A retrocession indirectly “affords protection against or compensation for” an original insurer’s contract with its policyholder. See Transcon. Underwriters Agency, S. R. L. v. Am. Agency Underwriters, 680 F.2d 298, 299 n.2 (3d Cir. 1982). The reinsurer “assigns” to the retrocessionaire “all or a portion of the risk which [the reinsurer] reinsures.” See id. Validus points to authorities indicating that most retrocessions do not directly indemnify the original insurer for any losses or give the original insurer any claim against the retrocessionaire. See Travelers Indem. Co. v. Scor Reinsurance Co., 62 F.3d 74, 76 (2d Cir. 1995); China Union Lines, Ltd. v. Am. Marine Underwriters, Inc., 755 F.2d 26, 30 (2d Cir. 1985); Reinsurance 9, 20 (Robert W. Strain ed., rev. ed. 1997); H. Ernest Feer, Approach to Reinsurance 10-11 (1951); Douglas R. Richmond, Reinsurance Intermediaries: Law and Litigation, 29 U. Haw. L. Rev. 59, 59 (2006). Even though these sources show that some retrocessions do not directly cover the contracts described in paragraphs (1) and (2), they do not resolve whether Congress intended “covering” as used in paragraph (3) to mean only “directly covering” or “directly and indirectly covering.”
Validus Reinsurance, Ltd. v. United States, 415 U.S. App. D.C. 254, 259-60, 786 F.3d 1039, 1044-45 (2015).