The Law Of Reinsurance

by Edelman, Colin; Burns, Andrew; Craig, David; Nawbatt, Akash

• ISBN13: 9780199268931
• ISBN10: 0199268932
• Format: Hardcover
• Copyright: 2005-06-16
• Publisher: Oxford University Press

Summary

Written by a team of specialists in the field, this new book is a must have for all those dealing with reinsurance law matters. It fills the gap for a much needed specialist text on reinsurance that is both practical and authoritative. This is a fully discursive text that states the position under the current law and applies it to practice. Every aspect of reinsurance law practice is covered beginning with an investigation of the definition, purpose and types of reinsurance. Guidance is given on contractual principles and terms in the reinsurance context, obligations, rights and liabilities of the reinsurer, and the choice of law.

Author Biography

Colin Edelman QC is a barrister in practice at Devereux Chambers in London. Having graduated from Clare College, Cambridge, he was called to the Bar in 1977 and became a Queen's Counsel in 1995. He was elected Head of Chambers in 2002 and a Bencher of Middle Temple in 2003. In 1993 he was appointed an Assistant Recorder and became a Recorder in 1996. His practice is predominantly in the fields of insurance, reinsurance and professional negligence and he is often appointed as an arbitrator in insurance and reinsurance disputes. Andrew Burns is a barrister at Devereux Chambers. David Craig is a barrister at Devereux Chambers. Akash Nawbatt is a barrister at Devereux Chambers.

Table of Contents

Table of Cases	xv
Table of Legislation	xxiii
1. Functions, Definitions, and Types of Reinsurance	1	(18)
A. Historical Background
B. The Functions of Reinsurance
C. Fronting
D. Retrocession
E. A Legal Definition of Reinsurance
F. Types and Methods of Reinsurance
(1) Proportional Reinsurance
(2) Non-Proportional Reinsurance
G. Facultative and Treaty Reinsurance
H. Facultative Reinsurance
(1) Proportional Facultative Reinsurance
(2) Non-Proportional Facultative Reinsurance
I. Treaty Reinsurance
J. Proportional Treaty Reinsurance
(1) Quota Share
(2) Surplus
K. Non-Proportional Treaties
(1) Excess of Loss
(2) Stop Loss
(3) Excess of Loss Ratio
(4) Aggregate Excess of Loss
L. A Hybrid Method of Reinsurance-Facultative Obligatory
2. The Formation of the Reinsurance Contract	19	(22)
A. Elements of a Contract
(1) Offer
(2) Acceptance
(3) Consideration
(4) Complete and Certain Terms
(5) Formality
B. Slips and Policies
(1) The Slip
(2) Information on the Slip
(3) Scratching the Slip
(4) Contractual Nature of the Slip
(5) The Slip Policy
(6) Writing Down
(7) Formal Policy Wording
(8) Binders and Line Slips
(9) Policy Amendments
(10) Leading Underwriters
C. Formation of Treaties
D. Writing Reinsurance at Lloyd's
E. Brokers and Intermediaries
3. The Reinsurance Contract-Construction and Terms	41	(30)
A. Construction of Reinsurance Contracts
(1) Presumption of Co-Extensive Cover
(2) Full Reinsurance Clause
(3) Slip as an Aid to Construction of Policy
B. Incorporation
(1) Does the Clause Make Sense Without Undue Manipulation?
(2) Is the Clause Germane?
(3) Is the Clause Consistent?
(4) Is the Clause Otherwise Inapposite?
(5) Unusual Clauses
(6) Effect of Incorporation
(7) Reinsured's Ability to Amend Insurance
(8) Arbitration Clauses
(9) Exclusive Jurisdiction Clauses
(10) Choice of Law Clauses
(11) Errors and Omissions Clauses
C. Implied Terms
(1) Businesslike Obligations
(2) Retention
(3) Withholding Approval of Settlements
(4) Provision of Documents and Information
(5) Costs of Defending, Investigating or Settling Claims
(6) Obligation to Follow Judgment Entered Against the Reinsured
4. Obligations of the Reinsurer	71	(24)
A. Reinsurer's Obligation to Indemnify the Reinsured
B. Obligation to Follow any Judgment Entered Against the Reinsured
C. Loss Settlements Clauses
D. Follow the Settlements
(1) Burden of Proof
(2) Risks Covered by the Reinsurance Policy
(3) Ex Gratia Payments
(4) Proper and Businesslike Steps
(5) Fraudulent Claim
(6) Commutation Agreements
(7) Effect of a Claims Co-operation Clause
E. 'Pay as may be Paid Thereon'/'Pay as may be Paid Thereon and to Follow their Settlements'
F. Follow the Fortunes
G. Diminution of the Loss
H. Aggregation
(1) One Event/One Occurrence
(2) Originating Cause/One Source or Original Cause
(3) Binding the Reinsurer to the Reinsured's Determination on Aggregation
(4) Different Aggregation Clauses in the Direct Insurance and Reinsurance Policies
(5) 'Conditions as underlying'
I. Losses Discovered or Claims Made Clause
J. Aggregate Extension Clauses
K. Limitation
(1) When does the Reinsurer's Liability to Indemnify its Reinsured Arise?
(2) Excess of Loss Reinsurance
(3) 'Actually paid'
(4) 'Pay to be paid'
5. Rights of the Reinsurer	95	(18)
A. Payment of Premium
(1) Premium Warranty Clause
(2) Implied Term
(3) Repudiation
(4) 'Premiums and claims to be settled in account'
B. Claims Co-operation Clause/Claims Control Clause
(1) Typical Features of Claims Co-operation/Control Clauses
(2) Costs of Litigation Where the Reinsurer has Withheld its Approval
(3) Claims Co-operation Clause: A Condition Precedent?
(4) Consequences of Breach of a Claims Co-operation/Control Clause Which is Not a Condition Precedent
(5) Qualification of the Reinsurer's Rights under a Claims Co-operation Clause
C. Inspection of Reinsured's Records
D. Declaratory Relief
E. Subrogation
6. Denying Liability	113	(38)
A. Non-disclosure and Misrepresentation
(1) The Duty of Utmost Good Faith
(2) Discharging the Duty of Utmost Good Faith
(3) Post-contractual Duty of Utmost Good Faith
B. Elements of the Duty of Utmost Good Faith
(1) Materiality
(2) Inducement
(3) Knowledge of the Reinsured
(4) Facts within Knowledge of Reinsurer
(5) Waiver
C. Breach of the Duty of Utmost Good Faith
(1) Avoidance
(2) Affirmation
D. Conditions and Warranties
(1) General Conditions
(2) Conditions Precedent
(3) Warranties
(4) Breach of Warranty
E. Notification
(1) Facultative Proportional Reinsurance
(2) Treaty Reinsurance
(3) Excess of Loss Reinsurance
F. Limitation
(1) Time Runs from Ascertainment of the Reinsured's Liability
(2) Prior Wrong Results in Earlier Time Bar
(3) Time Runs from Original Insured Loss or Event
(4) Time Runs from Payment by Reinsured
(5) Time Runs from Rendering of Accounts
(6) Standstill Agreements
7. Applicable Law and Jurisdiction	151	(16)
A. Applicable Law
(1) Rome Convention on Conflicts of Laws
(2) Express or Implied Choice of Law
(3) Applicable Law Where There is No Express or Implied Choice of Law
(4) Floating Choice of Law Clause
B. Jurisdiction
(1) The Position of Defendants Domiciled in the European Union and the European Free Trade Association
(2) The Position in Respect of Defendants Domiciled Outside the European Union and the European Free Trade Association
Index	167