IRON TRADES MUTUAL INSURANCE CO LTD AND OTHERS V COMPANHIA DE SEGUROS IMPERIO

(1991) 1 Re LR 213

Queen’s Bench Division Commercial Court

Before Mr Justice Hobhouse

Misrepresentation - Non-disclosure - Quota share treaties - Changed wording of premium clause enabling underwriting agent to increase deductions - Whether brokers’ failure to draw change to attention of reinsurers was lack of good faith - Whether professional underwriter should have appreciated significance of change - Estimate of premium income - Whether notice of provisional cancellation gave rise to further duty of disclosure by reassured - Whether endorsements to treaty gave rise to right of reinsurers to avoid contract.

Reinsurance contract - Treaty - Termination -Whether clear and unequivocal affirmation of contract - Whether express invocation of contractual right to inspect was affirmation of contract - Whether reinsurers’ notice of cancellation under continuing treaty created new obligation on reassured - Whether reinsurers’ affirmation of cover after knowledge of breach waived breach.

Market practice - Fair presentation - Character of treaty - Presence of Japanese companies behind cedant -Materiality of cedant’s retention.