LPC Law Notes Insurance Law Notes
A collection of the best LPC Insurance Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through twenty-nine LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor".
In short these are what we believe to be the strongest set of Insurance Law notes available in the UK this year. This collection of notes is fully updat...
The following is a more accessible plain text extract of the PDF sample above, taken from our Insurance Law Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Reinsurance
‘Reinsurance’: The first reinsurance of the reinsured’s interest in the original risk (primary cover). Reinsurance contracts are contracts of indemnity. You are reinsuring the reinsured’s interest in the original SM of the insurance against certain risks stipulated in the reinsurance contract. Again the contract is one of the utmost good faith.
‘Retrocession’: A reinsurance of a reinsurance contract. Applies when a reinsurer decides to reinsure their own liabilities arising out of their reinsurance contract.
Who is Who?
‘Reinsured’ = Primary / original insurer.
‘Reinsurer’ = Insurer offering the reinsurance.
‘Cedant’ = Reinsured who is ceding the risk to the reinsurer under the reinsurance deal.
‘Retrocessionaire’ = Someone who reinsures the reinsurer under a retrocession deal.
‘Retrocedent’ = Reinsurer who is ceding part of the risk to the retrocessionaire.
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Distinctions and Types of Reinsurance
a) Facultative Reinsurance = For reinsurance of a single open cover. Embraces open cover contracts under which reinsurers have an obligation to accept declared risks and have no residual discretion. Open cover is fac/oblig.
E.g. An UW comes along with a placed insurance risk and asks reinsurer to cover it; or broker comes with a slip before placing risk and asks reinsurers to reinsure original contract if he can get placed in market UWs undertaking the reinsurance know what they are reinsuring and make decision whether to accept the risk (fac / fac).
b) Treaty Reinsurance = Where an UW / reinsurer reinsures a huge category of unknown risks which had been underwritten by the original insurer. Unknown, single or multiple underlying risks may subsequently attach to the treaty without further placement or individual negotiation. The reinsurer has no opportunity of rejecting or amending them. Used for reinsurance protections in respect of UWs’ entire underwriting account for a particular year or for a particular part of that account defined by risk category. Can be obtained in advance of risks being underwritten. As long as you insure within the guidelines, the reinsure must pay out.
c) Vertical Risk Sharing = Reinsurance is placed against a certain proportion of the entire loss; i.e. take a percentage of the whole loss at a certain level. E.g. Insure 20% above 100,000.
d) Horizontal Risk Sharing = Reinsurance is placed against those losses in excess of a certain minimum up to a certain maximum level. I.e. Limit your liability by insuring a particular layer of the cake. E.g. ‘Excess at 100,000 any one loss’. First 100,000 is retained by the insured. The next 100,000 layer of the loss is given to one reinsurer.
e) Proportional Reinsurance = Like vertical risk sharing. The reinsurer takes a specified percentage / proportion / share of the risk; i.e. 30%. Take slices of the original risk. Either reinsuring a specified percentage of the risk being underwritten by way of quota share agreements or a proportion of the indemnity by way of surplus arrangement (where share varies from risk to risk).
Vesta; Presumption reinsurance cover is back to back (terms of reinsurance mirror the original cover).
f) Non-Proportional Reinsurance = Like horizontal risk sharing. Taking a layer of financial exposure of the original insurer – passes on a certain part of the insured loss to the reinsurer. Here the reinsured does not cede the risk to the reinsurers but reinsures their financial exposure to the losses arising under the original policy.
Pinetop v. Panatlantic; ‘$75,000 excess of $25,000 each and every loss on an ultimate net loss basis’.
No presumption reinsurance cover back to back as original as UW who is reinsuring on a non-proportional basis is not rating the original risk; he is rating potential exposure.
Reinsured not subject to any implied duty of reasonable care to the reinsurer as the UWs at the reinsurance and primary level...
Buy the full version of these notes or essay plans and more in our Insurance Law Notes.
A collection of the best LPC Insurance Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through twenty-nine LPC samples from outstanding students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor".
In short these are what we believe to be the strongest set of Insurance Law notes available in the UK this year. This collection of notes is fully updat...
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