Reinsurance - “As original” and the conflict of laws

(Groupama Navigation et Transports Continent SA v Catatambo Ca Seguros, forthcoming in [2000] Lloyd’s Rep IR)

The practice of the London reinsurance market in relation to the placement of facultative cover is to issue a slip policy which contains the minimum of specific reinsuring provisions (eg, claims control or co-operation provisions) and to which is appended the direct policy. The cover is then made “back-to-back” by the use of words “as original” or their equivalent. The recent cases on incorporation have made it clear that the purpose and effect of those words is to impose liability upon the reinsurers in the same circumstances as liability would be imposed upon the reinsured, but normally to exclude those provisions of the direct policy which are inappropriate or repugnant to the reinsurance (eg, arbitration, choice of law and notice of loss provisions). The extent to which words of incorporation achieve back to back cover was considered by Mr Justice David Steel in Groupama Navigation et Transports Continent SA v Catatambo Ca Seguros, forthcoming in [2000] Lloyd’s Rep IR.