Worldwide: Reinsurance

This article explains the decision and reasoning in King Trader and then examine how it could be relevant to contractual interpretation in Australia.

Eight key developments shaping the year ahead.

AFCA serves as an independent body that specialises in resolving financial disputes, including those related to travel insurance.

This decision may undercut the normal policy that reinsurance proceeds should be quarantined from paying out creditors.

Policies usually give the insurer the right to exclude or cancel the insured's claim where there is terrorist event.

This recent judgment helpfully illustrates the operation of a priority application in relation to reinsurance proceeds.

In Zheng v Cai [2009] HCA 52 the High Court held that payments made by a church to an injured plaintiff were not to be considered in the plaintiff’s economic loss assessment.

Undefined terms in a reinsurance treaty led to a broad interpretation of the words “Trade Credit” that resulted in the reinsurer, General Reinsurance Australia Ltd (Gen Re) being liable for its share of a claim that it maintained was not intended to be covered by the treaty.

“Lexington Insurance Company v AGF Insurance Limited"; "Lexington Insurance Company v Wasa International Insurance Company Limited” [2009] UKHL 40 confirms that where the laws of the insurance and reinsurance contract differ, it is no longer safe to assume that cover under a facultative reinsurance contract incorporating the terms of the underlying insurance contract will be ‘back-to-back’.