Legal News

The Court of Appeal has dismissed the insurer's argument that the first transmission of coronavirus in China was the source of losses suffered by the diner chain. The Court of Appeal unanimously rejected the German insurance giant’s stance that the virus’s first transmission in Wuhan was the originating cause of losses sustained by Various Eateries Ltd, and that the diner chain’s claim ought therefore to have been capped. Allianz’s appeal targeted a 2022 High Court judgment which held that successive government‑mandated lockdowns caused the restaurant group’s losses; the group owns the Strada, Coppa Club and Tavolino brands. The consequence of that ruling was that a £2.5m limit on payouts applied to each lockdown on a separate basis. In the judgment handed down on 16 January 2024, Justice Stephen Males concluded there were too many links in the causal chain between the outbreak and the...

A Court of Appeal bench unanimously dismissed Axis Specialty Europe SE’s attempt to overturn a decision requiring it to indemnify Discovery Land Co LLC under Jirehouse Partners LLP’s professional indemnity policy, after a firm partner misapplied funds set aside for the purchase and redevelopment of Taymouth Castle in the Scottish Highlands. Axis contended it could deny indemnity, firmly asserting that Jirehouse partner Vieoence Prentice knew fellow partner Stephen Jones was misusing the money at issue. The three-judge panel ultimately held that Prentice had not sanctioned the misconduct at all. In April 2023, High Court Judge Robin Knowles found against Axis, plainly stating he could not conclude Prentice appreciated what Jones was doing. Judge Knowles determined that had Prentice discovered Jones’s wrongdoing earlier, he would have quit before March 2019, when the scheme emerged in full and became...

The Court of Appeal decided that aerospace trader Mitsui Bussan Aerospace Co Ltd’s contractual claim against French jet maker Dassault Aviation SA could be passed to Mitsui Sumitomo Insurance Co Ltd, restoring an arbitration award made in 2021. Dassault maintained that its agreement to supply maritime surveillance aircraft to Mitsui Bussan Aerospace ( MBA) included a term barring MBA from assigning its rights to any third party without Dassault’s approval, the judgment simply records. Justice Geoffrey Vos found that when the contract was automatically moved to Mitsui Sumitomo under Japanese law, the non‑assignment clause was not breached (despite the absence of Dassault’s consent) because MBA was not ‘voluntarily causing or agreeing’ to the transfer. He wrote that the proper issue was whether the transfer was effected by MBA, rather than whether it occurred as a result of particular steps MBA had taken. MBA (which...

' Dear CEO' letter outlines PRA priorities for supervising insurers On 11 January 2024, the PRA told chief executives of insurers overseen by the authority that economic, regulatory and technological shifts over the past year have introduced fresh risks, and firms must show how they are managing them. In their ' Dear CEO' letter, Charlotte Gerken, PRA’s executive director for insurance supervision, and Shoib Khan, insurance supervision director, set out the supervisor’s priorities for overseeing insurers during the year ahead. According to the letter, these priorities are framed by a difficult backdrop that presents the insurance market with both threats and openings for the insurance sector overall......

On 11 January 2024, the firm reported advising on an insurance framework that channels designated funds into accounts at two Ukrainian state lenders, Ukrgasbank and Ukreximbank, allowing them to issue irrevocable letters of credit. Each letter will be confirmed and guaranteed by Germany’s DZ Bank AG. The structure provides risk cover to shipowners and charterers moving cargo across the Black Sea, the sea between Europe and Asia bordered by states such as Russia and Ukraine. It also streamlines repayment to underwriters should claim settlements be required, supporting efficient handling of payments. It also enables underwriter reimbursement when claims require payment......

Insurance & Reinsurance weekly highlights—11 January 2024 In this issue: Ukraine conflict Cases and decisions Types of insurance Market practice Regulation New and updated content Case trackers Key dates Daily and weekly news alerts Lex Talk®Insurance: a Lexis®Nexis community Ukraine conflict Aviation claims The conflict in Ukraine has profoundly disrupted the aviation insurance sector. Attention has centred on claims under aviation policies, as lessors attempt to recoup losses for aircraft that remain in Russia (typically still controlled and operated by Russian carriers). Consequently, numerous proceedings have been commenced before the courts in England, the US, and Ireland. For more detail, see Practice Note: Ukraine conflict—aviation insurance claims, which addresses the principal areas of contention under these policies. It also highlights further issues for claims under primary policies and...

WRBC Corp Member Ltd In a High Court filing dated 22 December 2023, which has recently been made public, WRBC Corp Member Ltd alleges that 13 Lloyd’s underwriters or insurance companies have refused to pay out monies it claims to be owed. According to WRBC, AXA XL Syndicate Ltd is the lead reinsurer for defendants. Other defendants named include Brit UW Ltd and White Bear Corp Capital Ltd. The claim states the defendants have wrongfully refused or failed to pay amounts due to the claimant under the reinsurance treaties. The filing adds that WRBC issued a number of insurance policies protecting businesses against the risk of event cancellations and related matters, according to the claim......

Compre Group Holdings Ltd withheld the sellers’ identities, noting only that the companies are its clients and international insurance groups. The legacy insurance group placed reinsurance on the two portfolios through its own reinsurance subsidiary, Pallas Reinsurance Co Ltd. The relevant regulators in Europe and Bermuda, where Compre is headquartered, cleared the transaction. The company also chose not to reveal counsel details for the deal. Simon Hawkins, Compre’s European chief executive, said the business collaborated closely with......

Although storms across North America and Europe proved more damaging than ever, there were no mega-disasters to push last year’s losses higher, according to Munich Re Group. The company noted that insured losses overall slipped beneath the five-year norm of US$105bn. The German reinsurer compiles information from government bodies, scientific institutions, trade associations, the insurance sector, the media, and other publicly accessible sources to assess the bill for natural catastrophes in aggregate and for insurers. ' The year 2023 was, once more, marked by exceptionally high insured losses from natural disasters, despite there being no extreme individual events,' said Thomas Blunck, a member of the board at Munich Re Group......

The Big Four auditor announced on 3 January 2024 that 53% of insurance leaders and 37% of asset and wealth management chiefs thought the UK would fail to keep its status. However, 84% of banking bosses were confident Britain could hold its market position, based on a survey of 160 financial services executives carried out between November and December 2023. KPMG added that the insurance figure reflected a small sample size. Leaders argued that easing regulatory burdens, while addressing inflation and interest rates, would support Britain in preserving its standing. They also suggested that reforming the tax regime would reinforce London’s position. The study captured views across banking, insurance, and asset and wealth management sectors......

Willmott Dixon Construction Ltd has struck a confidential deal with eight insurers to resolve its High Court action against them, as set out in an order by Judge Sara Cockerill dated 18 December 2023 and only recently made public. The developer had sought full indemnity, yet did not reveal the amount claimed to meet its settlement with the supermarket chain. Among the insurers pursued were Chubb European Group SE, CNA Insurance Co Ltd and Allied World Assurance Co ( Europe) Ltd. The remaining defendants are Axis Specialty Europe SE, AIG UK Ltd, AXA XL Underwriting Agencies Ltd, Asta Managing Agency Ltd and Premia Managing Agency in the case at issue......

On 29 December 2023, the broker stated that windstorm Pia, also called Zoltan, was likely to have produced the second-highest amount of wind-related damage in Europe in 2023. The costliest weather disruption of last year was October’s Storm Ciaran, which analysts at the time projected could lead to €1.5bn in insured losses—the sum insurers are required to pay out for damage. Storm Pia reached Western Europe on 21 December 2023, unleashing widespread travel chaos right across the region......

Professional indemnity claims Allianz Global Corporate & Specialty SE reported that, across 93,000 professional indemnity claims handled worldwide between 2002 and 2022, a ‘large loss event’ referred to any claim above €1m. Of the 477 large losses recorded, 30% related to solicitors and lawyers. Construction professionals — including surveyors, architects, and conveyancing solicitors — accounted for 27%. Insurance brokers and agents represented a further 22%. Released on 11 July 2023, these results form part of Allianz’s review into patterns influencing professional indemnity insurance claims activity. Notable drivers of risk included cybercrime, data loss, and shifts in legislation associated with building safety. Cybercrime Data loss Evolving rules tied to building safety Professional indemnity insurance helps protect practitioners and their firms against allegations of financial loss......

On 28 June 2023, the FCA stated that the insurer must scrutinise records in full spanning from September 2017 through to August 2022. Direct Line was instructed to offer claimants ‘appropriate redress’ where it identifies policyholders who have been given unfairly low settlements. The regulator did not reveal what triggered its intervention at that time. In December 2022, the FCA said it was aware that insurers were undervaluing motor insurance payouts for customers whose vehicles had been written off. A Direct Line spokesperson said the firm had already calculated the financial impact of the redress and had adjusted its......

QIC Europe Ltd QIC Europe Ltd, a Malta-based insurer, rejects claims it breached its policy with two subsidiaries of hospitality group C G Restaurants ( Holdings) Ltd by declining to indemnify losses tied to three government-imposed lockdowns from September 2020 to December 2021. According to its defence at the High Court, filed on 24 March 2023 and now made public, cocktail bar operator DC Bars Ltd and Tuttons Brasserie Ltd, which operates a restaurant in Covent Garden, central London, benefit from cover only for the first lockdown, which began in March 2020. The insurer maintains no liability for the later closures. The hospitality companies......

High Court defence In its High Court defence, the insurer maintains it does not owe Aer Cap Ireland Ltd for the value of 141 aircraft and 29 engines leased to Russian airlines and now marooned in the country. Swiss Re International SE has joined peers AIG Europe SA and Lloyd’s Insurance Co. SA in asserting it bears no liability because Aer Cap could, in time, recover the aircraft and parts from the country. They argue their policies respond only to a total physical loss of the planes. Possible retrieval would, they say, fall outside that scope. Another insurer, Fidelis Insurance Ireland DAC, entered the proceedings as a defendant in January 2023. Swiss Re also used its defence, filed on 13 March 2023 and since made public, to set out its position clearly and mark a firm boundary: it would be liable solely to the extent of its...

What is a captive insurance company? A captive insurer is a fully owned subsidiary set up to manage and mitigate the risks of its parent and related entities. When the parent cannot secure appropriate cover from the traditional market for certain risks Premiums paid into the captive can generate savings for the parent or related parties Ability to place cover with reinsurers that the parent cannot access directly Addresses specific risks not available in the wider insurance market Funds the deductibles on policies purchased by the parent Investment income available to offset losses Improved control over claims Cover tailored to your needs Reduced reliance on commercial insurance Stabilisation of pricing Key takeaways A captive insurer is a wholly owned subsidiary that mitigates risk for its parent and related entities Benefits can include lower...

Under section 47(6) of The Building Act 1984, approved inspectors were previously obliged to hold specified minimum insurance, with mandatory run-off cover arranged under a scheme approved by the secretary of state; they are now permitted instead to obtain revised levels of professional indemnity insurance on the open market. The reform was introduced to prevent an insurance crisis after the Grenfell Tower tragedy, which had caused many approved inspectors to cease trading and led insurers to stop writing the risk. Since private certification of buildings was introduced in England and Wales in 1984, approved inspectors have consistently struggled to secure adequate insurance. As private building control inspectors lack the financial strength of local authorities, which are permanent statutory bodies, a fundamental feature of the private certification regime was to require private inspectors to carry sufficient cover, ensuring house purchasers had...

What is the likely outcome going to be once the government e-scooter trials end? Following the Queen’s Speech, we anticipated e-scooters would appear in the Transport Bill, and Grant Shapps suggested privately owned models could be permitted on the roads. Yet, with the Conservative leadership contest ongoing, we will not know until early September 2022 who will be prime minister or transport secretary. We still expect private e-scooters to be legalised, but the detail must wait for the new government. Safe legalisation demands firm rules and protection for those injured by riders, ideally through compulsory third party insurance. Any framework should set clear standards, including: Maximum power Speed limits Lights and indicators The government must also determine how it will enforce any new rules, given current difficulties tackling illegal use of privately owned e-scooters. How will this affect personal injury claims...

Hymans Robertson LLP Hymans Robertson LLP stated that numerous providers still face significant effort and resource demands to overhaul their practices and processes in order to meet the FCA’s consumer duty expectations. It also observed that many pension providers are still absorbing the extent of changes needed to satisfy its standards, warning firms not to misjudge the time required to prepare for the incoming rules. The FCA is anticipated to set out its definitive rules, with the implementation date, before the close of July 2022. The draft package sets out a wide suite of obligations for banks, insurers and other financial sector firms to make sure clients are not exposed to financial detriment. Karen Brolly, head of financial services at Hymans Robertson, said the new regime for the sector......