Page 249 - Reinsurance Management IC85

Reinsurance Management

Q.3) a) Explain the need for an Arbitration
clause in Reinusurance contract Briefly
outline the procedures .

b) German Commercial Law states that
"Reinsurance is the insurance of the
risk assumed by the insurer"- Discuss
the role of Reinsurance in modem
global economy faced with. complex
nature of risk demanding special types
of covers.

Ans: a) This clause is found in all reinsurance agreements
and shows the intentions of the parties to resolve
disputes as to the interpretation of the agreement
or the rights with respect to any transaction
involved hether before or after termination of the
agreement by arbitration rather than resorting to
direct court action. This is primarily because of
the fact that arbitrators as selected would be
insurance professionals and understand the issues
in dispute better given the background of their
local and practical experience.

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