Reinsurance

Back to back cover

It is settled law that, as far as proportional reinsurance is concerned, there is a presumption of back to back cover, so that the risks accepted by the reinsured are matched – subject to any financial limits – by the cover provided by the reinsurer. The point may arise in a number of contexts, but perhaps the most important is as an aid to the construction of the reinsurance agreement. The limits of the presumption of back to back cover, along with other key issues concerning the creation of warranties and the liability of brokers, were explored by Langley J in GE Reinsurance Corporation v New Hampshire Insurance Co [2003] EWHC 302 (Comm), forthcoming in [2003] Lloyd’s Rep IR.