ARTICLE · 02 APRIL 2008

Additional Conditions & Follow Settlement Provisions

DLA Piper Australia

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In the recent UK decision of Aegis Electrical & Gas v Continental Casualty [2007] EWHC 1762, the Commercial Court considered how the reference to underlying policy terms in a reinsurance slip affects the scope of reinsurance cover, and whether follow the settlement provisions bind a reinsurer to a settlement where the cover is not back-to-back.

AustraliaInsurance

David Speiser

In the recent UK decision of Aegis Electrical & Gas v Continental Casualty [2007] EWHC 1762, the Commercial Court considered how the reference to underlying policy terms in a reinsurance slip affects the scope of reinsurance cover, and whether follow the settlement provisions bind a reinsurer to a settlement where the cover is not back-to-back.

Facts

The reinsured (the Syndicate), sought to recover from the defendant reinsurer, Continental Casualty Company (CCC), for settled claims arising from incidents at an oil refinery in the South Caribbean. The incidents involved damage to certain components of the insured's (Aegis) oil refinery including the 'Visbreaker unit' and the 'D1A reactor'.

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