Lloyd's Endorses New Reinsurance Dispute Resolution Protocol (Insurance Journal)
January 3, 2007January 3, 2007
Lloyd's has endorsed a new International Reinsurance Industry Dispute Resolution Protocol, which it notes "provides the insurance industry with an alternative to a court case or a lengthy arbitration if a disagreement should arise between reinsurer and client."
In a bulletin on its web site (www.lloyds.com) Lloyd's characterized the new facility as "effectively a 'statement of intent' designed to be included in agreements up front outlining a clear set of procedures to be followed in the event of a dispute." It was developed by the International Institute for Conflict Prevention and Resolution (CPR - http://www.cpradr.org), working with insurance companies and Lloyd's.
"This protocol is a major step forward to complement and support the need for rigorous dispute management clauses to be incorporated within reinsurance agreements," noted Paul Moss, Head of Claims at QBE and one of the architects of the protocol. "There is an increasing desire for companies and their reinsurers to seek ways to avoid unnecessary delays, financial burdens, animosity and uncertainties of arbitration outcomes in disputes. The costs of resolving disputes in the reinsurance market are getting ever more expensive in terms of direct costs, management time and in extreme cases reputation issues."
The protocol, which is available at: www.InsuranceMediation.org, was developed in consultations "with representatives of leading companies and law firms in the London and American insurance markets, " said Lloyd's; "It is offered as a statement of 'best practices' to encourage the early and efficient resolution of disputes between reinsurers and reinsureds."
The CPR gave the following examples of the ways it could be used:
-- Insurers may wish to refer to it or incorporate it in their treaties and agreements.Download a PDF of this Article here
-- Insurers may wish to adopt it on a unilateral basis, as a statement of their own policies and procedures.
-- Parties to particular disputes may wish to adopt the protocol as a means of managing information exchange. Alternatively, the protocol may be modified by parties to meet the challenges of a specific matter.
-- Groups of insurers, trade associations and others may wish to use the protocol as a basis for broader discussion of best practices in the field.
Download the Protocol here