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Table 7.2: Boilerplate clauses
Notice clause Sets out how notice required by the agreement shall be given, i.e. in writing either by fax
or email, and to whom the notice should be sent.
Intermediary clause Identifies, and provides contact details for, any intermediary or broker on the contract.
Importantly, it requires all communications – which, on occasion, is drafted to include
payments – to be transmitted through that broker.
The version used in US business typically provides that payments by the reinsured to
the broker shall be deemed to constitute payment to the reinsurer, whereas payments by
the reinsurer to the broker shall be deemed to constitute payment to the reinsured only
to the extent that such payments are actually received by the reinsured.
Termination of Provides that the reinsured may terminate the role of the intermediary at any time during
intermediary clause the contract by giving written notice. If notice is given, it is usually agreed that brokerage
is deemed earned pro rata up to the date of the notice after which its entitlement ends.
The reinsurer agrees to cooperate in the change of broker.
Confidentiality clause Prohibits the reinsurer from disclosing confidential information to another unless it falls
within prescribed categories, or the parties otherwise agree.
Confidential information has been defined to include all documentation, information and
other data provided by the reinsured to the reinsurer in connection with the placement,
execution or performance of the reinsurance contract. Excluded from this definition
would be information in the public domain or information otherwise known to the
reinsurer before the placement of the reinsurance.
Of course, in the ordinary course of its business, a reinsurer will be required to make
various regulatory and financial returns, and wish to claim in turn on any retrocession. It
is always open for the parties to extend the categories of those to whom information
may be disclosed.
Amendments and States the means by which the parties are entitled to make changes to the contract
alterations clause which, in the example given below, is by correspondence as well as addendum:
This Agreement may, at any time, be altered by mutual consent of the parties,
whether by addendum [that is, Broker’s Slip endorsements] or by
correspondence, and such addendum or correspondence shall be deemed to Reference copy for CII Face to Face Training
form an integral part of this Agreement.
This clause would not assist a party seeking to argue that the contract had been
modified by subsequent verbal agreement.
Severability clause Attempts to ensure that a provision which is found to be invalid, illegal or otherwise
7 unenforceable does not imperil the entire contract.
Chapter Entire agreement clause Limits the parties’ rights and obligations to those set out in the contract and specified

documents alone. The clause helps to dissuade a party from later arguing that the
parties had agreed to other terms that are not explicit, such as oral representations,
emails, memoranda or other documentation.
Non-waiver clause Notes that the failure by one party to insist on the other’s compliance with a particular
provision of the contract does not constitute a waiver (or a giving up) of that right or
remedy.
Several liability clause Explains that a reinsurer’s liability is limited to the extent of its participation. In other
words, liability under the contract is several (or separate) and not joint. So, a reinsurer
has no obligation to pay the share of a defaulting co-reinsurer.
According to the MRC standard, this clause is mandatory for subscription business and
resides in the security details section of the MRC.

Reinforce
Before you move on to examine clauses used only in proportional wordings, make sure that you can summarise the
different clauses that are common to proportional and non-proportional reinsurances.