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Flashcards in 5. Reinsurance Deck (73)
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1

How is reinsurance usually placed

As in insurance market - subscription + towers

2

What is surplus line proportional reinsurance

Cedant retains X line and the reinsurer the match that line

3

When is commission paid by reinsurer to reinsured

Quota share proportional - as acting like broker

4

What is insured called in retrocession C

Retrocedant

5

What market practice argument can be made for claims control clause

If not labelled to be CP, it is market practice for it to be, so if both parties are sophisticated insurers, both would have known = CP

6

Ratio from Wasa International

Couldn't give PP different definition under English law - parties didn't intend for policy to respond regardless of when damage occurred or period to which losses related

7

Why is facultative reinsurance rarely used

Administratively time-consuming and no certainty cover will be available

8

Two cases on incorporation of underlying terms of original policy

Butcher and Was a International

9

What case showed that labelling of clauses is not determinative

Eagle Star

10

What kind of payments does FtS clause usually exclude

Ex gratia payment

11

Two kinds of proportional reinsurance

Quota share and surplus

12

What does reinsurance help to do

Spread loss and utilise financial resources effectively

13

What is non-proportional reinsurance

Cedant decides how much of risk to cede and retain (NOT SHARED)

14

What was the outcome in ICA v SCOR

Only the first part of the clause was a CP, and had only breached the latter part, so still liable

15

Example of collateral terms not incorporated into reinsurance C

Arbitration of law/J clauses

16

What are the 3 things to comply w/ before reinsurer bound by settlement of cedant

If within terms of RI, if within terms of underlying C, and if settled in honest and business-like manner

17

Facts of Wasa International

'Policy period' had different meaning under Pennsylvanian (original C) and English (reinsurance C) law - former, only need some damage in PP to recover 100% remediation, but latter only liable for damage in PP

18

Two general types of reinsurance - how can it be split

Proportional or non-proportional

19

What is the point of a claims cooperation clause

Keep reinsurer informed - prompt notification + settlement dependent on reinsurer approval

20

What is XL reinsurance

Reinsurer indemnifies cedant for losses in excess of X figure for a single loss

21

Why are ex gratia payments usually excluded from FtS

No legal liability, so not business-like manner and not within terms of RI

22

Case on claims control takes precedence over FtS

Eagle Star

23

What is facultative reinsurance for

Specific risk underwritten, as a one-off

24

Ratio from Butcher

Intention for reinsurance to indemnify cedant for valid insurance liability, so same outcome should result for both parties

25

What is insurer called in retrocession C

Retrocessionaire

26

If FtS incorporates original terms of policy as well , where do you start

Consider Hill to see if settlement to be followed, and then see if any terms (not) incorporated and can be relied on to avoid liability (Butcher and Wasa)

27

What is clash cover

Protects cedant from paying out on multiple claims from same loss

28

What is quota share

% of policy ceded

29

What was the outcome in Eagle Star

Clause was claims control and CP to liability, and CP took precedence over FtS clause

30

What case gives the test for if reinsurer bound by settlement of cedant under FtS clause

Hill v Mercantile