The following Insurance & Reinsurance practice note provides comprehensive and up to date legal information covering:
This Practice Note provides a high level introduction to the role of reinsurance brokers when placing reinsurance that is intended to be ‘back-to-back’ with the underlying policy. It provides guidance as to how the duties owed by reinsurance brokers differ from brokers only placing direct insurance. It provides information and guidance on the potential conflicts of interest involved in placing back-to-back reinsurance and on risks and common mistakes that may result in claims against brokers acting in a dual capacity. This Practice Note also provides practical guidance as to how brokers may prevent or mitigate negligence claims against them and provides links to related content.
The term ‘direct’ is used in the context of insurance and reinsurance placements to refer to the insurance of the original policyholder as opposed to reinsurances of the risk. The term ‘direct’ should not be confused with ‘primary’, which refers to the first layer of a non-proportional insurance or reinsurance programme. For more information on the different forms of reinsurance and on reinsurance terminology, see Practice Note: Forms of reinsurance and terminology—Facultative reinsurance and treaty reinsurance.
For information regarding the role and duties of direct insurance brokers, see Practice Note: The functions and duties of insurance brokers—policy placement.
For information and guidance on the regulation of insurance and reinsurance distribution, see Practice Notes:
FCA Handbook—introduction for the insurance and reinsurance sector
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Statutory declaration of solvencyA company enters voluntary liquidation when the members of the company vote to do so by a special resolution. For more information, see Practice Note: What is a members' voluntary liquidation (MVL) and where/when is it typically used?Before the members can vote on a
When restructuring is considered rather than formal insolvency proceedings (see Practice Note: Benefits of restructuring over formal proceedings) the company may want to ensure that relevant creditors quickly enter a standstill agreement to gain some breathing space to consider a restructuring
An intention to create legal relations is requiredThere are various situations in which a court will hold that an agreement is not binding because, though supported by consideration, it was made without any intention of creating legal relations (see, eg, Blue v Ashley).Did the parties intend to
Source of the doctrine of the separation of powersThe origins of the doctrine are often traced to John Locke’s Second Treatise of Government (1689), in which he identified the 'executive' and 'legislative' powers as needing to be separate.‘… it may be too great a temptation to human frailty, apt to
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