METLIFE INSURANCE LTD V RGA REINSURANCE COMPANY OF AUSTRALIA LTD

[2017] NSWCA 56, New South Wales Court of Appeal Justice of Appeal McColl, Justice of Appeal Leeming and Justice of Appeal Emmett, 28 March 2017

Reinsurance - Group life insurance - Personal injury and accident cover - Trigger date for coverage under the reinsurance - Presumption of back-to-back cover

Under its "Blue Ribbon" policy, MetLife provided total and permanent disablement (TPD) cover to employees of the Sydney police force. The Blue Ribbon policy extended to "Eligible Members", defined as individuals who were at work and performing normal duties on the commencement date of the policy, 1 July 2005. The reinsurers, RGA, entered into a reinsurance treaty with MetLife on 23 June 2003, with a backdated inception date of 5 February 2003. The treaty covered a batch of insurance policies issued by MetLife. The treaty also permitted MetLife to apply to RGA for cover for any new policies entered into after the inception date. Following the making of the Blue Ribbon policy, in December 2006 MetLife and RGA agreed "Addendum Number Four" to the reinsurance treaty. The Addendum contained the following clause: "For a claim to be eligible for consideration under the reinsurance arrangement the initial event leading to or contributing to that claim must occur after the date of effect of the treaty", that date being agreed for the purposes of the hearing as 1 July 2005. The question in the present case, based upon two test cases, was how the clause applied to a case where a police officer exposed to a traumatic event before 1 July 2005 suffered psychological injury as a result of that event after 1 July 2005.