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APRIL 2017

T.S. Eliot’s comment notwithstanding, April is a pretty great month.   A new season of baseball is just underway, The Masters reminds us once again that perfection is possible and my daffodils are just starting to bloom.

Things are not as cheery across the pond.  Just as the shock of Brexit was starting to wear off, Lloyd’s announced a new policy banning employees from drinking during office hours. Brokers reportedly have nothing to fear, as the new restrictions apply only to back office workers who are directly employed by Lloyd’s, but is it any wonder that many in the City are looking to relocate to Dublin and or the Continent? A new survey by Intelligent Insurer reports that 32 percent of survey respondents indicate a preference for relocating operations from London to Dublin to maintain access to the EU.  Germany was the runner-up with 13 percent of the votes.  The survey did not comment on the fact that very good beer is brewed in Ireland and Germany.

Speaking of the U.K., the Court of Appeal has ruled in W.R. Berkley Insurance (Europe) Limited v Teal Assurance Company Limited (2017) that the payment of monies into an escrow account is not an insured “loss” for purposes of liability insurance.  Writing for the court, Sir Stephen Tomlinson opined that payments into an escrow fund that had been created for the purpose of later issuing payments to injured parties did not trigger coverage because “[t]here was no ascertainment of the insured’s liability, whether as to its minimum or as to its entirety, and thus no ascertained loss.”Steve Catlin, who founded Catlin Underwriting Agencies in 1984, has announced plans to retire at the end of 2017.  Catlin will continue to act as a consultant to XL Group until September 30, 2018.

Meanwhile, on this side of the Atlantic, a federal judge in Manhattan has issued a new opinion that’s making waves in reinsurance and arbitration circles.   The issue in Certain Underwriting Members at Lloyd’s, London Subscribing to Treaty No. 272/04 v. Insurance of the Americas, NO. 16-374 (S.D.N.Y. Mar. 31, 2017) was whether an arbitration panel’s award against a reinsurer should be set aside owing to the failure of a party-appointed arbitrator (Alex Campos) to disclose personal and business relationships with the cedent.   While acknowledging that an arbitrator’s failure to disclose a relationship is not an automatic basis for vacating an award, Judge Broderick  found good grounds for “evident partiality” in this case given the extensive business ties between Campos and ICA and its principals as well as the odd behavior of Campos in pretending not to know ICA’s Treasurer when he testified at the hearing (despite the fact that Campos had hired him only a few months earlier to be the CFO for one of his companies).   The court was unmoved by ICA’s argument that party-appointed arbitrators need only be “disinterested” and that the rule allowing some ex parte communications showed that the standards of partiality were more relaxed in the context of “tripartite industry organizations.”

Section members who made it to Charleston last month were treated to a great meeting, including a very interesting panel that we co-sponsored with the Property and Energy Sections on the economic, legal and insurance coverage aspects of attacks on our nation’s energy infrastructure.  The good news is that it’s a lot harder to shut down the grid than you might think as you not only have to know how to hack into a utility’s computer but also how to then manipulate the intricate elements of SCADA and energy distribution systems.  The bad news is that people are already trying and, like other kinds of cyber-attacks, it’s just a matter of time.

Our next meeting will be in Montreux, Switzerland at the end of July.  Our Section is co-sponsoring a program with Extra-Contractual entitled “Can we Talk? The importance of Communication when Dealing with Excess and Reinsurers"  We’ll be examining reporting duties and waiver problems among different levels of insurance and reinsurance.  The panel will also examine some of the ways in which insurance arbitrations in the EU and UK are different from U.S. practices.  If you are planning to attend the Switzerland and have an interest in speaking, please contact me immediately.

That’s all for now.  Go Red Sox!

Michael Aylward, Section Chair
Reinsurance, Excess and Surplus Lines Section

 

           

 

 

 


more Calendar

7/24/2017 » 7/29/2017
2017 FDCC Annual Meeting/ Bridging The Gap Insurance Summit

9/17/2017 » 9/19/2017
Corporate Counsel Symposium

10/23/2017 » 10/24/2017
2017 Fall Deposition Boot Camp

11/9/2017 » 11/10/2017
I3 Registration

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Marjorie J. BergerMarjorie is with American Nuclear Insurers in CT
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