Archives: Contract Interpretation

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Arbitration Award Clarification Confirmation

Generally, when an arbitration panel issues a final award the panel is “functus officio“; its powers expired and its duties relieved because it has finished its work and there’s no more to be done.  Sometimes, however, an arbitration panel will retain jurisdiction for a period of time after the final award is issued in case … Continue Reading

Proving a Reinsurance Contractual Relationship Exists

Litigating a reinsurance contract dispute is not much different than litigating any commercial contract dispute. The party seeking recovery under the contract has to prove that the contract exists. Proving the policy can be a big issue with claims asserted under old policies and reinsurance contracts. This certainly has been an issue with asbestos and other … Continue Reading

March 2017 Reinsurance Newsletter

This quarter’s Squire Patton Boggs Reinsurance Newsletter focuses on the certified question sent to the New York Court of Appeals by the Second Circuit on Bellefonte. It also features regulatory updates on the US-EU Covered Agreement as it affects reinsurance and on the new duty to pay insurance and reinsurance claims in the UK. Finally, … Continue Reading

Exculpatory Clauses in Reinsurance Agreements

Exculpatory clauses appear in many contracts. They are often used to protect a contracting party from damages caused by its actions or the actions of others. For example, a hold harmless clause may protect one party from third-party suits caused by the alleged negligence of the other party. Exculpatory clauses, like hold harmless or indemnification clauses, … Continue Reading

What a Difference a Word Makes

Lack of precision in reinsurance contract wording has been known to engender anomalous results. Often a single word or phrase can cause a court or arbitrator to construe an agreement in ways unintended. In reinsurance arbitrations, when the panel majority decides how a contract operates based on its construction of a word or phrase, the … Continue Reading

The Dangers of Selecting an Exclusive Arbitral Forum

Arbitration clauses in commercial contracts often specify an arbitral forum before which any dispute must be arbitrated. Insurance and reinsurance contracts containing arbitration clauses are no different. Specificity about the arbitral forum (or the arbitral rules or the appointing authority in case of an impasse) in an arbitration clause has resulted in much case law over the … Continue Reading

Contractual Privity and Reinsurance

In most jurisdictions a policyholder cannot bring a direct action against a reinsurer because of the lack of contractual privity. Yes, there are some quirky statutes and jurisdictions that allow a direct right of action under certain circumstances, but the general rule is that where there is no contractual relationship between the reinsurer and the … Continue Reading

7th Circuit Affirms Waiver of Removal Because of Reinsurance Agreement Service-of-Suit Clause

In December 2015, an Illinois federal court held that the language of a service-of-suit clause in a reinsurance contract was a voluntary removal waiver and sent a case removed to federal court back to state court. That case went up to the Seventh Circuit Court of Appeals for review. The Seventh Circuit has now affirmed.… Continue Reading

When a Reinsurance Contract Is an Insurance Contract

You know the old saying: if it walks like a duck and quacks like a duck it must be a duck! So when a contract is called a Facultative Reinsurance Agreement is it a reinsurance contract or an insurance contract? Recently a Missouri appellate court addressed this issue to determine an appeal of the denial … Continue Reading

Frontal Assault on Bellefonte at Second Circuit

Those of you who dabble in reinsurance disputes are familiar with Bellefonte Reins. Co. v. Aetna Cas. & Sur. Co., 930 F.2d 910 (2d Cir. 1990) and its progeny. Many trees have been sacrificed explaining and arguing for and against the “rule” set in Bellefonte and its affect on claims expenses and limits in facultative certificates … Continue Reading

Confirming a Reinsurance Arbitration Award After Payment Is Made

The Federal Arbitration Act provides that “[i]f the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made any party to the arbitration may apply to … Continue Reading

Resolving Competing Arbitration Clauses

A typical reinsurance contract has one arbitration clause. But sometimes, the contract is endorsed and a second and different arbitration clause may appear. Which controls? That was the question faced recently in a Hurricane Sandy reinsurance dispute when a facultative certificate of reinsurance had an arbitration clause in its body at Section U, but had … Continue Reading

The Added Value of Contract Wording Specialists

As you can tell from many of my blog posts, and certainly from my IRMI.com Commentaries on Reinsurance, negotiating a clear and unambiguous contract wording is a big part of dispute avoidance. Certainly, a significant number of reinsurance disputes result from less than stellar contract drafting. This is true also in commercial insurance. The failure … Continue Reading

Remedies for Arbitration Clause Impossiblities

Reinsurance disputes, particularly collateral disputes over the technicalities of arbitration, are often caused by the words selected in the drafting of the reinsurance contract. Because there is no “right” arbitration clause perfect for every reinsurance agreement, arbitration clauses differ from company to company and from broker to broker. Every company and every broker has their … Continue Reading

The Resurgence of the Defense of Late Notice in Reinsurance Disputes

One of the first things that a reinsurance claims person looks at when receiving a claim notice for the first time is whether the notice from the ceding insurer complies with the notice requirements of the reinsurance contract. In other words, is the reinsurer hearing about this claim for the first time after judgment has … Continue Reading
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