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Privilege in the Cedent-Reinsurer Relationship
The relationship between an insurance carrier and its reinsurer has regularly been described as one based on the principle of uberrima fides, or utmost good faith. Under this doctrine, the reinsurer and the reinsured are “partners” who owe each other candor in the assessment and payment of claims. Courts have recognized that, due to the cedent's front-line role in receiving, analyzing and responding to direct claims from its insureds, reinsurers rely heavily on the cedent's judgment in determining coverage for a given claim, and that the cedent must exercise that judgment in good faith. Utmost good faith also imposes obligations on the reinsurer, requiring the reinsurer “to indemnify its cedent for losses that are even arguably within the scope of the coverage reinsured, and not to refuse to pay merely because there may be another reasonable interpretation of the parties' obligations under which the reinsurer could avoid payment.” Commercial Union Ins. Co. v. Seven Provinces Ins. Co., 217 F.3d 33, 43 (1st Cir. 2000). It is from this doctrine that the principles of follow-the-fortunes and follow-the-settlements arise, where a reinsurer is ordinarily prevented from second-guessing the claim determinations of its cedent, subject to certain exceptions.
The duty of utmost good faith is essential to the industry inasmuch as reinsurers depend on ceding insurers to provide information concerning potential liability on the underlying policies. Reinsurers generally do not duplicate the functions of the ceding insurers, such as evaluating risks and processing claims. Instead, “they rely on their common interests with the ceding insurers and on an industry custom of utmost good faith, including the sharing of information.” Travelers Indem. Co. v. Scor Reinsurance Co., 62 F.3d 74, 76 (2d Cir. 1995). The sharing of information is often memorialized in a reinsurance agreement's access to records clause, which permits a reinsurer to examine the books and records of the business it reinsures when it deems it appropriate.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Beach Boys Songs Written Decades Ago Triggered Current Quarrel With Lawyers
There's current litigation in the ongoing Beach Boys litigation saga. A lawsuit filed in 2019 against Nevada residents Mike Love and his wife Jacquelyne in the U.S. District Court for the District of Nevada that alleges inaccurate payment by the Loves under the retainer agreement and seeks $84.5 million in damages.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
When Is a Repair Structural or Nonstructural Under a Commercial Lease?
A common question that commercial landlords and tenants face is which of them is responsible for a repair to the subject premises. These disputes often center on whether the repair is "structural" or "nonstructural."