21 opinions  |  Published
3 passages pin-cited by 3 cases
Pinpoint authority: #15,962 of 633,719
Citer courts: Second Circuit (3)

903 F.2d 910

BELLEFONTE REINSURANCE CO., Mission Insurance Co., The
Insurance Co. of the State of Pennsylvania, North American
Co. for Property and Casualty Insurance, Constitution
Reinsurance Corp. and Gerling Global Reinsurance Co., Appellees,
v.
The AETNA CASUALTY AND SURETY CO., Appellant.

No. 1164, Docket 90-7009.

United States Court of Appeals,
Second Circuit.

Argued April 18, 1990.
Decided May 18, 1990.

Deborah F. Cohen, Philadelphia, Pa. (Henry M. Justi, and Pepper, Hamilton & Scheetz, Philadelphia, Pa.; Howard S. Veisz, Mark Platt, and Kornstein, Veisz & Wexler, New York City, on the brief) for appellant Aetna Cas. and Sur. Co.

Frank M. Nicoletti, New York City (George J. Koelzer, Clarkson S. Fisher, Jr., and Ober, Kaler, Grimes & Shriver, New York City, on the brief) for appellees.

Before TIMBERS, PRATT and MINER, Circuit Judges.

TIMBERS, Circuit Judge:

[*~910]1

Appellant Aetna Casualty and Surety Co. ("Aetna") appeals from a summary judgment entered November 28, 1989, in the Southern District of New York, John F. Keenan, District Judge, in favor of appellees, six reinsurance companies ("the reinsurers"). The district court held that the reinsurers were not obligated to pay Aetna any additional sums for defense costs over and above the limits on liability stated in the reinsurance certificates.

2

The sole issue on appeal is whether the reinsurers are obligated to pay additional sums for defense costs over and above the limits stated in the reinsurance certificates.

3

For the reasons which follow, we affirm the judgment of the district court.

I.

4

We summarize only those facts and prior proceedings believed necessary to an understanding of the issue raised on appeal.

5

This appeal arises out of the explosion of litigation over the Dalkon Shield intrauterine device. Aetna was the primary insurer of A.H. Robins Co., manufacturer of the Dalkon Shield. Appellees are six reinsurance companies that agreed to reinsure a portion of Aetna's risk.

6

From 1968 through 1977, Aetna issued primary and excess insurance policies which insured Robins against liability for personal injuries arising from use of Robins' products. From 1971 through 1976, the reinsurers issued certificates of facultative reinsurance which would reinsure specified portions of the excess insurance policies issued by Aetna for Robins.

[*~911]7

After a number of products liability actions were brought against Robins, Aetna and Robins had a dispute over the extent of Aetna's liability as insurer for expenses incurred in defending the actions. Robins commenced a declaratory judgment action against Aetna in the Chancery Court in Richmond, Virginia. It sought a decision that defense costs were to be paid by Aetna, regardless of whether those defense costs exceeded the limitations of liability stated in the excess insurance policies. In 1984, the parties settled their dispute. Aetna agreed to pay an amount substantially in excess of the cap stated in the policies ($72 million more, according to appellees). The reinsurers did not participate in these settlement negotiations. They did not sign the agreement.

8

After signing the settlement agreement, Aetna turned to the reinsurers for a portion of the excess. Aetna had signed separate reinsurance agreements with each of the six reinsurers, but all of the certificates contain relevant provisions which are substantially the same. The following excerpts are from the certificate of appellee Constitution Reinsurance Corp.:

9

"[Provision 1]

10

[Reinsurer] ... [d]oes hereby reinsure Aetna ... (herein called the Company) in respect of the Company's contract hereinafter described, in consideration of the payment of the premium and subject to the terms, conditions and amount of liability set forth herein, as follows....

11

[Provision 2]

Reinsurance Accepted

12

$500,000 part of $5,000,000 excess of $10,000,000 excess of underlying limits ...

13

[Provision 3]

14

The Company warrants to retain for its own account ... the amount of liability specified ... above, and the liability of the Reinsurer specified ... above [i.e., amount of reinsurance accepted] shall follow that of the Company....

15

[Provision 4]

16

All claims involving this reinsurance, when settled by the Company, shall be binding on the Reinsurer, which shall be bound to pay its proportion of such settlements, and in addition thereto, in the ratio that the Reinsurer's loss payment bears to the Company's gross loss payment, its proportion of expenses ... incurred by the Company in the investigation and settlement of claims or suits...."

[*912]17

The reinsurers conceded that they were liable up to the amount of the limitation of liability provisions (Provisions 1 and 2) of each of the reinsurance certificates, but refused to pay any share of the excess amount. Aetna sought a sum totalling more than $5 million--from all of the reinsurers combined--in excess of the liability caps.

18

The reinsurers commenced the instant action in 1985, seeking a declaratory judgment limiting their liability to the amount stated in the reinsurance certificates. Aetna answered and counterclaimed for a declaratory judgment that the reinsurance certificates obligated the reinsurers to "follow the fortunes" of Aetna and indemnify Aetna for the excess defense costs owed to Robins. The reinsurers and Aetna both moved for summary judgment.

19

In an opinion dated September 5, 1989, the district court held that the dollar amount typed in the column entitled "Reinsurance Accepted" was an overall limitation, and that the reinsurance certificates were cost-inclusive and capped by that amount. In an opinion dated November 21, 1989, the court denied Aetna's motion for reconsideration. The order granting the reinsurers' motion for summary judgment was entered November 28. This appeal followed.

II.

20

Since this is an appeal from a summary judgment, we review the record in the light most favorable to appellant. Kronfeld v. Trans World Airlines Inc., 832 F.2d 726, 731 (2 Cir.1987), cert. denied, 485 U.S. 1007 (1988). The material facts are undisputed. The dispute is over the interpretation of the text of the reinsurance certificates. The proper standard for appellate review of a pure textual construction by the district court, whatever the procedural posture of the case, is de novo. Meyers v. Selznick Co., 373 F.2d 218, 222 n. 2 (2 Cir.1966) (Friendly, J.); Eddy v. Prudence Bonds Corp., 165 F.2d 157, 163 (2 Cir.1947) (L. Hand, J.), cert. denied, 333 U.S. 845 (1948).

III.

21

The sole issue presented on this appeal is whether the reinsurers are obligated to Aetna for an amount greater than the amounts stated in the reinsurance certificates. We are mindful in interpreting the agreements that, as with all contracts, they should be construed, if possible, so as to give effect to all of their material provisions. Spencer, White & Prentis, Inc. v. Pfizer Inc., 498 F.2d 358, 363 n. 23 (2 Cir.1974).

22

(A)

23

We turn first to Aetna's contention that the "follow the fortunes" doctrine of reinsurance law obligates a reinsurer to indemnify a reinsured for all of the reinsured's defense expenses and costs, even when those expenses and costs bring the total amount to more than the explicit limitation on liability contained in Provisions 1 and 2 of each reinsurance certificate. Aetna claims that the "follow the fortunes" doctrine applies whenever the reinsured makes a reasonable settlement with the underlying insured. We reject this claim. We hold that the doctrine of "follow the fortunes" does not render the reinsurers liable in this case.

24

Aetna asserts that the third provision of each of the certificates contains a general "follow the fortunes" clause, typical of most reinsurance contracts. The doctrine of "follow the fortunes" has been defined as meaning that "the reinsurer will follow the fortunes or be placed in the position of the [insurer]." Koehnen, "Administration and Maintenance of Business in Force," Reinsurance 509 (Strain ed. 1980); see also Kramer, "The Nature of Reinsurance," Reinsurance, supra, at 11-12 (reinsurer shall "follow the fortunes" of the insured as if the reinsurer were a party to the original insurance). Basically, the doctrine burdens the reinsurer with those risks which the direct insurer bears under the direct insurer's policy covering the original insured. American Ins. Co. v. North American Co. for Property and Casualty Ins., 697 F.2d 79, 81 (2 Cir.1982) ("AIC "); see also Gerathewohl, 1 Reinsurance Principles and Practice 466 (1980).

25

The reinsurers do not dispute that they must follow Aetna's fortunes with respect to the Robins settlement up to the liability cap. Aetna, however, contends that the reinsurers are liable beyond the stated limits where, as here, the excess was for "reasonable" defense costs expended on settlement in "good faith" of a dispute arising from the underlying policy.

26

According to Aetna, that result is required by our decision in AIC. There, the reinsurer agreed to assume part of the risk of damage awards assessed against the underlying insured. In one action, a jury awarded punitive damages against the insured. The underlying policy was ambiguous as to whether punitive damages were included. Rather than appeal, however, the insurer decided to settle in an amount that included part of the punitive damage award. The insurer then demanded from the reinsurer an amount that included a proportional amount of the punitive damage award. We held that, despite the ambiguity, punitive damages were not covered by the underlying policy. We declined to apply the "follow the fortunes" doctrine to hold the reinsurer liable. AIC, supra, at 81.

27

Although the result in AIC was in favor of the reinsurer, Aetna seizes on the following language in that opinion to support its contention here:

28

"In some cases in which there is a genuine ambiguity over what a settlement covers, a 'follow the fortunes' clause may oblige a reinsurer to contribute to a settlement even though it might encompass excluded claims."

29

Id.

30

Assuming arguendo that there was such ambiguity in the Aetna-Robins policies, the quoted dictum in AIC does not render appellees liable. In that case, there was no question of a cap on liability in the reinsurance agreement, only with respect to the scope of coverage in the underlying policy. The amount in question was less than the cap. There is nothing in AIC (nor in any other case cited by Aetna), which leads to the conclusion that a "follow the fortunes" clause can render a reinsurer liable for an amount in excess of the bargained-for coverage. Id.

31

To read the reinsurance certificates in this case as Aetna suggests--allowing the "follow the fortunes" clause to override the limitation on liability--would strip the limitation clause and other conditions of all meaning; the reinsurer would be obliged merely to reimburse the insurer for any and all funds paid. Such a reading would be contrary to the parties' express agreement and to the settled law of contract interpretation.

32

The "follow the fortunes" clauses in the certificates are structured so that they coexist with, rather than supplant, the liability cap. To construe the certificates otherwise would effectively eliminate the limitation on the reinsurers' liability to the stated amounts. Calvert Fire Ins. Co. v. Yosemite Ins. Co., 573 F.Supp. 27, 29 (E.D.N.C.1983) (reinsurers' liability followed the fortunes of insurer only within limits specified in reinsurance certificate).

33

We agree with the district court that "the limitation is to be a cap on all payments by the reinsurer." We hold that the district court correctly read the first two provisions of the reinsurance certificates to cap the reinsurers' liability, and that the "follow the fortunes" doctrine does not allow Aetna to recover defense costs beyond the express cap stated in the certificates.

34

(B)

35

We turn next to Aetna's contention that the phrase "in addition thereto," set forth in the fourth provision of each of the reinsurance certificates, indicates that liability for defense costs is separate from liability for the underlying losses sustained by Robins (i.e., Robins' direct liability to the Dalkon Shield claimants). According to Aetna, that phrase indicates that the monetary limitation on liability set forth in the first two provisions of the certificates caps only the reinsurers' liability for the underlying losses, not the reinsurers' liability for defense expenses and costs. We disagree.

36

We read the phrase "in addition thereto" merely to differentiate the obligations for losses and for expenses. The phrase in no way exempts defense costs from the overall monetary limitation in the certificate. This monetary limitation is a cap on all payments under the certificate. In our view, the "in addition thereto" provision merely outlines the different components of potential liability under the certificate. It does not indicate that either component is not within the overall limitation.

37

Aetna contends that the reinsurer's duty to indemnify the insurer is different and separate from the reinsurer's duty to defend. In support of this contention, it points to the statement in Federal Ins. Co. v. Cablevision Systems Devel. Co., 662 F.Supp. 1537, 1539 (E.D.N.Y.), aff'd, 836 F.2d 54 (2 Cir.1987), that an insurer's duty to defend is, in theory, "essentially limitless." That statement has no application to the instant case. Here, the limitation on liability provision capped the reinsurers' liability under the certificates. All other contractual language must be construed in light of that cap.

38

Likewise, Aetna's reliance on Peerless Ins. Co. v. Inland Mutual Ins. Co., 251 F.2d 696 (4 Cir.1958), is misplaced. In Peerless the reinsurer was held liable for an amount, agreed to in a settlement, in excess of the stated limit. The court in that case, however, found that the reinsurer played such a substantial role in the settlement of the underlying claim that it acted as a co-insurer. Id. at 703-04. In the instant case, by contrast, the reinsurers took no part in negotiations and never agreed to the settlement between Aetna and Robins.

39

We are aware of the unreported opinion to the contrary in Penn Re, Inc. and Calvert Ins. Co. v. Aetna Casualty and Surety Co., No. 85-385-Civ.-5 (E.D.N.C. June 24, 1987). There, the court read virtually identical reinsurance certificates to bind two reinsurers for an amount which exceeded the face amount of the reinsurance certificates. We decline to follow the reasoning of that opinion. There, the court did not consider the "subject to" clause of the first provision, which makes the "in addition thereto" language "subject to" the cap on liability in the second provision.

40

There is no difference whether Aetna's demand is considered one for additional expenses, for additional settlement contributions, or that the reinsurers follow the liability of Aetna. Whatever the demand, the reinsurers' entire obligation is quantitatively limited by the dollar amount the reinsurers agreed to reinsure. Once the reinsurers have paid up to the certificate limits, they have no additional liability to Aetna for defense expenses or settlement contributions. Any other construction of the reinsurance certificates would negate the phrase "the reinsurer does hereby reinsure Aetna ... subject to the ... amount of liability set forth herein." (emphasis added). The reinsurers are liable only to the extent of the risk they agreed to reinsure. They cannot be liable for the insurer's action in excess of the agreement.

41

We hold that the "in addition thereto" language of the fourth provision of the reinsurance certificates does not exempt defense costs from the overall limitation on liability set forth in the first two provisions of each certificate. Rather, we hold that these costs are "subject to" the express cap on liability in each certificate.

IV.

To summarize:

42

We reject Aetna's contentions that the "follow the fortunes" doctrine, or the "in addition thereto" language in each reinsurance certificate, exempts defense costs from the clauses limiting the reinsurers' overall liability under the certificates. We hold that these costs are "subject to" the express cap on liability set forth in each certificate.

[*~913]43

Affirmed.