Claims Co-operation Clauses ("CCC") aim to provide reinsurers with a greater degree of control in order to manage risks. These clauses can typically require that when the reinsured is in possession of information relating to circumstances that may give rise to a claim, it should notify the reinsurer of this. It is common practice for the CCC to be made a condition precedent to liability, rendering failure to comply within a stated period fatal to a resulting claim.
In Markel Capital Ltd v Gothaer Allgemeine Versicherung AG, Continantale Sachversicherung AG and Bolemers & Partners Ltd [2008] the operation of a CCC in a facultative excess of loss reinsurance contract was considered. The central issue was whether or not knowledge of a relevant circumstance which was held by the general agent for an insurance pool ("VOV") could be imputed to its principals the reinsured and thus trigger the obligation to notify under the CCC.
The slip described the reinsured as "Gothaer and Continentale as per VOV". The crucial point was whether VOV, in their general capacity as agents for the pool, had sufficient wider authority to receive information on the reinsured's behalf.
The court concluded that VOV's knowledge did not matter in relation to the "condition precedent" aspect of the CCC. It was the knowledge of reinsured which was relevant for the purposes of notification under the CCC.
In Markel, on a summary judgment application the court was unwilling to impute knowledge of agents to the reinsured for the purposes of notifications as it did not seem fair and just to do so under the particular circumstances of that case. The question of whether VOV in fact had relevant knowledge, in the capacity of the defendants' agent, may be one which arises at the full trial.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
