Reinsurance Focus

The UK Commercial Court has held that a reinsurer is not bound by a contract signed by an agent, supposedly on its behalf, due to the lack of authority to do so, rejecting contentions that the agent had ostensible authority to do so, or that the reinsurer had ratified the contract. ING Re (UK) Limited v. R & V Versicherung AG, [2006] EWHC 1544 (Commercial Court June 29, 2006).

A UK judge has ruled that he has jurisdiction over non-UK insurance companies to administrer and complete the runoff of a Willis Group-managed insurance/reinsurance pool under the UK's scheme of arrangement process. In re Sovereign Marine, [2006] EWHC 1335 (High Court Chancery Division June 9, 2006).

In North Star Shipping Ltd v Sphere Drake Insurance Plc, [2006] EWCA Civ 378 (April 7, 2006), the UK Court of Appeals stated that when a party seeks to avoid insurance on the basis of the non-disclosure of a “material circumstance,” a material circumstance “is one that would have an effect on the mind of a prudent insurer in estimating the risk and it is not necessary that it should have a decisive effect on his acceptance of the risk or the amount of premium to be paid.” Id., paragraph 18.

In HIH v. JLT Risk Solutions Ltd., [2006] EWHC 485 (Comm. Mar. 15, 2006) the High Court discussed circumstances under which a broker owes an insured a duty to advise it of facts material to the risk which occur after the placement of the insurance.

In HIH v. JLT Risk Solutions Ltd., [2006] EWHC 485 (Comm. Mar. 15, 2006) the High Court discussed circumstances under which a broker owes an insured a duty to advise it of facts material to the risk which occur after the placement of the insurance.

In BP PLC v. AON Limited, [2006] EWHC 424 (Comm. Mar. 12, 2006), the UK High Court of Justice discussed the circumstances under which a sub-broker owes a duty of care to the insured in the declaration of projects to effect insurance under an open cover arrangement.

The UK Court of Appeal has held that a Llloyd's underwriter who returned to their insured's broker all of the documents shown to them in the placing of reinsurance and making claims have a right to view those documents when needed, despite the lack of contractual privity between them. Goshawk Dedicated Ltd. v. Tsyler & Co., [2006] EWCA Civ 54 (Feb. 7, 2006).

The UK Court of Appeal has held that a Llloyd's underwriter who returned to their insured's broker all of the documents shown to them in the placing of reinsurance and making claims have a right to view those documents when needed, despite the lack of contractual privity between them. Goshawk Dedicated Ltd. v. Tsyler & Co., [2006] EWCA Civ 54 (Feb. 7, 2006).

The London Personal Accident Reinsurance market experienced underwriting difficulties and spirals in the latter half of the 1990s. In an extensive opinion, a UK Commercial Court judge found that problems in this market were caused largely by undisclosed gross loss making underwriting, in which the reinsurance brokers had a prominent role. Sphere Drake Insurance Limited v. Euro International Underwriting Limited, Stirling Cooke Brown Reinsurance Brokers Limited, et al., 2003 EWHC 1636 (High Court of Justice, Queens Bench Division Commercial Court July 8, 2003).

Appeal of decision with respect to attempted avoidance of reinsurance, with an extensive discussion of the duties of disclosure and the underwriting process. Court of Appeals held that a reinsured under an excess of loss reinsurance agreement did not owe its reinsurers an implied duty of care to underwrite ceded risks in a prudent manner. Available at Bonner & Ors v. Cox & Ors, 2005 EWCA Civ 1512 (Court of Appeal Civil Division December 8, 2005).