Page 70 - Reinsurance Management IC85
P. 70
Reinsurance Management
insurance contract between the direct insurer and
his insured. The original insured is not a party to
the reinsurance contract and hence has no rights
against reinsurers. This principle was stated clearly
by Scrutton L.J. in Versicherungs And Transport
A.G. Daugava Vs. Henderson - "There is no
privity between the original insured and the
reinsurer".
In fact, this principle serves as one way of
distinguishing reinsurance contracts (Lord Alkin in
English Insurance Co. Ltd. Vs. National Benefit
Assurance Co. (1929)
b. Sometimes, "Cut-Through Clauses" are
incorporated, which stipulate mat the reinsurer will
pay amounts directly to policy holders in certain
circumstances. This modifies the principle of Mack
of privity' as stated by Scrutton L.J. and hence,
may not be enforceable under English Law.
However, a U.S. court in Bruckner - Mitchell
Insurance Co. Vs. Sun Indemnity Co. of New
Sashi Publications - www.sashipublications.com 69
ight@ The Insurance Times. 09883398055 / 0988338
