5 News from the Working Parties

REINSURANCE WORKING PARTY

The AIDA Reinsurance Working Party Reports

When the Reinsurance Working Party was established, more than 10 years ago, one of its goals was to produce a comparative study into Reinsurance Law worldwide, drawing on the experience and knowledge of the members of the Working Party. It was decided to circulate questionnaires on key areas in Reinsurance Law, with the editor drawing all of the responses together into the Report, which would be commercially published.

To date, three reports; “What is Reinsurance?” edited by Rob Merkin, “Follow the Settlements” edited by Rob Merkin, and “Proper Law of Reinsurance Contracts” edited by Barlow Lyde & Gilbert; have been published. The Reinsurance Working Party has now completed a further three Reports, entitled: “The Meaning of ‘Event’ and Similar Phrases in Reinsurance Contracts”, edited by Michael Mendelowitz, “Custom and Practice”, edited by Katherine Posner; and “Cut Through and Transfer Reconstruction Issues”, edited by Michael Gill and Andrew Toland. These Reports will be published by the AIDA Reinsurance Working Party in May 2004.

This will be the first time the Reinsurance Working Party has undertaken the task of publishing the Reports itself. The major advantages of bringing the publication 'in house' is that we can offer the Reports for sale at cost, so that these important studies can reach the widest audience through AIDA worldwide, and beyond to the wider legal community. This is made possible by Barlow Lyde & Gilbert, who have undertaken the task of producing the reports on behalf of AIDA, and by the editors' firms (Barlow Lyde & Gilbert, Condon & Forsyth and Phillips Fox) who have all agreed to underwrite the printing costs of their respective Reports. Further, AIDA is indebted to the Spanish National Chapter who have generously offered to financially assist with the translation of the Reports into Spanish.

If you would like more information about the AIDA Reinsurance Working Party generally please contact its Chairman, Colin Croly (ccroly@blg.co.uk). If you would like to express an interest in the forthcoming reports, and to be notified of the publication dates and purchase arrangements, please contact mmcconway@blg.co.uk.

Recent Reinsurance Working Party Meeting

The Reinsurance Working Party met in Brussels during the Belgian colloquium in December 2003. The meeting began with an update on the status of the Reinsurance Working Party reports.

Michael Gill (Australia) on the far left, delivering a presentation to the Reinsurance Working Party

Left to right: Stefan Speyer (Germany), Colin Croly (United Kingdom), Christian Bouckaert (France) & Carole Sportes (France)

Reinsurance Working Party Questionnaires

Colin Croly (Chairman) emphasised the importance of receiving a minimum of 14 responses to each questionnaire in order to produce a meaningful report. He highlighted the need to receive responses quickly in order to prevent material becoming out of date.

The possibility of creating a further questionnaire in the future, on commutation and run-off, was noted. Michelle George pointed out that there is a market report on these issues due in 2004 so it may be possible to produce a questionnaire in light of that report.

Update

A revised version of Questionnaire 1 was considered. It was agreed that the section on ART should be expanded and that fronting should be treated separately. Accordingly, Questionnaire 1 will be redrafted by Robert Merkin and circulated before the next Reinsurance Working Party meeting.

Michael Mendelowitz reported that Report 4 (on the Meaning of 'Event' and Similar Phrases) has been prepared and that there were 15 responses, some of which have been updated since they were initially prepared. Michael emphasised the need to published Report 4 quickly, before the World Trade Centre litigation progressed further.

Report 5 (Custom and Practice) is ready for publication and Report 6 (Cut-through and Transfer Reconstruction Issues) has been prepared. Michael Gill and his team were thanked for their preparation of Report 6.

Rob Merkin reported that Report 7 cannot be prepared until the EC Directive relating to intermediaries, has been implemented. This is due to take place at the beginning of 2005 and should clarify the position within the member states, after which the questionnaire will be re-issued.

Peggy Sharon explained that there had been few responses to Questionnaire 8 (Limitation) from common law jurisdictions. Authors from Barlow Lyde & Gilbert and Denton Wilde Sapte agreed to meet and pool their responses in order to produce the UK response to this questionnaire.

Questionnaire 9 (Insolvency) is in draft form. It was agreed that this Questionnaire should be extended to conflict of law issues, especially in light of the EC Regulation on conflict of laws and insolvency. It was also suggested that it include questions on whether there should be a guarantee or reserve fund in the event of insolvency and whether commutation agreements receive any form of protection in insolvency. Further, a question should be included on the application for insolvency proceedings and the administration of insolvency. Michelle George and Michael Gill offered to draft some questions to assist the Argentine chapter, who drafted the questionnaire, with this.

Publication

It was agreed that the reports are to be published privately by AIDA. Sponsorship was suggested as a means of underwriting the publishing costs of each report. Colin Croly further suggested that the Reporter's firm should have first refusal of the sponsorship of the report. Further possibilities to consider were advance sales to organisations and electronic publishing.

The possibility of having the reports translated into Spanish was considered and it was agreed that a sponsor for translation would also need to be found. In relation to the outstanding reports, yet to be published, it was agreed that members of the Working Party would investigate whether their own firms would be interested in sponsoring publication and would let Colin know the outcome of these investigations, by the end of January.

It was agreed that copyright in each Report should vest in the AIDA Reinsurance Working Party.

Presentation by Michael Gill

Michael Gill gave a presentation on the financial reinsurance contracts entered into by FAI, as investigated by the Royal Commission into the collapse of HIH. He also analysed the recent decision in New Cap Re v Faraday Underwriting Ltd.

Next Meeting

The next Reinsurance Working Party meeting will be held in London on 19 May 2004, to coincide with the British Insurance Law Association's (BILA) 40th Anniversary Colloquium on 20 and 21 May 2004. The venue of the second Reinsurance Working Party meeting of the year will depend upon where the Presidential Council meet. [Note: it has since been decided that the Presidential Council will meet in Madrid in November 2004]

Next Reinsurance Working Party Meeting

The next meeting will take place on 19 May 2004 at 11am at Barlow Lyde & Gilbert, Beaufort House, 15 St Botolph Street, London EC3A 7NJ. A full agenda will be circulated to all members and will be available on the AIDA website shortly. This meeting is being held to coincide with the BILA 40th Anniversary London Colloquium, and BILA have very kindly invited the AIDA Reinsurance Working Party members to a drinks reception hosted by BILA at the offices of Barlow Lyde & Gilbert on 19 May from 6 - 8pm, to welcome the AIDA Presidential Council, the AIDA Reinsurance Working Party and members of overseas AIDA Chapters who are attending the Colloquium. If you are planning on attending either the working Party meeting, or the drinks reception, please advise mmcconway@blg.co.uk.

POLLUTION, PRODUCT LIABILITY & NEW TECHNOLOGIES WORKING PARTY

Next Meeting

The Pollution, Product Liability & New Technologies Working Party are holding a meeting to coincide with the BILA colloquium in May 2004. The Working Party will meet on Friday 21 and Saturday 22 May 2004, at the office of Reynolds Porter Chamberlain in London. For more information, please contact Robert Hogarth via email at rjh@rpc.co.uk.