Appropriate Place Of Duty

Appropriate Place of Duty

The standard structure of a collateralised reinsurance agreement is relatively straightforward: the parties enter into a form of reinsurance contract and the reinsurer posts collateral to cover its maximum liability in the event of a claim s under that contract. In the latter case the collateral is held by the Trustee either until maturity at which time it is returned to the seller ; or until a claim is made against the The Ethics Of Privacy contract when the collateral, or a portion of the collateral depending on the claim, is paid to the reinsured.

Whilst the market is well versed in negotiating and entering into reinsurance agreements, there are a number of legal issues that arise Appropriate Place of Duty considering Trust Deeds that deserve particular attention: 1. Standard agreements will often provide that the Trustee disclaims responsibility for any loss caused by negligence, gross negligence or even recklessness. Under English law, a Trustee cannot disclaim liability for its own fraud, though it can do so for the fraud of its agents or sub-contractors. Some banks are reasonably flexible about the standard of care they are to provide: they may, for example, accept liability for recklessness or gross negligence, though it is unlikely that a Trustee will accept liability for mere negligence.

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The structure by which instructions are given to the Trustee must therefore be examined carefully to ensure that neither party to the reinsurance can be prejudiced by the terms of the Appropriate Place of Duty Deed. Furthermore, in a situation where two interrelated agreements stand side-by-side the reinsurance contract and the Trust Deedit Appropriate Place of Duty especially important to ensure that any definition in one agreement is mirrored in the other. Mechanism for Draw-downs: This will depend on the reinsurance structure in place. If there are no claims reported, then the collateral can be released within a defined period after the policy expires, albeit if the reinsurance contract is to be renewed, the parties will obviously need to discuss the collateral funding of the renewed contract whilst the collateral is still held as regards the expiring contract as discussed below.

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https://modernalternativemama.com/wp-content/custom/research-paper/related-literature-of-the-healthcare-system.php situation is more complicated where claims are reported, either during the policy period or any pre-agreed reporting period. Clearly in such a case, the cedant will wish for collateral to be retained in any trust account to meet any claim, but estimating the value of such a claim can be difficult and is open to disagreement.

Contractual mechanisms therefore need to be drafted carefully to reflect how the collateral will be dealt with in such a case, particularly where it is The Ethics Of Privacy that only part of the collateral will be required to meet any future claim. Parties may wish to consider the use of independent actuarial evidence to quantify the amount of collateral that must be retained, and also over what time period. Care should also be taken to deal with continue reading situation where policy coverage issues arise and there may be a dispute as to whether any collateral needs to be retained at all.

We have seen issues arise where, for example, LOCs are not linked to the reinsurance contract, thus exposing the reinsurer to the possibility of paying twice.

Renewal Issues: Renewal often creates a practical difficulty as to how to manage the period between expiry of the first contract and the inception of the second. For example, if the first reinsurance contract terminates on 1 January, and the second incepts on the same date, it will often be the case that the collateral for the first period will need to stay in place for any final accounting. Each party, therefore, has competing interests: the reinsured will want to be fully collateralised for both Appropriate Place of Duty https://modernalternativemama.com/wp-content/custom/research-paper/safe-drinking-water-research-paper.php reinsurer will understandably be reluctant to increase the funds it allocates to the reinsurance contracts for that period.

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Each situation is different: some contracts, for example, provide for abatements to the amount of collateral posted as the insured year progresses. Others require the full amount of capital to be posted for the entire year. The parties will, therefore, need to focus on the particular circumstances of their contract in coming to an acceptable solution. Summary Collateralised reinsurance comes in myriad forms, but the similar Appropriate Place of Duty problems pervade them all. Careful thought must be given to the issues outlined above in order to minimise the potential for disputes.

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Appropriate Place of Duty - the answer

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