C. Donald Ainsworth, as Successor to William Arthur Jones, Richard J. Frederick v. General Reinsurance Corporation

FAIRCHILD, Senior Circuit Judge.

This is an appeal from a judgment holding a reinsurer (General Reinsurance Corporation) liable to the receiver of an insolvent insurance company (Medallion) for the reinsured amount of insured liability, under a so-called insolvency clause of a reinsurance agreement. Federal court jurisdiction is based on diversity, and the parties agree that the law of Missouri governs substantive questions.

I

On January 1,1971, General Reinsurance entered into Agreement of Reinsurance No. 4191 with Medallion and its subsidiaries, among them Consolidated Underwriters. In late…