Formation of insurance contracts

Incorporation of terms

Insurance and reinsurance contracts are generally made when the slip is scratched by the underwriter. A policy may or may not be issued thereafter, and it may either confirm or modify the basic agreement in the slip. It is relatively unusual to find that the parties have entered into a binding contract prior to the scratching of the slip, although that possibility was left open by the Court of Appeal in Assicurazioni Generali v Arab Insurance [2003] Lloyd’s Rep IR 131 , discussed in the February 2003 issue of Insurance Law Monthly. In Sun Life Assurance Co of Canada v CX Reinsurance Co Ltd [2003] EWCA Civ 283, forthcoming in [2003] Lloyd’s Rep IR, a differently constituted Court of Appeal found that a binding contract of reinsurance had come into existence even though no slip had been scratched and no formal policy wording had been executed.