Intermediaries

Binding authorities

It is now accepted that a binding authority issued to an underwriting agent is a contract which carries additional fiduciary responsibilities, given that the underwriting agent has the power to bind the principal to substantial risks and is otherwise in control of funds belonging to the principal. In R+V Versicherung AG v Risk Insurance and Reinsurance Solutions SA and others [2004] EWHC 2682 (Comm) considered a series of allegations to the effect that there had been a fraudulent conspiracy between an underwriting agent and an underwriting acting for reinsurer, under which significant secret profits would be made by the underwriting agent. Moore-Bick J found that the conspiracy had been proved and that it justified the immediate termination of the agency.