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LLR: Insurance & Reinsurance RSS feed

T G A CHAPMAN LTD BENSON TURNER LTD v CHRISTOPHER SUN ALLIANCE AND LONDON INSURANCE PLC

Costs - Order against non-party - Liability insurance - Claim against tortfeasor - Tortfeasor insured under liability policy - Claim defended by liability insurers who had conduct of litigation and fought claim exclusively to defend their own interests - Defence failed in its entirety - Exercise of the courts discretion - Supreme Court Act 1981 sect 51 - Whether insurers guilty of unlawful maintenance - Whether insurers contractual limit of liability relevant feature - Whether court must exercise fresh discretion in deciding upon appropriate costs order.

[1998] Lloyd's Rep IR 1

ECONOMIDES v COMMERCIAL UNION ASSURANCE CO PLC

Householders insurance - Non-disclosure - Misrepresentation - Sum insured increased from £12,000 to £16,000 - Burglary resulting in loss of valuables - True value found to be £40,000 - Representation by assured to insurers on renewal that he believed full contents value to be £16,000 - Whether assured under obligation to carry out specific enquiries or otherwise take steps to provide objective justification for valuations - Whether “knowledge” in declaration meant actual knowledge, subject only to qualification that insured could not be heard to say that he did not know fact when he had wilfully and deliberately shut his eyes to evidence of that fact - Governing principle on duty of disclosure where assured effected insurance cover as private individual and not in ordinary course of business - Whether assured under obligation to make further enquiries to establish reasonable grounds for belief in accuracy of valuations - Meaning of “I declare... to the best of my knowledge and belief in proposal form - Whether policy liable to be avoided at option of insurers if insured, in giving insurers (whether in proposal form or on renewal) a value for what is to be insured, gives too low a value, even though insured in giving that value was purporting to do so to the best of his knowledge and belief and was acting honestly and-subjectively- reasonably.

[1998] Lloyd's Rep IR 9

FAI GENERAL INSURANCE CO LTD v OCEAN MARINE MUTUAL PROTECTION AND INDEMNITY ASSOCIATION AND ANOTHER

Jurisdiction - Reinsurance contract - English jurisdiction clause - Claims by reinsurer in New South Wales court for declarations that reinsurance properly avoided - Claim in English courts by reinsured for declarations that reinsurances were valid and enforceable - Whether contracts included clauses by which parties agreed to exclusive jurisdiction of English courts - Whether, as matter of construction, contracts provided for exclusive jurisdiction of English courts - Whether New South Wales court should decline to exercise jurisdiction and whether reinsured should be restrained from continuing with English proceedings.

[1998] Lloyd's Rep IR 24

SPHERE DRAKE INSURANCE PLC ALEXANDER HOWDEN HOLDINGS PLC v BASLER VERSICHERUNGS-GESELLSCHAFT ALBA ALGEMEINEVERSICHERUNGS-GESELLSCHAFT THE ORION INSURANCE COMPANY PLC v BASLER VERSICHERUNGS-GESELLSCHAFT THE BALOISE MARINE INSURANCE COMPANY LIMITED

Pool - Settlement - Related underwriting arrangements - Whether run-off reinsurer agreed to share pool members trading losses - Whether a valid compromise - To whom was any obligation owed and what was its extent - Condition precedent and repudiation - Effect of Wellington Agreement - Pool underwriters authority during run-off period - Whether Marine Pool Agreement gave underwriter power to subscribe to Wellington Agreement - Settlement of claims for which underwriter was not actually or potentially liable - Material alteration of underlying contract terms - Limitation and suspension of obligations.

[1998] Lloyd's Rep IR 35

MANDER AND OTHERS v COMMERCIAL UNION ASSURANCE COMPANY PLC AND OTHERS MANDER AND OTHERS v PRUDENTIAL ASSURANCE COMPANY LTD PEARL ASSURANCE PLC MANDER AND OTHERS v GYNGELL DOBINSON GREGORY COMPANY LTD DAVID GYNGELL & COMPANY LTD

Retrocession - P&I risks - Declarations - Whether properly made and accepted - Reinsured subscribing to open covers developed by brokers for insurance of marine P&I liabilities - Brokers seeking to retrocede reinsureds liabilities under those covers by declaring them under further open Marine Multi-liability Cover subscribed by defendant reinsurers - Actions by reinsured against reinsurers - Reinsurers alleging that (1) no proper declarations were made and accepted under cover; (2) if there ever were contracts of reinsurance, such contracts had been validly avoided - Counter-allegations of estoppel, waiver and ratification - Settlement between reinsured and following reinsurers - Whether leading reinsurers had no authority under the cover to bind following market - Whether brokers were liable to indemnify reinsured against loss of reinsurances, both so far as security of reinsurers was concerned, and so far as security of following market was concerned.

[1998] Lloyd's Rep IR 93

INSURANCE CORPORATION OF THE CHANNEL ISLANDS ROYAL INSURANCE (UK) LTD v THE ROYAL HOTEL LTD AND OTHERS

Non-disclosure - Fire insurance - Materiality - Inducement - Affirmation - Estoppel - Abuse of process - False invoices raised by insured for submission to bankers prior to renewal.of material damage and business interruption fire insurances - Insurers solicitors tactical decision not to raise non-disclosure point at fraud action - Following judgment in fraud action insurers decision to avoid material damage policy on grounds of non-disclosure - Whether knowledge and intentions of insureds director and company secretary attributable to insured - Whether insureds conduct material - Whether insurer induced to underwrite renewal of material damage policy by non-disclosure of that conduct - Effect of party to arbitration allowing further performance by arbitrator - Whether insurers had affirmed material damage policy - Whether precluded, on grounds of estoppel or abuse of process, from avoiding policy.

[1998] Lloyd's Rep IR 151

JORDAN GRAND PRIX LTD v BALTIC INSURANCE GROUP AND OTHERS BALTIC INSURANCE GROUP QUAY FINANCIAL SOFTWARE LTD DESMOND GIBLIN

Jurisdiction - Insurance - Brussels Convention - art 11 - Whether limited to insurer which was itself domiciled in contracting state - Right. of insurer not domiciled in contracting state to counterclaim against co-defendants domiciled in contracting state - Whether art 11 applied to defendants to counterclaim who were not policyholders, insured persons or beneficiaries (but were directors of policyholder and alleged conspirators).

[1998] Lloyd's Rep IR 180

MANNING THE SOCIETY OF LLOYD’S THE SOCIETY OF LLOYD’S v COLFOX, COLFOX, HARRIS AND HICKS PHILIPS THE SOCIETY OF LLOYD’S

Lloyd’s - Reconstruction and Renewal Plan (R&R) - Contract - Offer and counter-offer - Acceptance - “Reconstruction and Renewal Settlement Offer” - Acceptance Form returned by individual Names with counter-offer made by alterations of or additions and/or covering letter to Acceptance Form - Return of photocopied acceptance form by junior Lloyd’s staff stamped “RECEIVED” and “ACCEPTANCE” - Whether that constituted objectively to Name in relevant Names position an acceptance of his counter-offer - Applications by Lloyd’s for summary judgment - Whether each relevant Name had arguable defence that it constituted such an acceptance of his counter-offer or whether there was fair and reasonable probability of Name having real or bona fide defence.

[1998] Lloyd's Rep IR 186

BROWN (R E) AND OTHERS v GIO INSURANCE LTD

Excess of loss reinsurance - Construction - Special Conditions - “each and every loss and/or series of losses arising out of one event” - “The Reassured shall be the sole judge as to what constitutes each and every loss and/or one event.” - “The Reassureds definition of each and every loss and/or event shall be final and binding on the Reinsurers hereon.” - Whether parties intended to give reassured power to decide, in making claim, whether losses arose from one or more events for purpose of aggregation - Whether reassureds decision was a finding that the state of mind of each Individual underwriter was an “event” - Whether negligent underwriting could be an event - Whether reassureds decision reasonable.

[1998] Lloyd's Rep IR 201

THE GENERAL OF BERNE INSURANCE COMPANY v JARDINE REINSURANCE MANAGEMENT LTD

Costs - Recovery by client - Contentious business agreement - Whether plaintiff clients entitled to claim from defendants on taxation hourly expense rates including uplift which were greater than they themselves were obliged by contract to pay to their own solicitors - Solicitors Act 1974 sect 60(3).

[1998] Lloyd's Rep IR 211

LUDGATE INSURANCE COMPANY LTD v CITIBANK NA

Letter of credit - Reinsurance - London Market Letter of Credit Scheme - Banks powers - Letters of credits issued by bank for insurance companies secured by cash deposits - Whether bank was wrongly retaining too much collateral in support of letters of credit - Whether bank had reserved right to look to insurer to secure liability of London market pool members - Whether bank entitled to retain in segregated insurers account such additional margin as it considered appropriate in all circumstances - Whether bank had authority under agreement to draw on insurers deposit account for interest.

[1998] Lloyd's Rep IR 221

KEN RANDALL ASSOCIATES LTD v MMI COMPANIES INC

Insurance company - Sale and purchase - Claims by purchaser for understatement of brokers balances; suspense account, and overstatement of reinsurance recoveries.

[1998] Lloyd's Rep IR 243

ROBERT IRVING & BURNS v STONE AND OTHERS

Professional indemnity insurance - Surveyor - “Claims made” - Whether indicating that there had been communication by client to surveyor of some discontent which would, or might, result in remedy expected from surveyor - Surveyors required to give to insurers details in writing of any circumstances of which insured should first become aware. during Certificate Period which might give rise to claim against them - Whether claim made when writ issued but not served during policy period.

[1998] Lloyd's Rep IR 258

CHARTERHOUSE DEVELOPMENT (FRANCE) LTD v SHARP FINANCIAL INSTITUTIONS INSURANCE BROKERS LTD ROYAL BANK INSURANCE SERVICES LTD

Bankers Blanket, Computer Crime and Professional Indemnity Insurance - Venture capitalist - Merchant bank - Subsidiary investing in French company - Subsidiary becoming a director - Company going into liquidation - Order of French court directing subsidiary to pay proportion of losses - Whether underwriter reading insureds brochure would be aware that insured might appoint non-executive director to join investee companys board - Whether appointment of such director could be provision by assured of service described In proposal form and covered within policy wording - Whether such service finished on appointment being made - Administrators claim against insured company - Whether claim arose out of ordinary course of insureds provision of service of being a director - Whether claim for financial loss caused by negligent act, error or omission on part of individual through whom insured exercised duties as director - Whether claim was for compensatory damages - Interpretation of French law - Whether claim excluded under policy exceptions - Quantum of damages.

[1998] Lloyd's Rep IR 266

YASUDA FIRE & MARINE INSURANCE COMPANY OF EUROPE LTD v LLOYD’S UNDERWRITING SYNDICATES NOS 229, 356, 462, 571, 661 AND 961

Excess of loss - Whole account - Aggregate extension clause - Construction “losses on risks covering on an aggregate basis” - Whether underlying policies/contracts to be equated with reference to “all aggregate policies or contracts coming within the scope of this protection” - Whether risks under professional liability policies/ contracts covered on an each and every claim basis - Necessity of adding together claims and losses for purpose of establishing whether underlying policys limit had been reached - Whether such additions of individual claims and losses constituted “risks under policies/contracts reinsured hereby covering on an aggregate basis” - Effect of deductibles under policies and other provisions such as per claim retention/deductible subject to leap down, fixed retention/deductible and excess layer drop down.

[1998] Lloyd's Rep IR 285

BAKER v BLACK SEA & BALTIC GENERAL INSURANCE COMPANY LIMITED

Proportional facultative obligatory reinsurance - Costs/legal expenses - Implied term - Market custom - Cover note providing “wording to be agreed”, “subject to all terms, clauses and conditions as the original and to follow the settlements and agreements of [reinsured] in all respects” - General portfolio of US and Canadian fire and casualty business - Reinsurers liability in respect of amounts paid by reinsured to its assured or reassured in respect of costs! legal expenses - Whether term implied by law or by market custom.

[1998] Lloyd's Rep IR 327

DENBY V ENGLISH AND SCOTTISH MARITIME INSURANCE CO LTD AND OTHERS YASUDA FIRE & MARINE COMPANY of EUROPE LTD V LLOYD’S UNDERWRITING SYNDICATES NOS 209, 356 AND OTHERS

Contract - Construction - Whole account excess of loss reinsurance contracts - Coverage of all losses occurring during a defined period “in respect of risks written prior 1022 October 1982” - Reinsureds underwriter subscribing to AUPI lineslip prior 10 October 22, 1982 but stamp for both marine (700) and non-marine (701) Syndicate placed on line-slip and signature of 5 per cent line without dividing percentage - Whether syndicate 701 not upon risk at all prior 10 October 21, 1982 in that 5 per cent attributable to 700 alone - Line of 701 reduced - Whether note on slip recorded formation of totally new contract - Whether declarations were “risks written” because line-slip was only an authority to write risks - Applicability of contra proferentem doctrine - Construction of aggregate extension clause.

[1998] Lloyd's Rep IR 343

J A CHAPMAN & CO LTD (In Liquidation) v KADIRGA DENIZCILIK VE TICARET J A CHAPMAN & CO LTD (In Liquidation) v CHIOS BREEZE MARINE COMPANY J A CHAPMAN & COMPANY LTD (In Liquidation) VKADIRGA DENIZCILIK VE TICARETAS

Marine insurance - Premium - Relationship and status of broker - General rule that premium payable to broker - Broker insolvent - Agreement ousting general rule - Clear words required - Effect of payment of premium warranty, brokers cancellation clause - “Premium due and payable to [broker] at inception of risk, or as agreed” - Payment of premium clause - Instalment payments - Successive instalments due and payable on dates which occurred at three monthly intervals during term of policy - Whether premium, which comprised aggregate of instalments, was itself divisible between successive three month periods.

[1998] Lloyd's Rep IR 377

KNAPP AND KNAPP v ECCLESIASTICAL INSURANCE GROUP PLC AND SMITH

Limitation - Broker - Renewal of policy - Duty of care - Alleged breach of duty in renewing house and contents insurance - Insurance voidable by insurers - Whether insureds cause of action in tort against broker was time barred -. Date when insured first suffered damage as result of brokers breach of duty so as to-make that breach actionable - Whether date when renewal cover attached or date when insurers elected to avoid policy or date when fire occurred.

[1998] Lloyd's Rep IR 390

JOHN A PIKE (BUTCHERS) LIMITED v INDEPENDENT INSURANCE COMPANY LIMITED

Insurance (commercial combined) - Policy - Construction - Theft - “the premises” - Express exclusion of yard - Whether “the premises” meant whole of property occupied by insured - Whether exclusion was intended to apply generally throughout policy section - Applicability of contra proferentem rule - Whether theft involved “entry to and exit from the Premises by forcible and violent means”.

[1998] Lloyd's Rep IR 410

MUNICIPAL MUTUAL INSURANCE LIMITED v SEA INSURANCE COMPANY LIMITED COMMERCIAL UNION ASSURANCE COMPANY PLC ROYAL INSURANCE (GLOBAL) LIMITED MARITIME INSURANCE COMPANY LIMITED NAVIGATORS & GENERAL INSURANCE COMPANY LIMITED INSURANCE COMPANY OF NORTH AMERICA (UK) LIMITED PRUDENTIAL ASSURANCE COMPANY LIMITED PEARL ASSURANCE PLC THE LONDON ASSURANCE ALBION INSURANCE COMPANY LIMITED GUARDIAN ROYAL EXCHANGE ASSURANCE PLC GENERAL ACCIDENT FIRE AND LIFE ASSURANCE CORPORATION PLC

Facultative reinsurance contracts - Legal liability - Excess - Construction - Terms to be implied - Reinsurance of ports liability - Damage caused by groups of individuals over 18 months - Whether reinsurance contracts provided that loss or damage which arose over period spanning more than one period of insurance under underlying policy was to be treated for purposes of determining amount of reinsurers liability either: (i) by reducing reinsureds liability under underlying policy by amount of excess applicable in respect of each year and then apportioning resulting figure on “time on risk basis” between periods of insurance over which such loss and damage had occurred, or (ii) by apportioning reinsureds liability under underlying policy on “time on risk basis” between periods of insurance over which such loss and damage had occurred and then reducing resulting figures by amount of excess applicable in respect of each year.

[1998] Lloyd's Rep IR 421

SKANDIA INTERNATIONAL CORP AND ANOTHER V NRG VICTORY REINSURANCE LIMITED COMMERCIAL UNION ASSURANCE PLC INDEMNITY MARINE ASSURANCE COMPANY LIMITED OCEAN MARINE ASSURANCE COMPANY LIMITED THE LONDON ASSURANCE GAN INSURANCE COMPANY LIMITED BISHOPSGATE INSURANCE LIMITED V NRG VICTORY REINSURANCE LIMITED

Non-proportional excess of loss - Legal liability - No follow settlements clause - Promise to indemnify reinsured in settlement of its net loss - Payment made by direct insurers pursuant to settlement - Reinsurers right to require reinsured to show that he was legally liable to original assured - Judge equated US attorneys prediction with actual verdict of Texas court - Whether summary judgment in favour of reinsured should be set aside.

[1998] Lloyd's Rep IR 439