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Reinsurance Right-to-Associate and Claim Control Clauses: Effect on Claims Handling, Settlement, and Bad Faith

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Wednesday, July 19, 2023

Recorded event now available

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This CLE webinar will offer insight into the rights of insurers and reinsurers regarding their "right-to-associate" and "claim control" rights and the consequences of invoking them. The panel will discuss what these rights mean, potential bad faith liability that can arise, how reinsurers can waive protections from liability, and strategies for dealing with claimants' counsel seeking discovery of reinsurance details.

Description

Insurers risk impairing their available reinsurance, and claimants risk diminished offers in high-exposure cases, if they do not understand the legal issues that reinsurance contracts present in the claims-resolution process.

The "follow the settlements" doctrine typically requires the reinsurer to cover settlements made by the insurer, a/k/a the "cedent," provided the settlements are not fraudulent, collusive, or made in bad faith. "Right-to-associate" provisions give a reinsurer the right to "consult with and advise the reinsured in its handling of a claim." What information the insurer must provide to its reinsurer(s) and whether it must take the advice is not always clear. If the cedent breaches this clause, it may forfeit its ability to be reinsured.

A "claim control" or "claim cooperation" clause gives the reinsurer either the option or the obligation to exercise actual control over all or a portion of the claim handling process, settlement, or the right or obligation to investigate, adjust, or resolve claims. The more control over an underlying claim that the contract grants to the reinsurer, the more difficult it can be for the insurer to fulfill its many legal duties.

Listen as this panel of reinsurance experts illuminates a complex and little understood area of insurance law and how it affects policyholder recovery as well as the insurer and reinsurer.

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Outline

  1. Essential concepts
  2. Right-to-associate
  3. Claim control
  4. Strategies

Benefits

The panel will review these and other key issues:

  • What are the major reasons for reinsurance and what are the most common types of reinsurance?
  • What role does reinsurance play in climate change losses?
  • Are reinsurance contracts interpreted differently than insurance policies?
  • Why is timely reporting so important to reinsurers?

Faculty

Henlin, Alexander G.
Alexander G. Henlin
Member
Sulloway & Hollis

Mr. Henlin is a member at Sulloway & Hollis and a member of the Executive Committee that guides the firm. ...  |  Read More

Whitney, Robert A.
Robert A. Whitney
Member
Sulloway & Hollis

Mr. Whitney has 25 years of experience in complex insurance coverage, bad faith, reinsurance, regulatory affairs and...  |  Read More

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