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ARTICLE · 02 NOVEMBER 2009

Define Critical Terms Or Have The Court Define Them For You

Norton Rose Fulbright Australia
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Undefined terms in a reinsurance treaty led to a broad interpretation of the words “Trade Credit” that resulted in the reinsurer, General Reinsurance Australia Ltd (Gen Re) being liable for its share of a claim that it maintained was not intended to be covered by the treaty.

AustraliaInsurance
Susannah Mitton
Susannah Mitton
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Undefined terms in a reinsurance treaty led to a broad interpretation of the words "Trade Credit" that resulted in the reinsurer, General Reinsurance Australia Ltd (Gen Re) being liable for its share of a claim that it maintained was not intended to be covered by the treaty.

McDougall J in the NSW Supreme Court had found that Gen Re, as reinsurer, was obliged to pay HIH Casualty & General Insurance Ltd (in Liq) (HIH), the reinsured, sums under a quota share reinsurance treaty in respect of a class of insurance described in the slip as "Trade Credit and Export Credit". The NSW Court of Appeal upheld the primary judge's decision and confirmed that the reinsurance treaty responded to HIH's claims.

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