Reed Smith LLP
23 Experts
11 Contributions by Reed Smith LLP Experts
PRACTICE NOTES
Allocation
In the context of insurance and reinsurance, ‘allocation’ is the process of identifying which policy covers a loss, or a share of a loss. In many claims this point never surfaces. If a driver wrecks their car, the motor insurance policy in force on the date of the accident will respond. Yet, in the smaller number of cases where it does arise, the consequences can be substantial for a (re)insurer's inwards liability and the availability of its outwards reinsurance.
Consider a business that employs a worker for 40 years. During that period the worker is exposed to asbestos and, after retirement, develops mesothelioma and dies. The estate sues the former employer. The company had workers’ compensation/employers’ liability insurance throughout the employee’s service, but which policy, if any, should respond to the claim?
Or take an insurer that covers a power station which later
Insurance & Reinsurance
PRACTICE NOTES
Practice Note
This Practice Note assists with identifying the applicable law for contracts concluded on or after 1 January 2021. For agreements entered into before that date, the UK courts apply a different applicable law framework, which varies according to when the contract was made. For detailed guidance, see the following resources:
Practice Note: Applicable law—a guide for dispute resolution practitioners
Practice Note: Assimilated law
In this Practice Note, UK Rome I refers to Regulation (EC) 593/2008. That regulation governs the choice of law where the contract was entered into on or after 1 January 2021. Previously called Retained Rome I, from 1 January 2024 it has been retitled Assimilated Rome I—the change is in name only; the regulatory provisions are unchanged. Authorities may use either designation, and therefore, for consistency, this Practice Note adopts the term UK Rome I. This Practice Note
Dispute Resolution
PRACTICE NOTES
E&W Brussels I (recast)—dealing with insurance matters [Archived]
ARCHIVED : This Practice Note is archived and is not being maintained. It assists in identifying which EU Member state’s courts hold jurisdiction to determine an insurance claim. In particular, it examines the amendments in Regulation (EU) 1215/2012, Brussels I (recast), insofar as they concern insurance. Those provisions are found in Chapter II, Section 3, Articles 10–15 of the Regulation. The Note reviews the basic principle that a defendant is to be sued in the state of their domicile, together with departures from that principle when the insured—treated as the weaker party—is involved. It also surveys the position where the parties are on an equal footing. Further safeguards are discussed where there could otherwise be tacit prorogation of jurisdiction, as well as the effect of an agreed jurisdiction clause in an insurance dispute. The Practice Note
Insurance & Reinsurance
PRACTICE NOTES
This Practice Note discusses
the meaning of capital call facilities, 'NAV' or asset-backed facilities, and hybrid facilities
the commercial applications of capital call facilities
the due diligence that lenders will undertake
the standard security package typically required by lenders
the principal terms of capital call facilities
'Capital call facilities' and other types of fund finance
A capital call facility, also known as a subscription line facility, is financing extended by a lender to a fund and is ordinarily collateralised by investors’ undrawn commitments. Accordingly, funds tend to obtain these lines early in their life cycle, when unfunded commitments are at their highest yet the fund holds few or no investments that can be charged in favour of lenders. Nevertheless, particularly where recallable capital commitments persist (see below), capital call facilities can remain beneficial well into the fund’s term.
By
Banking & Finance
PRACTICE NOTES
The Financial Services Enforcement Database
The Financial Services Enforcement Database holds detailed information on all substantive FCA and PRA Final Notices and, where available, Decision Notices issued from 2014 onwards. It can be queried and refined across multiple fields.
Rule or legislation breached
Keyword and sector
Date
Financial penalty and analysis of penalty components
Outcomes, including redress and prohibition orders
Other actions, such as referrals to the Upper Tribunal
In the UK, oversight of financial services is carried out by two distinct regulators, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), each with enforcement powers. The FCA operates a judgement-based as well as risk-based model, evaluating a firm’s position in the wider market to place investor interests at the heart of business models, while also delivering an appropriate level of consumer protection. The FCA’s primary objective is that UK financial markets function effectively. The PRA’s aim is to secure the
Financial Services
PRACTICE NOTES
THIS PRACTICE NOTE APPLIES TO TRUST-BASED DEFINED CONTRIBUTION (DC) OCCUPATIONAL PENSION SCHEMES
Statutory right to cash equivalent
In the same way as defined benefit (DB) occupational pension schemes, members of defined contribution (DC) occupational pension schemes have a legal entitlement to transfer the cash equivalent of their benefits to another pension arrangement. This entitlement is primarily set out in sections 93–101 of the Pension Schemes Act 1993 (PSA 1993). The Occupational Pension Schemes (Transfer Values) Regulations 1996, SI 1996/1847 (the Transfer Regulations) provide further detail, including the rules for working out a member’s cash equivalent. Together, these instruments govern the transfer process and calculation mechanics in DC schemes.
Overriding nature of statutory right to transfer
This entitlement is an overriding statutory right (subject to the statutory conditions below). It expressly prevails over any provision in a scheme’s trust deed and rules where those provisions conflict with that right. Some DC
Pensions
PRACTICE NOTES
STOP PRESS:
The Loan Market Association (LMA) has issued refreshed editions of the standard terms and conditions for Par and Distressed Trade Transactions, the full and complete sets of Funded Participation and Risk Participation Agreements, and the Secondary Debt Trading Documentation User Guide; all of which take effect from 17 March 2026. The changes include the deletion of LIBOR references, updates to IBOR rate definitions and the Target2 definition, and revised ERISA representations that incorporate further exemptions from the prohibited transaction rules under ERISA and the US Internal Revenue Code. The revised documentation is accessible to LMA members only via the LMA’s Documentation Hub.
Is loan trading on the secondary market a regulated activity? The UK position
The use of information within the UK loan secondary debt market remains somewhat unclear. The UK regulatory framework oversees firms that deliver services to clients connected to
Banking & Finance
PRACTICE NOTES
This Practice Note
Use this Practice Note when identifying the governing law for contracts concluded between 17 December 2009 and 31 December 2020. Where agreements were made outside those dates, the UK courts apply a different governing law framework; for guidance, see: Applicable law regimes for insurance contractual disputes below. The Note examines the insurance contract rules in Regulation (EC) 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I). It sets out definitions and explains the distinct regimes for large risks and non‑large risks, covering party choice of law, absence of choice, escape routes, and EU Member State derogations. It also outlines obligations concerning insurance cover and how to ascertain the location of the risk. Provisions relevant to reinsurance arrangements are touched on briefly. Finally, it considers whether
Dispute Resolution
PRACTICE NOTES
This Practice Note offers guidance on subrogation in the insurance context. It sets out the legal basis, purpose and practical operation of subrogation, and indicates how to tell rights of subrogation apart from other mechanisms such as assignment or contribution. It also considers common situations, including subrogation against co-insureds, the use of express subrogation clauses and waivers of subrogation. In addition, it covers how recoveries are allocated and the insured’s duty to co-operate with insurers.
What is the right of subrogation?
In insurance and reinsurance, the right of subrogation allows an insurer or reinsurer, once it has indemnified the (re)insured, to step into that party’s position and bring proceedings in the (re)insured’s name. For this Practice Note, ‘insurer’ should be read as ‘(re)insurer’ and ‘insured’ as ‘(re)insured’. The insurer may then exercise any of the insured’s rights or remedies against third parties arising from the
Insurance & Reinsurance
PRACTICE NOTES
Audiovisual expenditure credit (AVEC) scheme
In the UK, the Corporation Tax Act 2009 (CTA 2009) makes expenditure credits available for British films and television programmes. The audiovisual expenditure credit (AVEC) replaced the tax relief introduced by the Finance Act 2014 and enables tax credits to be claimed where a film or TV production satisfies the relevant eligibility conditions. Film tax relief first appeared in 2007 under the Finance Act 2006 to stimulate investment in UK productions. Since launch, 5,230 films have lodged claims, with £5,905m paid to qualifying production companies. The relief was broadened in 2013 to cover television programmes. Since then, 1,375 programmes have made claims, and £3,967m has been paid out. For further detail, see Creative Industries Statistics August 2024. Historically, several film-related schemes have come under scrutiny for seeking to exploit legislative loopholes via film partnership structures. This has included tax
TMT
PRACTICE NOTES
This Practice Note explores waivers in the context of insurance underwriting and claims-handling. Although it chiefly focuses on the law of waiver for a ‘non-consumer insurance contract’ (as defined in section 1 of the Insurance Act 2015 (IA 2015)), it also distils principles from case law concerning a ‘consumer insurance contract’ (as defined in section 1 of the Consumer Insurance (Disclosure and Representations) Act 2012 (CI(DR)A 2012))...
Waiver during the underwriting process
The duty of fair presentation
IA 2015 introduced a duty on the insured to give a fair presentation of the risk to the insurer in relation to a ‘non-consumer insurance contract’. In short, this means the insured must either:
disclose to the insurer ‘every material circumstance which the insured knows or ought to know’; or
‘failing that, disclosure which gives the insurer sufficient information to put a prudent insurer on notice that it needs to
Insurance & Reinsurance
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