7 KBW
5 Experts
6 Contributions by 7 KBW Experts
PRACTICE NOTES
Practice Note
This Practice Note offers a concise overview of the function of reinsurance brokers when arranging reinsurance intended to operate ‘back-to-back’ with the base policy market-wide. It explains how the obligations owed by reinsurance brokers diverge from those of brokers placing only direct insurance arrangements. It sets out guidance on potential conflicts of interest arising when arranging back-to-back reinsurance, and highlights risks and typical errors that could prompt claims against brokers operating in a dual role within such placements. This Practice Note further offers practical pointers on how brokers may avoid or reduce negligence claims, and includes links to associated materials for readers elsewhere. The expression ‘direct’ is used within insurance and reinsurance placement contexts to denote cover for the original policyholder, as distinct from reinsurances of that underlying risk in question specifically. The term ‘direct’ should not be mistaken for
Insurance & Reinsurance
PRACTICE NOTES
Business interruption insurance
This form of cover is commonly packaged and sold within standard commercial property policies. Ordinarily, business interruption protection only responds when disruption to, or interference with, operations directly stems from physical damage to insured property at the insured location. Some wordings, however, add ‘non-damage’ extensions that insure loss of income in other scenarios— for example, where entry to, or use of, the business premises is temporarily blocked or materially impeded by circumstances not involving property damage. In March 2020, after the coronavirus (COVID-19) lockdown, numerous firms sought to claim for such losses under their business interruption insurance, yet few received indemnity, largely because of uncertainty over how non-damage extensions should react to a nationwide outbreak of infectious disease. The Financial Conduct Authority (FCA), in consultation with policyholders and insurers, commenced and pursued a test case under the Financial Markets Test Case Scheme (the FCA
Insurance & Reinsurance
PRACTICE NOTES
Practice Note
The coronavirus (COVID-19) pandemic has significantly affected the insurance market and policyholders. The Financial Conduct Authority’s (FCA) widely publicised test case (The Financial Conduct Authority v Arch Insurance) on coronavirus business interruption cover has removed some obstacles to settling direct business interruption claims, yet important questions about interruption losses remain unanswered. A range of other insurance classes impacted by coronavirus are likewise generating substantial losses for insurers. Many such losses have been placed into reinsurance, including exposures arising from overseas jurisdictions. Challenging issues continue to emerge around how these losses respond under reinsurance, which remain to be determined at the reinsurance layer. The resolutions will identify which reinsurers ultimately meet the cost of coronavirus reinsurance claims and how much of the coronavirus insurance burden stays with direct insurers. This Practice Note explores several issues confronting cedants (the reinsured) and
Insurance & Reinsurance
PRACTICE NOTES
This Practice Note offers a concise overview of the functions and duties of insurance brokers, outlining their role in arranging and renewing insurance policies. It also gives practical pointers on how brokers can avoid or reduce negligence claims. More focused materials are signposted. For rules and guidance on insurance distribution regulation, see Practice Notes:
FCA Handbook—introduction for the insurance and reinsurance sector
PRA Rulebook—introduction for the insurance and reinsurance sector
Insurance conduct regulation—COBS and ICOBS
UK insurance distribution regime—essentials
Functions of insurance brokers
The broker’s central task is to secure consensus and clarity between the insured and insurers so that suitable cover is effected (or ‘placed’) in line with the client’s instructions. An essential aspect of the role is to bridge the disparity between the client’s understanding of its own operations and the broker’s appreciation of cover available in the market (see
Insurance & Reinsurance
PRECEDENTS
Claim No. [ insert claim number ].
In the High Court of Justice, within the [ Business and Property Courts ], [ of England and Wales OR at [ insert location ] ], or alternatively [ Specify division ], [ Specify specialist court ], [ Insert location ] District Registry; The County Court at [ insert location ]; [ Business and Property Courts List ]; Before [ The Honourable Mr Justice OR The Honourable Mrs Justice OR His Honour Judge OR Her Honour Judge ] [ insert name ]; [ in public OR in private ]; Dated: [ insert date ]; Between [ insert name ] (Claimant/Applicant) and [ insert name ] (Defendant/Respondent).
[ DRAFT ] ORDER FOR AN ANTI-SUIT INJUNCTION
PENAL NOTICE
This Order [ prevents you, [ insert name of respondent ], from acting OR requires you, [ insert name of respondent ], to act ] in
Dispute Resolution
PRECEDENTS
Filed on behalf of the Claimant
Statement of evidence by [ insert initial and surname of witness ] Sequence: [ insert number of the witness’s statement in relation to the witness, e.g. ‘Second’ ] Exhibits: [ insert initials and number for each exhibit cited, e.g. ‘MXW1’ ] Statement date: [ insert statement date ] [ Translation date: [ insert date ] ] Claim number: [ insert claim number ]...
Dispute Resolution
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