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.
Stay of confirmation of arbitration award due to insolvency denied
In Century Indemnity Company v. Paladin Reinsurance Corp., Civil Action No. 05-3755, in the United States District Court for the Eastern District of Pennsylvania, the Court denied a motion to stay the confirmation of an arbitration award on equitable or prudential grounds, due to the insolvency of the party against which the award had been entered. The Court rejected the arguments that confirmation would provide the holder of the award an unfair advantage over other creditors, or that confirmation would interfere with ongoing regulatory proceedings before the New York Insurance Department.
Finite Reinsurance Case Development
The Court hearing a criminal case involving finite reinsurance transactions involving American Internaitonal Group and General Reinsurance has granted a motion to transfer the case from the Eastern District of Virginia to the District of Connecticut. United States v. Ferguson, et al., Criminal Action No. 1:06-33, in the Untied States District Court for the Eastern District of Virginia (April 10, 2006).
The future of the reinsurance and international financial markets
Executive summary of a report issued by the Group of Thirty on issues facing the reinsurance and international financial markets. This report covers issues such as systemic risks, securitizations, transparency of the market and the regulatory environment. The Group of Thirty is composed of senior officers of insurance companies, banks, international economic associations, Central Banks, academics and others. The full copy of the Report is available for purchase through the Web site.
Aribtrators to decide whether to consolidate arbitration proceedings
In Employers Insurance Company of Wausau v. Century Indemnity Company, 2006 WL 851643 (7th Cir. April 4, 2006), the United States Court of Appeals for the Seventh Circuit held that whether an arbitration agreement contained in a reinsurance agreement prohibited consolidated arbitration with other reinsurers was a prodecural issue to be decided by arbitrators, rather than an in issue of arbitrability for courts to decide.