3. News from the Working Parties

REINSURANCE WORKING PARTY

The Reinsurance Working Party held a meeting at the Centro Convenciones Mapfre in Madrid on 11 November 2004. The meeting was chaired by Michael Mendelowitz, in Colin Croly’s absence.

Questionnaire update

The meeting began with a brief update on the progress of the AIDA Reinsurance Working Party Reports. It was acknowledged that the redraft of Questionnaire No 1 has been approved and would be circulated with the meeting minutes. The deadline of 1 April 2005 was set for the return of updated responses. Questionnaire No 3 had been revised but not yet circulated. Questionnaire No 7 is due to be prepared after the next meeting of the Reinsurance Working Party, to give the relevant European Union Directive time to be fully implemented throughout the EU. On Questionnaire No 8, Peggy Sharon reported that 11 responses had been received. The reporter was still awaiting a US response. A request will be made to the Australian chapter for an early response. Final responses are required by 1 April 2005. Peggy informed the meeting the report would take approximately one month to complete once  the last responses had been received. Questionnaire No 9 was approved and is due to be circulated with the meeting minutes. The deadline for responses to this questionnaire was set for 1 April 2005.

Report publication update

Report No 4 had been published since the last meeting and a copy was circulated. Advance orders had been received for Reports 4, 5 and 6.

Michael reported that Reports 5 and 6 were at the proof-reading stage and would be published shortly.

He further informed the meeting that the Spanish Chapter had offered to translate the Reports into Spanish. As copyright in the texts vests in AIDA, he did not think there would be any difficulty in that regard. The cost for translation in London is £4,000 per report, and it can be done more cheaply by the Spanish Chapter. There may be a copyright issue with the design, and this matter will have to be investigated.

New questionnaire ideas

The possibilities suggested included bad faith (Dick Kennedy volunteered at the last meeting, to be pursued), commutations (Lars Moelgaard and Rose-Marie Lundstrom volunteered at the last meeting, to be pursued) and inspections: how they work in various jurisdictions; rights of inspection in the absence of a clause; confidentiality and privilege in respect of inspected documents; status of documents discovered on inspection; rights over the documents; right of retrocessionaire to seek inspection of documents from other parties, e.g., brokers, direct insurer.

Arbitration v Mediation: An Update

Rob Merkin, Reinhard Dallmayr, Enrique Navarro and Mikael Rosemejer gave short presentations on the operation of mediation and arbitration in their jurisdictions.

Developments in Brazil

Sergio Mello gave a short presentation on developments in Brazil.

Next Meeting

The next meeting is provisionally due to take place in Berlin on 25 May 2005. Stefan Speyer suggested that two individuals from Allianz could be invited to give a presentation at the next meeting on alternatives to cut-through.

Publication of AIDA Reinsurance Working Party Report 5

Report 5: ‘Evidence of Custom and Practice in the Interpretation of Reinsurance Contracts’, edited by Katherine B Posner, is now available to buy. The Report provides a compendium of international responses to a questionnaire.

For further details on all available Reports, please click on the link below which will take you to a flyer that provides price and purchase information. The completion and return of the order form contained therein will secure your copy of the Report(s).

Click here to access the Reinsurance Working Party Report flyer

MOTOR INSURANCE WORKING PARTY

Report on the activities of the Motor Insurance Working Group

The Motor Insurance Working Group (“MIWG”) generally meets twice in a year. Currently the Presidency of the Group is managed by Dr. Armando Zimolo (Assicurazioni Generali, Italy) and Vice-Presidents are Dieter Pscheidl (AVUS, Austria) and Jan Misana (Insurer’s Institute on Personal Injury, Netherlands).

At the present time, the MIWG has four ongoing studies: the completion of the enquiry on “the Normative and Management Characteristics of Motor Third Party Liability (“MTPL”) in the world”; the development of studies on “Compensation Trends of non pecuniary losses”; “the Protection of the Victims with particular reference to weaker parties”; and the analysis of fraud spread in the insurance sector and the existing undertakings in order to counter them.

The MIWG last met within the frame of the VIII Budapest Insurance Colloquium on 25 November 2004. An updated version of the Group’s basic study was presented, which (currently) compares compulsory MTPL insurance in 193 Countries, with data acquired up to October 2004.

Regarding the latest changes, in May 2004, ten further countries became full members of the European Union having agreed to abide by the rules set by all past and future Directives. In the same month, the compulsory MTPL law also took effect in China. In Lebanon, the compulsory MTPL law was enacted on 5 April 2003, and in Mozambique the same law took effect in June 2003. Therefore, it has now been ascertained that as many as 157 countries out of 193 analyzed in the report have enacted laws on mandatory MTPL insurance, while such legislation still does not exist in 33 countries

The liberalization and deregulation of newly de-monopolized markets like India and China, have made them more accessible and attractive to foreign insurers. In fact, in 2003, these two countries are reported to be ranking among the top 10 out of 30 emerging insurance markets and to have impressive growth prospects on account of their huge populations, growing economic importance and fast liberalizing regulatory regimes.

As regards Israel, with the dissolution of Avner completed by early 2003, the Government brought about a staggering reform in so far as, from a semi-nationalized industry, the compulsory motor insurance sector was liberalized and insurers had to bear the entire insurable risk without co-insurance with Avner.

Furthermore it has been ascertained that countries not belonging to the EU, like Albania, Bosnia-Herzegovina and Iran have joined the already large number of countries operating a Guarantee Fund.

Another substantial step forward was accomplished by Italy where a new procedure has been operational since 2 June 2004: the so-called CID-Lesioni - a Direct Compensation Agreement which, in addition to Property Damage, now includes Personal Injuries.

President Zimolo’s report ended by analyzing the existing undertakings in order to counter frauds spread in the insurance sector.

Vice-President Pscheidl then reported on the MTPL trend at an international level focusing attention on the “Compensation Trends of non pecuniary losses” study.

After these general presentations, Mr. Frank Lewis, General Secretary of the Guarantee Fund, reported on the Compensation Body and Guarantee Fund under the Fourth Motor Directive in France, providing practical examples of cases where road accidents had occurred in a different country from that of the residing one.

Vice-President Pscheidl then mentioned the comparative law analysis by Mrs. Patricia Jaramillo Salgado regarding automobile liability insurance in Iberic-American countries, specifically considering experience in Argentina, Colombia, Mexico, Paraguay and Spain. As far as South-American countries are concerned, liability for the acts derived from traffic accidents is governed by general liability principles by culpability, even though in Mexico it is also necessary to look at the federal labour law. In Spain, there are some special provisions for traffic accidents, specifically Law 632/68 regulates liability in the circulation of motor vehicles applying an objective liability regime.

It is the aim of the Standing Working Committee to present a final updated version of the master study at the next AIDA World Congress which will take place in Buenos Aires in 2006.