By James Crabtree, Anthony Menzies, Jonathan Rogers, and Susannah Wakefield, Partners, Taylor Wessing
This chapter begins in Section 79.01 with a discussion of the history and structure of the Lloyd's Market. A clear understanding of the Lloyd's (and wider London) Market, as it operates today, benefits from an understanding of relevant historical landmarks. The shaping of the market over the decades provides a background to and part explanation of, today's dynamic, international marketplace.
Section 79.02 switches focus to the Company Market and its role in the underwriting of business by way of subscription.
It is vital to understand the identity and roles of the various participants engaged in the placing of reinsurance risks in the London Market and Section 79.03 deals with this, as well as with the legal nature of the risk placement. Risk placements can involve the communication of complex information relevant to the decision-making of underwriters. It is therefore essential to have a sound grasp of the legal nature of reinsurance contracts, the fundamental duties resting upon the parties to those contracts, and the legal effect of the different terms and conditions which comprise their dealings. These contracts often consist of terms implied by law, as well as terms expressly agreed to by the parties. Complexity can often be introduced into the picture when standard market terms are incorporated into reinsurance contracts, or when reinsurance contracts import the provisions of underlying insurance contracts. The documentation evidencing reinsurance contracts has undergone material change since the beginning of the twenty-first century and Section 79.03 also discusses the principal contract terms and wordings now utilized in the London Market. In addition, Section 79.03 addresses the important issues surrounding the variation, renewal, termination and transfer of reinsurance contracts.
The Claims Process is covered in Section 79.04, focusing on both claims administration and contractual issues regulating the presentation and recovery of claims, such as notification obligations, cooperation between reinsureds and reinsurers, and the basic matter of when a reinsurer is required to follow the claim settlements of the reinsured.
Section 79.05 extends the horizon by capturing the fundamental legal principles which regulate the choice of governing law and the determination of the court jurisdiction within which disputes are to be resolved. This Section also discusses the procedural rules applying in the English Courts, as well as the English statutory regime governing the conduct of arbitration proceedings.
Finally, the regulatory framework within which the London Market functions is addressed in Section 79.06.
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James Crabtree is a partner in Taylor Wessing's London office and coordinates the firm's international insurance and reinsurance practice. He advises numerous participants in the international insurance and reinsurance markets on a wide variety of complex claims and coverage issues. He also advises on the terms and conditions of insurance and reinsurance contracts and appears in The International Who's Who of Business Lawyers 2011.
Anthony Menzies is a partner in Taylor Wessing's London office. He advises on direct and reinsurance claims and coverage disputes, often with an international element, often involving insureds, insurers or reinsurers in the US, Bermuda and the Caribbean. He has previously practised in the Cayman Islands.
Jonathan Rogers is a partner at Taylor Wessing's London office and specializes in financial services regulation. He advises insurance companies and brokers and other financial services sector institutions on the full range of FSA regulation, as well as on matters deriving from the European framework for financial services.
Susannah Wakefield is a partner at Taylor Wessing's London office, specializing in insurance and reinsurance litigation and arbitration. She has practised for many years in New York and Bermuda, as well as in London and has handled numerous international claims and coverage disputes, as well as advised on complex policy wordings.
The authors wish to thank their colleagues, Lisa Morton, Matthew Nicholls, Maria Penna and Alexa Segal, who have assisted in the preparation of this chapter.
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