Reinsurance broker is a person or a company who arrange reinsurance contracts between the direct insurer and the reinsurer in bussiness. He is not contractually linked with only one client. Apart from making transaction, he is engaded in administration, related claims negotiation and collection of these contracts. Depending on his own expertise and knowledge of market opportunity, he advises clients when it comes to choosing superior type of reinsurance programme, appropriate maintenance and acceptable capacity. Thereafter he establishes resultant programme with protected markets at competitive conditions and prices. The activities of the reinsurance broker are different in each country.
Definition of reinsurance
Reinsurance is hard to define. It is a form of insurance. Also described as "insuring insurance". According to dictionary "it is a contract by which an insurer procures a third party to insure it against loss or liability by reason of such original insurance".
There are no particular statutory regulations. Contract between reinsurance and his principal is based on general law of agency. Legal issues regarding to the duty of reinsurance broker:
- authority of the reinsurance broker such as sub-agent, dual agent, ostensible authority
- ability of adaptation reinsurance and matching security
- retraction of claims and storeage documents
- duties relating to "defences wavier, estoppel, ratification, contributory negligence, concurrent liability in tort"
Functions and duties of the reinsurance broker
Functions before and at the time of signing of a contract: placing the risk, choosing the reinsurer, having all information about contract. Functions during the term of the contract: consulting and advising, drafting new contracts, contract management, collecting payments and accounting, controlling of claims. Functions after and in the end of the contract: compliting liabilities, closing claims. Safeguarding of the interest: being on time, following clients interests, binding authority.
- Schwepcke A. (2004), p.92
- Wang W. (2003), p.81
- Carter R.L. (2013), p.49
- Wang W. (2003), p.81
- Wang W. (2003), p.1
- Marcinko D. (2006), p.250
- Wang W. (2003), p.82
- Schwepcke A. (2004), p.93-94
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Author: Weronika Lisik