Cross-Border Challenges For Middle East Reinsurance Coverage And Claims Issues – Part 1

Reinsurance arrangements in the Middle East often involve cross-border transactions, with the cedant based locally, and the reinsurer located in one of the traditional reinsurance centres of London, Munich, Zurich or Paris.

This can give rise to challenges when interpreting wordings and handling difficult coverage issues and claims. Although historically, English law has offered a relatively clear and stable basis for determining coverage issues and interpreting wordings, a number of recent English cases have created concerns for both cedants and reinsurers. In the first part of a three-part series of article, we review the basis for the concerns, and specific issues regarding incorporating warranties into reinsurance contracts that are intended to operate on a back to back basis.