Reinsurance in UK Law

Leading Cases
  • Insurance Company of Africa v Scor (UK) Reinsurance Company Ltd
    • Court of Appeal (Civil Division)
    • 22 Nov 1984

    In my judgment, the effect of a clause binding reinsurers to follow settlements of the insurers, is that the reinsurers agree to indemnify insurers in the event that they settle a claim by their assured, i.e. when they dispose, or bind themselves to dispose, of a claim, whether by reason of admission or compromise, provided that the claim so recognised by them falls within the risks covered by the policy of reinsurance as a matter of law, and provided also that in settling the claim the insurers have acted honestly and have taken all proper and businesslike steps in making the settlement.

  • Forsikringsaktieselskapet Vesta v Butcher and Others (First Appeal)
    • House of Lords
    • 26 Ene 1989

    By the reinsurance policy, the underwriters promised that if Vesta became liable for a loss under the insurance policy, then the underwriters would make good 90 per cent. The effect of a warranty in the reinsurance policy is governed by the effect of the warranty in the insurance poliicy because the reinsurance policy is a contract by the underwriters to indemnify Vesta against liability under the insurance policy.

    A reinsurer could, of course, make a special contract with an insurer and agree only to reinsure some of the risks covered by the policy of insurance, leaving the insurer to bear the full cost of the other risks. Such a contract would I believe be wholly exceptional, a departure from the normal understanding of the back-to-back nature of reinsurance and would require to be spelt out in clear terms.

  • Assicurazioni Generali SpA v CGU International Insurance Plc and Others
    • Queen's Bench Division (Commercial Court)
    • 02 May 2003

    The Defendants are bound by all settlements made by Generali (except ex gratia and without prejudice settlements) (a) provided that the claims so recognised by Generali fall within the risks covered by the contract of reinsurance as a matter of law: by which is meant in this context as explained above, provided that the claims were settled on a basis which, if and assuming it to be valid, falls within the risks covered by Generali's outward contract of reinsurance as a matter of law; and (b) provided that Generali acted honestly and took all proper and businesslike steps in making such settlements.

  • Assicurazioni Generali SpA v CGU International Insurance Plc and Others
    • Court of Appeal (Civil Division)
    • 06 Abr 2004

    It gives substance to the fact that the reinsurer cannot require the insurer to prove that the assured's claim was in fact covered by the original policy, but requires him to show that the basis on which he settled it was one which fell within the terms of the reinsurance as a matter of law or arguably did so. This and the need for the insurer to have acted honestly and taken all reasonable and proper steps in settling the claim provide adequate protection for the reinsurer.

  • Commercial Union Assurance Company Plc v NRG Victory Reinsurance Ltd
    • Court of Appeal (Civil Division)
    • 16 Mar 1998

    In my view, the matter is better treated as a question of implication into the reinsurance contract, the implied term being that, absent any provision to contrary effect, the insurer will treat the decision of a foreign court of competent jurisdiction as to the liability of the reinsured to his original insured as binding, subject only to reversal on appeal and the limits which I have mentioned.

  • Charter Reinsurance Company Ltd v Fagan
    • House of Lords
    • 22 May 1996

    It is an independent contract between reinsured and reinsurer in which the subject-matter of the insurance is the same as that of the primary insurance, that is to say, the risk to the ship or goods or whatever might be insured. The difference lies in the nature of the insurable interest, which in the case of the primary insurer, arises from his liability under the original policy: see Buckley L.J. in British Dominions General Insurance Co. Ltd. v. Duder [1915] 2 K.B. 394, 400.

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Legislation
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Books & Journal Articles
  • The Construction of Terms of Facultative Reinsurance Contracts: is Wasa v Lexington the Exception or the Rule?
    • Núm. 73-1, Enero 2010
    • The Modern Law Review
    Do reinsurers insure the liability faced by the reinsured under its original insurance contract? Where the reinsurance and direct insurance policies are written in identical terms, is it enough for...
  • Handling conflicts of interest within financial innovation. The case of regulation and supervision of Bermuda sidecars
    • Núm. 16-4, Octubre 2009
    • Journal of Financial Crime
    • 353-363
    Purpose: The purpose of this paper is to describe the experience of a financial services regulator, the Bermuda Monetary Authority (BMA), in identifying and dealing with conflicts of interest in in...
    ......In addition, background and contextual information on Bermuda reinsurancemarket relies on secondary sources describing and analyzing it.Findings – The paper argues that the BMA has approached the issue of identification and ......
  • Comment on the Decision of the House of Lords in Wasa International Insurance Co Ltd v Lexington Insurance Co [2009] UKHL 40
    • Núm. 5-1, Enero 2015
    • Southampton Student Law Review
    • Jie Zhang
    • University of Southampton
    • 15-18
    ...... Co1 hereinafter called “Wasa v Lexington”, in which arose disputes regarding which law would be applied to the interpretation of the reinsurance contract, where the primary insurance and facultative proportional reinsurance, with an “as original” clause, were governed by different law. ......
  • Fast Frenz first.
    • Núm. 2009, Marzo - Mayo 2009
    • Financial Management (UK)
    • First in ... All the latest news affecting accountants in business, including regulations updates
    ......Tobias Frenz is the first person to be awarded the CIMA certificate in Islamic finance. Frenz who is (pictured), of the family reinsurance business at Munich Re Retakaful in Malaysia, is German and a non-Muslim. But his job involves working closely with Malaysia's sharia advisory board, ......
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Law Firm Commentaries
  • Trade Credit Reinsurance Scheme
    • Mondaq UK
  • March 2017 Reinsurance Newsletter
    • LexBlog United Kingdom
    This quarter’s Squire Patton Boggs Reinsurance Newsletter focuses on the certified question sent to the New York Court of Appeals by the Second Circuit on Bellefonte. It also features regulatory up...
  • Insurance and Reinsurance Update
    • JD Supra United Kingdom
    This is our pick of the key recent legal and regulatory issues affecting the insurance and reinsurance sector. Non Party PI Insurers Liable for Costs - In the January 2019 ca...
  • Reinsurance Implications of FCA Test Case
    • JD Supra United Kingdom
    Insurers seem confident that reinsurers will take their share of the impact of the Court’s judgment. So what are the immediate reinsurance issues arising from the decision?
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