Reinsurance Contract Wordings and Disputes

Course overview

What is this seminar about?

In reinsurance contracts, it is quite common practice for the wordings, which define the obligations of the parties, to be neglected. This results in the contract being unclear about the relationship between the reinsured and the reinsurer. Unfortunately, issues such as these often cause problems between the parties in later years and can lead to costly disputes.

In this seminar, leading experts give a step-by-step guide to the world of reinsurance wordings, making this an ideal programme for new lawyers in the reinsurance industry.

During this intensive training seminar all the important issues which need to be taken into consideration at the contract negotiation and drafting phase will be highlighted. The programme is designed to be highly practical and plenty of time will be set aside for questions and discussion between the audience and the expert panel of speakers.

In addition, a mock mediation session has been added which will further illustrate some of the problematic wordings that have been discussed during the seminar and how they are best dealt with in the event of a dispute.

Practical Interactive Workshop
A unique workshop session has been developed specifically for this programme to focus on the practical interpretation of reinsurance contracts.

Who should attend?

Wordings technicians
Reinsurance technicians
Claims managers
Wordings specialists
In-house lawyers
Lawyers in private practice
Anyone who is involved in the drafting or implementation of reinsurance wordings

By attending this seminar, you will:

MASTER the basic legal principles of reinsurance terms and contracts wordings
GET-TO-GRIPS with the common clauses and legal considerations
GAIN an understanding of the incorporation of clauses
LEARN about the complexities of follow and settlement clauses
HEAR ABOUT the developments in the London Market concerning contract certainty and other related issues
GET UP-TO-DATE with latest developments and current practice in choice of law and dispute clauses
FIND OUT MORE about loss of rights
BECOME familiar with access to records clauses and confidentiality

Programme - Day 1

The impact of contract wordings on reinsurance claims

The need for clear contract wordings
Managing reinsurance disputes
Arbitration clauses
Problems which can arise with respect to claim audits
Contract certainty
Contract wordings and latent claims
Brokers and contract wordings
Support required by the claims department to validate claims

Contract certainty

Status of contract certainty efforts
The Market Reform Contract
Market Process Reforms – ECF/A&S/E-Policies
Developments at Lloyd’s

Incorporation of clauses

The rationale for incorporation of clauses
Does incorporation work?
What are the difficulties with words of incorporation
Impact of recent cases

Practical Workshop Session

A practical interactive workshop focusing on reinsurance contract wordings and their interpretation. Delegates will be divided into small groups to consider various issues in sample reinsurance contract, including:

Interpretation of contracts – core principles
Wording components
Claims process and cash flow
Law and dispute resolution

Follow the fortunes or follow the settlements – principles, presumptions and practicalities

General principles – history and purpose of ‘follow’ clauses
Construction and effect
- Pro-cedent clauses
- Pro-reinsurer clauses
Limitations on duty
- Bad faith
- Ex gratia payments
- Burden of proof
- Claims governed by foreign law
Conflicts with claims cooperation or control clauses
English v US position

Defining the loss/Aggregation clauses

Meaning of event, occurrence and related terms
Functions of aggregation clauses
Key applications of aggregation principles
Application of the relevant text for aggregation of loss
Recent cases on aggregation – lessons learnt

Programme - Day 2

Loss of rights

Conditions, conditions precedent and warranties
Waiver by affirmation and waiver by estoppel
The elements and availability of waiver
Refusal to provide an indemnity – effect on the reinsured’s obligation to co-operate

Access to records clauses and confidentiality

Construction of the Access to Records clauses
Purpose of the Access to Records clause
The right to inspect during disputes
Failure to inspect
Enforceability of the Right to Inspect
Scope of the Right to Inspect
Confidentiality clauses

Choice of law clauses

Rules applicable to choice of law clauses – the new Rome I Regulation
Incorporation of choice of law from insurance to reinsurance
‘Floating’ choice of law clauses
Choice of law in arbitration

Contract wordings and Part VII of the FSMA 2000

Change of legislation resulting from HM Treasury Consultation November 2006
Framework for objections by reinsureds and outwards reinsurers
Loss of rights
Implied statutory restrictions on outwards reinsurance contract wording ‘anti-avoidance’
Ways to adapt contract wording

Claims co-operation clauses

What is a Claims Cooperation Clause (CCC) in the reinsurance context?
Importance of ensuring CCC is a condition precedent
Notification of loss
Relationship of CCC with other terms
Review of recent cases
Lessons to be learnt

Dispute clauses

Court v arbitration
Speed v cost
Expert knowledge
Joining third parties
Enforcement
ADR clauses
What is an Honorable Engagement clause?
Arbitration Act 1996

Mock mediation
A moderated mock mediation of a reinsurance dispute based on a scenario to be provided to delegates.

The expert faculty

David Abbott is a partner in the commercial risk and reinsurance team of Barlow Lyde & Gilbert LLP. David specialises in insurance and reinsurance dispute resolution both in the UK courts and in domestic and international arbitrations. He has acted in a wide variety of disputes relating to both traditional and alternative risks. David’s work also includes a wide range of advisory and transactional work. He is also a member of the firm’s War, Political and Trade Risks group and has acted in a number of Political and trade risk matters. He is also recommended in the Legal 500, 2009 and Chambers & Partners, 2010.

Richard Cook joined Xchanging Claims Services Limited as Chief Adjuster and Head of Reinsurance in April 2006 having held a series of senior claims positions at Lloyd’s Managing Agencies and London Market Companies over the past 26 years. In his current role, he is responsible for over 36,500 open claims files with reserves in excess of £2.6bln encompassing all Marine and Non-Marine Reinsurance Claims. He directly manages a 21 strong team of specialist reinsurance claims adjusters in London and is responsible for quality, technical expertise and service on over 8,500 claims transactions a month and annual claims payments of over £1.4bln.

Helen A. Franzese is Counsel of Riker Danzig London LLP and practices exclusively in insurance law, advising and representing insurance companies in complex coverage litigation and alternative dispute resolution proceedings. She has represented London Market companies, syndicates and US based insurers in asbestos, pollution and health hazard related coverage matters.

Simon Kilgour is a partner at Reynolds Porter Chamberlain where he leads their reinsurance practice and acts for domestic and overseas insurers and reinsurers on complex, high value or non-standard coverage disputes or market issues. His work is mainly international and includes advising on wordings, inspections, inwards and outwards coverage disputes and collections. He is the architect of RPC’s ReWorld reinsurance database, which won the Technology award at the British Insurance Awards in July 2008.

Kevin Lazarus is a solicitor in the legal and compliance team at Lloyd’s advising the corporation. Before joining Lloyd’s Legal in 2006 he was a solicitor in private practice including at Barlow Lyde & Gilbert where he specialised in reinsurance litigation. While at BLG, Kevin contributed to Reinsurance Practice and the Law, and he assisted with the current chapter on Lloyd’s. He is a contributing lecturer at the Centre for Commercial Law Studies at Queen Mary, University of London on the subject of insurance law and regulation.

Francis Mackie is a partner in the London office of Edwards Angell Palmer & Dodge. He has over 30 years’ experience in the (re insurance sector. His practice is well known in the London Market and international arbitration arena, where he has run arbitrations in London, Bermuda, the US and Europe. His dispute practice also includes significant London Commercial Court cases/disputes. Francis covers a wide range of insurance and reinsurance sectors, mainly dealing with dispute, advice and coverage issues, with particular experience in energy, professional indemnity, political risks/contract frustration, commercial property, financial institutions/D&O, pharmaceutical/product liability, contingency risks, binding authorities, marine excess of loss market and MGA’s. Over the years he has been involved in a wide range of coverage and contractual disputes involving these types of insurances and reinsurances.

Ben Ogden is a partner at Ince & Co. He joined the partnership in 2002 and is a member of the firm’s insurance practice specialising in contentious matters. Ben heads up the Alternative Dispute Resolution Group in the firm and regularly mediates claims as an alternative to trial or arbitration. He advises on a wide variety of insurance claims both for and against insurers, and had regularly acted in professional indemnity matters.

Bill Perry was elected as the first Senior Partner of Carter Perry Bailey on the firm’s formation in 2009. He had previously been Senior Partner (and Head of Litigation) of Pickering Kenyon (then the oldest firm of solicitors in England and the only one with a Coat of Arms) before spending 14 years at Charles Russell LLP, the last eight as Head of Litigation and Dispute Resolution. He is currently also (the first non-American in history to be) President-Elect of the International Association of Defense Counsel. Bill is also Vice President of Insuralex, CPB’s international network of specialist (re)insurance lawyers.

Phillippa Rowe is Senior Partner of independent reinsurance consultants Phillippa Ross & Co. Phillippa has over thirty years experience of insurance and reinsurance claims in Lloyd’s and the London Market as well as internationally. She began her reinsurance career with fifteen years with the Kiln Group at Lloyd’s. She currently acts as arbitrator, mediator, expert witness and technical consultant in a wide range of claims, wordings and market practice matters and writes, lectures and provides training courses on similar subjects.

Carol Searle is a partner in the Insurance and Reinsurance Group of Ince & Co in London. She has experience in advising on disputes arising out of political risk, financial institutions liability and reinsurance policies in both Court and arbitration. She has handled numerous claims (investment and trade) emanating from emerging markets under a variety of political risk policies including expropriation, contract frustration and trade credit. She has been involved in reviewing political risk and trade credit policy wordings. Carol has experience in advising on complex reinsurance claims on issues such as aggregation. Her recent cases include Standard Life Assurance Limited v Oak Dedicated Limited and Others, which involves the aggregation of third party claims and brokers negligence.

Stephen Surgeoner is a partner at Clifford Chance in London. He specialises in contentious and noncontentious insurance and reinsurance, Lloyds and professional indemnity. He joined Clifford Chance in 1992 and became Partner in 2002.

Vivien Tyrell is a partner at Reynolds Porter Chamberlain in London. She is an authorised insolvency practitioner and has advised on insurance insolvency since 1987. Vivien has prepared several Schemes of Arrangement of international insurance and reinsurance companies and advises on the insolvency aspects of contentious and potentially contentious matters arising in the insurance industry. Vivien is recognised by the Legal 500, Chambers Directory of the Legal Profession and Euromoney Expert Guides – Insolvency and Restructuring Lawyers as a leader in her field.

Peter Wedge is Legal Counsel at Infrassure (an energy & infrastructure insurer). Prior to this, he worked for SCOR, most recently in New York, as Global Head of Inspections and Claim Solutions, acting as a Director of General Security Insurance Company Limited. Previously, he was Head of Claims at Alea Europe and Legal & Claims Counsel at Swiss Re. He has 24 years experience