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January 19, 1995


The opinion of the court was delivered by: DAVID N. EDELSTEIN

 EDELSTEIN, District Judge:

 This action arises out of a series of insurance transactions involving Allstate Insurance Company ("Allstate" or "plaintiff") and defendants, thirty-three reinsurance companies. *fn1" Pursuant to New York Insurance Law section 1213(c)(1), Allstate contends that each defendant must post a pre-filing security in an amount sufficient to cover Allstate's claim against that defendant. In addition, Allstate and defendant Societe Centrale de Reassurance ("SCR") move for leave to amend their respective pleadings.

 Before proceeding to the facts of this case, it is helpful to review a few relevant insurance terms. "Reinsurance" is a form of insurance provided by one insurance company, "the reinsurer," to another insurance company, "the reinsured." See Reinsurance 661-62 (Robert W. Strain ed. 1980). The goal of reinsurance is to indemnify the reinsured for losses it sustains under insurance policies that the reinsured has issued to the general public. See id. at 6-7. Similarly, a "retrocession" is a form of reinsurance provided by one reinsurance company, "the retrocessionaire," to another reinsurance company, "the retrocedent." See id. at 662. The goal of a retrocession is to indemnify the retrocedent for losses that the retrocedent sustains under the reinsurance policies that it has issued to insurance companies. See id. at 587-88.

 Allstate alleges that its former wholly owned subsidiary, Northbrook Excess and Surplus Insurance Company ("NESCO"), entered into four reinsurance contracts with a Mexican reinsurer, Seguros La Republica ("SLR"). SLR, in turn, entered into retrocession agreements with defendants, whereby defendants agreed to reinsure SLR's reinsurance of NESCO. Under SLR's retrocessions with defendants, each retrocessionaire agreed to reinsure a portion of SLR's risks. Accordingly, defendants were to indemnify SLR for SLR's loses under the NESCO reinsurance contracts, and each defendant would receive a portion of the premiums that SLR received from NESCO.

 Allstate alleges that between 1976 and 1980, NESCO paid approximately $ 9,770,000 in premiums to SLR. Plaintiff alleges that, during this time, NESCO paid less than $ 600,000 in claims on the insurance policies that SLR had agreed to reinsure. In 1980, however, when the volume of claims increased, SLR stopped making the payments to NESCO that were mandated by the reinsurance agreements between NESCO and SLR.

 Thereafter, plaintiff alleges that NESCO contacted SLR, seeking payment of the sums that SLR owed NESCO under their reinsurance contracts. At this time, SLR informed NESCO that SLR had retroceded a percentage of the NESCO reinsurance treaties to defendants. Allstate alleges that SLR told NESCO that, under the retrocession agreements between SLR and defendants, each defendant was responsible to SLR for a percentage of NESCO's reinsurance claims. SLR claimed that it did not have sufficient funds to satisfy its obligations to NESCO because SLR had not received payments from defendant-retrocessionaires, as specified in the retrocession agreements.

 In 1985, NESCO merged into Allstate. After this merger, Allstate and SLR entered an agreement under which SLR paid to Allstate a portion of the money that SLR owed to NESCO. Further, as part of this agreement, SLR assigned to Allstate all of SLR's rights against defendant-retrocessionaires.

 Allstate brings suit against defendants and alleges three causes of action. First, Allstate contends that, as SLR's assignee, Allstate is entitled to sue defendants based on the retrocession agreements between SLR and defendants. Second, Allstate contends that defendants and NESCO had an implied contract. Allstate contends that, as NESCO's successor-in-interest, it is entitled to recover on that implied contract. Third, Allstate brings a claim for unjust enrichment.

 Three motions are currently before this Court. Allstate moves to compel defendants to post pre-filing security as required by New York Insurance Law section 1213(c)(1), which states in pertinent part:

Before any unauthorized foreign or alien insurer files any pleading in any proceeding against it, it shall either:
(A) deposit with the clerk of the court in which the proceeding is pending, cash or securities or file with such clerk a bond with good and sufficient sureties, to be approved by the court, in an amount to be fixed by the court sufficient to secure payment of any final judgment which may be rendered in the proceeding . . . . *fn2"

 For the reasons discussed below, Allstate's motion for pre-filing security is denied. Allstate's motion for leave to amend its complaint and SCR's motion for leave to amend its answer are granted.


 Allstate contends that defendants must comply with section 1213(c)(1)'s pre-filing security requirement because defendants are all "unauthorized foreign or alien insurers." None of the defendants contests Allstate's ...

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