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Follow the Settlements and Follow the Fortunes – AIDA Rome 2014

Follow the Settlements and Follow the Fortunes – AIDA Rome 2014. Danish, Swedish & Norwegian Law. Niels Schiersing, FCIArb , HORTEN. Reinsurance not governed by the Insurance Acts in DK, N and S

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Follow the Settlements and Follow the Fortunes – AIDA Rome 2014

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  1. Follow the Settlements and Follow the Fortunes – AIDA Rome 2014 Danish, Swedish & NorwegianLaw Niels Schiersing, FCIArb, HORTEN

  2. Reinsurance not governed by the Insurance Acts in DK, N and S Some principles mayapply by analogy (not the provisions whicharedimplemented to protect the insured) The permissibleextent of construction by analogy is not welldefined (to say the least) • Danish, Norwegian & Swedish law: The basic rules

  3. Customs and usages on the relevant international marketsareimportantwhenconstructing the reinsurancecontract: No case law in DK and S but in N: Gjensidige v Continental Insurance and others (unpublished): ”This indicatesthat a literalconstructionbeappliedalso under Norwegianlaw …” ND-1995-447: ”The insurance policy is developed by brokers at the insurancemarket in London … Norwegianpractice must beconsidered to comply with English practice in thisregard” (Direct insurance) • Danish, Norwegian & Swedish law: • Construction of reinsurance contracts

  4. Cedant and Reinsurerarefree to agreethat the Reinsurershallbebound by a settlement, an award or a judgmentbetween the Insured and the Cedant ”Follow the Fortunes” clauses (US) ”Follow the Settlements” clauses (UK) • Danish, (Swedish and Norwegian) law: Contracting

  5. Danish case law: U1996.906 SC & U 1999.429 SC (Co-assurance) Case concerningdefective windturbines: The leadcoulddecide and the otherinsurersobliged to follow (1996) The principle did not apply to payments made to owners of non-insured windturbines (1999) Not Ex Gratiapayments … • Danish Case Law: Boundby Contract?

  6. U1912.239 SC & U 1922.186 AC (Retrocession) By implication, the retrocessionaireobliged to follow the decisions by the reinsurer … The retrocedantwasconsidered to have acted ”prudently and in the interest of all involvedinsurers/reinsurers must, accordingly, bebound by this decision …” Business Efficacy and Good Faith? RelationalContracts? • Danish Case Law: Bound by Implication?

  7. U 2006.2421 SC (Reinsurance) Cedant: The principle of ”Follow the Fortunes” appliesReinsurer: An implied obligation to ”follow the fortunes” apply in treatyreinsurance AC: ”The claimant (cedant) has not establishedthat the respondent (reinsurers) as facultativereinsurers has committeditself to let the cedants decision on the matter of insurancecoverage vis-a-vis the insuredbe binding on (the reinsurer)” SC: Did not opine on the matter E contrario: Business Efficacy and Good Faith in Treaty Reinsurance? Good Faith, Business Efficacy and RelationalContracts … • Danish Case Law: Boundby Implication?

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