THE REINSURER’S IMPACT ON THE INSURER’S DECISIONS FOLLOWING THE OCCURRENCE OF THE INSURED EVENT

The function of the reinsurance contract is to provide coverage for excess risk, namely for losses that exceed the insurer’s retention. Following the occurrence of an insured event, the reinsurer indemnifi es the sum defi ned in the reinsurance contract. However, the question arises as to whether the reinsurer may infl uence the settlement of claims submitted by the insured, either through direct control and infl uence over such proceedings, or by having the right to be notifi ed of the claim settlement process. Reinsurance contracts may incorporate clauses that defi ne such rights of the reinsurer. One clause concerns cooperation (Claims Cooperation Clause), while the other addresses control (Claims Control Clause). The claims control clause grants broader authority upon the reinsurer. Practice demonstrates that other simi- lar clauses are also used to specify the reinsurer’s rights. This paper examines both the characteristics of these clauses and the Principles of Reinsurance Contract Law, which specifi cally regulate the relationship between the reinsurer and the insurer (the reinsured) following the occurrence of an insured event.

Keywords: reinsurance, reinsurer, reinsured, risk, retention, insured event, claims cooperation clause, claims control clause.