Claims Control Clauses (CCCs) with multiple
reinsurers who don't speak with one voice can leave the
reinsured little option but to put itself in breach with some
reinsurers, jeopardising part of its security. A recent
decision1 about a London market reinsurance of a Kuwaiti
policy has been portrayed as allowing reinsureds in this
predicament freedom to refuse control with
impunity. For the following reasons, reinsurers should not allow it
to influence their claims practices.
Which negotiations must a reinsurer be allowed to
control?
The CCC required that each reinsurer control negotiations
"in connection with . . . loss or losses . .
. which may give rise to a claim" against it. All
reinsurers bar one wished the reinsured to raise an exclusion-based
defence to a claim for costs of repair of a storage tank. One
reinsurer and the reinsured wanted the claim to be part-paid, to be
funded between them according to their respective interests (the
reinsured had a
