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'Follow the Settlements' Doctrine: Implications on a Reinsured's Allocation and Aggregation of Losses
The applicability of the bedrock reinsurance principle of “follow the settlements” is at the core of an increasing number of recent reinsurance disputes concerning whether a reinsurer must follow the manner its reinsureds allocate and aggregate underlying losses. Over the last 5 years, a number of courts have addressed whether the doctrine of “follow the settlements” precludes a reinsurer from second-guessing its reinsured's determination of how it allocated and/or aggregated losses in resolving disputes with the underlying insured. As discussed more fully below, reinsureds typically argue that under the “follow the settlements” doctrine, a reinsurer must defer to the allocation and aggregation decisions of its reinsured, provided those decisions are made in good faith. Reinsurers on the other hand, typically argue that “follow the settlements” is not unlimited, but that the reinsured's decisions must be consistent with the language of the reinsurance agreement.
Commercial insurers are regularly faced with losses that occur over time, and implicate multiple policy periods and multiple insured locations as commonly seen in pollution claims. In resolving these types of losses, the insured and insurer typically reach agreement about how to allocate such losses to the policies, and specifically, how such losses erode the insured's policy limits, or implicate the insured's deductible, retention or retrospective premium, as the case may be. Such matters, moreover, are important to the insurer's ability to collect reinsurance proceeds, as the manner in which the underlying settlement is allocated can dictate the specific reinsurance policies that are applicable and the retention that applies to any reinsurance proceeds.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
How AI Has Affected PR
When we consider how the use of AI affects legal PR and communications, we have to look at it as an industrywide global phenomenon. A recent online conference provided an overview of the latest AI trends in public relations, and specifically, the impact of AI on communications. Here are some of the key points and takeaways from several of the speakers, who provided current best practices, tips, concerns and case studies.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.