A step-by-step In-house introduction to the world of reinsurance wordings for executives and lawyers who are new to the industry or would like to refresh their knowledge and skills

Introduction

Precision at the drafting stage on contracts is paramount to avoiding the frequent and small nuances that can land reinsurance companies in trouble. Ensuring you have a thorough understanding of the common clauses and legal considerations is essential to drafting effective wordings that will protect your organization and mitigate against substantial legal risk.

This course includes all the important issues, which need to be taken into consideration at the contract negotiation and drafting phase. The expert faculty will take participants through the wording of the contract clauses, which are most problematic, drawing on their own considerable experience to highlight the pitfalls and challenges that can be avoided using clear and thorough contracts. They will use recent cases and best practice as reference.

Why you should attend

By attending this training, you will develop your knowledge and drafting skills in the key areas of reinsurance contract wordings. Topics will include:

• Nature of a reinsurance contract
• Incorporation clauses
• Follow the settlements
• Claim clauses
• Choice of law clauses
• Defining the loss/aggregation clauses
• Dispute clauses including the Bermuda Form Arbitration Clause
• Collateral and early termination clauses

Anyone who is new to the industry or would like to refresh their knowledge of the key legal considerations when drafting useful and effective reinsurance contracts, including:

• Wording 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

Sample Programme

Introduction to the nature of reinsurance contracts

• Legal considerations
• Common clauses
• Common problems
• Principles of interpretation

Understanding the incorporation of clauses

• The law of the underlying insurance contract
• Ancillary terms
• The effect of words of incorporation
• Recent cases

Follow clauses and settlements – avoiding disputes

• Tension between ‘utmost good faith’ and ‘follow the fortunes’
• Follow the settlements
• The position without a follow clause
• The need to prove underlying liability in fact and law
• The emasculated follow/clause
• The development of the follow clauses – does it do what it says?

Claims clauses

• Types of clause
• Consequences of breach
• Remedies

Defining the loss/aggregation clauses

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

Choice of law clauses

• Rules applicable to choose of law clauses – the Rome Convention
• Incorporation of choice of law from insurance to reinsurance
• ‘Floating’ choice of law clauses
• Choice of law in arbitration

Dispute clauses including the Bermuda Form Arbitration Clause

• What to do: arbitrate or to litigate
• Where to do it? Choice of forum/legal seat
• Holding the ring between competing interests

The hybrid clause – Bermuda Form

• Honourable engagement clauses. Do they work?
• Mediation/conciliation
• Mini trial
• Early neutral evaluation

Collateral and early termination clauses

• Collateralizing of risk
• Recent significant cases