In Aegis Security Insurance Co. v. Harco National Insurance Company, Case No. 06-0606 (USDC M.D. Pa. June 22, 2006), there was a dispute as to whether one party to two reinsurance agreements could offset an amount under one treaty against a liability owed under the other treaty. The reinsurance agreements contained an offset provision. The District Court compelled arbitration, holding that the dispute involved the interpretation of the offset provision, bringing the dispute within the arbitration provision, which required the arbitration of “any dispute arising out of the interpretation, performance or breach of this Agreement.”
Operational trends in the reinsurance industry
Brief article from the Insurance Journal on operational trends in the reinsurance industry.
RAA program on reinsurance claims
View the program brochure for the RAA’s program on reinsurance claims management, September 28-29 in New York City.
FASB invites comments on possible change in risk accounting
The Financial Accounting Standard Board has issued an invitation to comment on a proposal to require policyholders to treat a portion of many types of policies as deposits, recording premiums for risk transfers as expenses and insurance recoveries as gains in income. This proposal was prompted, at least in part, due to perceptions that companies have used finite reinsurance arrangements with little risk transfer to “improve” their financial statements.
UK Court finds lack of authority for reinsurance agreement
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).