Reinsurance settlements and Lumbermens retreat

CHRISTOPHER FOSTER (pictured) and SUZAN KURDI, of Herbert Smith, consider the impact of court decisions on Lumbermens

LORD Mustill once observed that, when considering the reinsured’s entitlement to recover loss settlements from its reinsurers "there are only two rules, both obvious. First, that the reinsurer cannot be held liable unless the loss falls within the cover of the policy reinsured and is within the cover created by the reinsurance. Second, that the parties are free to agree on ways of proving whether these requirements are satisfied".