Establishing a claim against reinsurers issues arising under facultative contracts and treaties
Download
1 / 7

Establishing a Claim Against Reinsurers:  Issues Arising Under Facultative Contracts and Treaties - PowerPoint PPT Presentation


  • 72 Views
  • Uploaded on

Establishing a Claim Against Reinsurers:  Issues Arising Under Facultative Contracts and Treaties. Rob Merkin University of Exeter DLA Piper. The basic principle. In order to claim against the reinsurers, the reinsured must: Prove its own liability under its direct wording

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Establishing a Claim Against Reinsurers:  Issues Arising Under Facultative Contracts and Treaties' - zachery-valentine


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Establishing a claim against reinsurers issues arising under facultative contracts and treaties

Establishing a Claim Against Reinsurers:  Issues Arising Under Facultative Contracts and Treaties

Rob Merkin

University of Exeter

DLA Piper


The basic principle
The basic principle Under Facultative Contracts and Treaties

  • In order to claim against the reinsurers, the reinsured must:

    • Prove its own liability under its direct wording

    • Prove the liability of the reinsurers under their wording

  • Payment by the reinsured is not required

    • Charter Re v Fagan [1997] AC 313

    • Teal v Berkley [2013] UKSC 57


How does the reinsured prove its loss
How does the reinsured prove its loss? Under Facultative Contracts and Treaties

  • The reinsured’s liability must be established and quantified as a matter of law

  • How can that be done?

    • Reinsured can be sued to judgment

    • Reinsured can be on the wrong end of an arbitration award

    • Reinsured can settle with the assured


Being sued to judgment
Being sued to judgment Under Facultative Contracts and Treaties

  • Commercial Union v NRG [1998] 2 Lloyd’s Rep 600: foreign judgment binding unless

    • Not defended properly

    • Court had no jurisdiction

    • “Manifestly absurd”

  • WASA v Lexington [2009] Lloyd’s Rep IR 675: arguable that foreign judgment is only persuasive

  • AstraZeneca Insurance Company Ltd v XL Insurance (Bermuda) Ltd [2013] EWCA Civ 1660: WASA is correct


Arbitration award
Arbitration award Under Facultative Contracts and Treaties

  • Does an arbitration award differ from a judgment?

  • Does confidentiality of awards make any difference?

  • Must the reinsured exercise any right of appeal against an award?


Settlements
Settlements Under Facultative Contracts and Treaties

  • Common law rule: settlements not binding

    • Commercial Union v NRG [1998] 2 Lloyd’s Rep 600

  • Effect of “follow the settlements” clause

    • Insurance Co of Africa v Scor (UK) Reinsurance [1985] 1 Lloyd’s Rep 312

    • Note variation in wordings, eg “without question”

  • Effect of “claims co-operation” or “claims control” clause

    • Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd [2001]Lloyd’s Rep IR 667

    • Eagle Star Insurance Co Ltd v Cresswell[2004] Lloyd’s Rep IR 437

    • Beazley Underwriting Ltd v Al Ahleia Insurance Co[2013] EWHC 677 (Comm)


The xl loss settlements clause
The XL “loss settlements” clause Under Facultative Contracts and Treaties

Reinsurers will follow any settlement “within the terms and conditions of the original policies” and “within the terms and conditions of this reinsurance”

  • Hill v Mercantile & General [1996] LRLR 160: not pure FTS

  • Equitas v R&Q [2009] EWHC 2787 (Comm): reinsured must act reasonably

  • IRB BrasilReassegurosv CX Reinsurance [2010] EWHC 974 (Comm): reinsured must act reasonably

  • New Zealand Local Government Ins Corv R+V VersicherungAG [2013] NZHC 690: assertion of loss not enough


ad