Reinsurance - Back to back cover

In July 2000 the Court of Appeal, in a judgment shortly to be reported in Lloyd’s Rep IR, upheld the decision of Mr Justice David Steel in Groupama Navigation et Transports Continent SA v Catatumbo ca Seguros [2000] Lloyd’s Rep IR 434 . In so doing, the Court of Appeal has confirmed that the presumption of back to back cover as between a direct insurance policy and a facultative reinsurance cover is a strong one, and that unless there is clear wording to the contrary the reinsurance will be given the same meaning as the direct policy. In so deciding, the Court of Appeal has extended the law as laid down by the House of Lords in Forsakringsaktieselskapet Vesta v Butcher [1989] 1 Lloyd’s Rep 331 . The case was decided on the basis of agreed facts, which have yet to be tested in a court of law.