Reinsurance

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The RAA Re Contracts program continued on Wednesday and the calendar was packed with speakers who presented on an array of topics relating to the Reinsurance Contracts.  Gerard Finley of Munich Re America kicked off the day with a presentation on Different Kinds of Reinsurance Contracts and Related Issues.  The theme he emphasized appears to be one that runs throughout the conference, namely that “if it is open to interpretation, it is open to arbitration.” …
Read More RAA Re Contracts In Bermuda – Day 2

According to a recent article in the New York Times, insurance and reinsurance companies from Japan and abroad, as well as hedge funds and other investors in catastrophe bonds, are expected to bear a relatively small portion of the losses stemming from the earthquake and resulting tsunami, which is expected to exceed $100 billion.  By way of comparison, the 1995 earthquake in Kobe, Japan resulted in approximately $100 billion of damages, according to the Insurance Information Institute, but only about $3 billion of that was covered by insurance. …
Read More Japan’s Government Will Likely Bear Most of the Damages Resulting from the Earthquake

The U.S. Court of Appeals for the Seventh Circuit recently issued a unanimous opinion in reversing a decision of the U.S. District Court for the Northern District of Illinois to hold that a party-appointed arbitrator’s involvement in an earlier arbitration between the same parties did not disqualify him or render him incapable of serving in a subsequent arbitration involving related issues. …
Read More Seventh Circuit Reverses Decision that Disqualified Reinsurance Arbitrator Based on Service in Related Arbitration

It is not uncommon for ceding companies and their reinsurers to become embroiled in disputes on the manner in which a claim or settlement payment is allocated, whether a loss falls within the scope of coverage provided by the reinsurance contract, or whether a cedent’s claims-related decisions were reasonable and made in good faith. …
Read More Follow the Fortunes: Decisions and Trends in 2010

The New York State Insurance Department (NYID) recently promulgated a Tenth Amendment to New York Regulations 17, 20 and 20-A (11 NYCRR 125) (the Amendment), effective January 1, 2011, which authorizes the NYID Superintendent (the Superintendent) to reduce the amount of collateral required for domestic insurers to receive full financial statement credit for reinsurance ceded to unauthorized reinsurers satisfying the requirements detailed below. …
Read More New York Amends Credit for Reinsurance Regulation, Relaxing Unauthorized Reinsurer Collateral Requirements

A Massachusetts federal court recently held that a party’s lapse in reporting a multi-million dollar and complex lawsuit deprived an insurer of the right to associate and was prejudicial as a matter of law, precluding coverage. …
Read More Massachusetts Federal Court Finds That Late Notice, Deprivation of the Right to Associate, Precludes Coverage

Polimaster Ltd. and RAE Systems, Inc. were parties to an agreement that required disputes between the parties to be “settled by means of arbitration at the defendant’s si[t]e.” After a dispute arose between the parties, Polimaster commenced arbitration in California (RAE’s principal place of business).  RAE answered the arbitration demand, asserting certain affirmative defenses, and also counterclaimed against Polimaster. …
Read More Ninth Circuit Vacates Arbitration Award Because Arbitrator Failed to Enforce Forum Selection Procedure

In the recent case of Teal Assurance Company Ltd v (1) WR Berkley Insurance (Europe) Ltd (2) Aspen Insurance UK Ltd (2011) EWHC 91 (Comm), the Commercial Court considered the order in which losses eroded liability in a complex professional indemnity tower. …
Read More UK: Commercial Court Considers when Liability is Triggered in a Complex P.I. Tower

President Barack Obama’s recently released Budget of the U.S. Government for the Fiscal Year 2012 (the “Proposed 2012 Budget”) would disallow the deduction U.S. cedents are currently permitted to take for “excess non-taxed” reinsurance premiums paid to their foreign affiliates.  The Proposed 2012 Budget provides no further detail regarding the proposed disallowance, but projects that the disallowance would reduce the U.S. deficit by over $2.6 billion by 2021. …
Read More Obama Proposes Tax on Excess Reinsurance Premiums paid by Cedents to Offshore Affiliates