EXPRESS AND IMPLIED TERMS IN REINSURANCE AGREEMENTS

Express terms

The terms of a reinsurance agreement depend upon its nature. A reinsurance treaty may be a lengthy and complex document or it may be relatively short. It is to a large extent administrative, setting out the method of calculating losses and premiums and the information to be provided by the reinsured to the reinsurers at various times. It will also usually contain some provision authorising the reinsurers to inspect the reinsured’s books and records. A facultative reinsurance agreement made in the London market is likely to be a very short document—often expressed as a “slip policy” (see Chapter 2)—which incorporates at least some of the terms of the direct policy by means of the “full reinsurance” clause (one version of which is “warranted same gross rate, terms and conditions as original and to follow the settlements”), and which lays down terms for the regulation of claims.