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27 CLAIMS ALLOCATION

Reinsurance Practice and the Law

Chapter 27 CLAIMS ALLOCATION GENERAL NATURE OF ALLOCATION DISPUTES 27.1 Disputes regarding allocation have tended to revolve around two main issues: the extent to which a reinsurer can dispute the allocation methodology adopted by a reinsured in relation to settlements of original liabilities; and which policy period or periods must respond to a loss in circumstances where it is difficult to identify exactly when the loss or damage occurred. Issues may also arise as to the correct order in which losses should be presented and, therefore, the layer of coverage to which they should be allocated.

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