This briefing note reviews the House of Lords decision in Wasa v Lexington, in which the the reinsurers' appeal was allowed. In a decision likely to be welcomed by London market reinsurers, the Lords held that although the the normal commercial purpose of proportional facultative reinsurance policies is to provide "back to back" cover with the direct policy, where the contracts are governed by different laws, it remains a question of construction of both contracts as to what risk is assumed.

Authored by Joanne Jolly and Tracey Anderson of the London office of Barlow Lyde & Gilbert, the full article can be downloaded by clicking this link.

The credit market crisis will shift the balance of power within the finance industry towards insurers and away from banks, the Chief Executive of the world's biggest reinsurer Munich Re said.

German insurers are also unlikely to make use of the 500 billion-euro ($683 billion) rescue package for the financial sector expected to be adopted by parliament this week, Nikolaus von Bomhard told the Hamburg business journalists' club late on Tuesday.

"We ourselves will have nothing to do with it, from today's point of view," von Bomhard said.

Fellow reinsurer Hannover Re has also said it does not plan to make use of the package, while Europe's biggest insurer Allianz says it is well capitalised and has "no direct need" to use the fund.

William Katt, an Associate with the law firm of Foley & Lardner LLP, has written a brief overview of what can be expected in the upcoming United States v. Ferguson trial. His assessment of the trial is that it “will be the most prominent example to date of the skeptical eye government regulators at the federal and state levels have cast toward some kinds of finite reinsurance transactions in the last few years.” To view the full article, please click on this link.