Principles of Reinsurance Contract Law Project: enhancing the value of reinsurance cover—viewpoint of an industry practitioner

Abstract

Abstract This short article discusses the benefits of the Principles of Reinsurance Contract Law project (PRICL) from an insurance industry perspective. The scope is fairly limited, in that this article focuses on changes in the regime of remedies available for contractual breach, particularly for pre-contractual non-disclosure, as well describing the underlying legal uncertainty when relying on industry custom as a source of law in reinsurance. In both of these areas, the PRICL stand to bring improvements to the industry, some dimensions of which are discussed in greater detail in this article by first describing a simple framework for value generation of reinsurance, where reduction in operational risks and lighter regime of remedies (proportional to the severity of the breach of duty), particularly in situations of pre-contractual non-disclosure, reduce the risk of reinsurance covers not responding at a time of need. This improves the certainty of cover and, ultimately, the value of reinsurance covers.