London Marine Market Cargo Underwriters issued a slip policy to the applicant bank in 2015, which most of them renewed in 2016. The police insured cocoa-containing products, which the bank financed for selected commodity trading clients and which it temporarily took possession of in so-called “repo” transactions. It was based on conventional maritime terms “all hazards”, including the Institute`s “A” cargo clauses. The policyholders considered that (except for the usual and limited additions without damage) the insurance coverage was limited to the risk of physical loss and damage and did not extend to trade credit risks in the event of default by the customer. However, at the request of the bank, an unusual clause (the transaction premium clause or “TPC”) was added by mutual agreement in a medium-term endorsement of the 2015 policy, extending coverage to these default risks (non-loss). TPC was also included in the 2016 Directive on Renewal Slips. (i) there is uncertainty where all conditions have not been clearly agreed between the insurer and the insured before the start of coverage; and In the current global environment, the complexity of global international trade is increasing; This is becoming more and more uncertain and ambiguity is now a fact of life. Therefore, contract security and compliance are two key issues for businesses when it comes to global insurance programs. The first formal MRG measurement in March 2006 showed that 65% of contracts concluded in December 2005 were secure, compared to 30% for needs.

MRG`s targets are 75% by the end of September 2006 and 85% by the end of 2006. The Non-Subscription Market Working Group agreed to be in full compliance with its Code by December 2006. “The insurer and broker (if applicable) must ensure that all conditions are clear and unambiguous at the time of the offer to enter into the contract or accept the offer. All concepts must be clearly expressed, including conditions or subjectivities. The judgment provides a very useful overview of the now well-established “unitary” approach adopted by the Court of Justice for the interpretation of treaties and reminds us of the primacy of language, i.e. it is the very words chosen and recorded by the parties in their agreement that generally carry the most weight in interpretation. That is the case, in particular, where, as in the present case, the clause (TPC) at issue had been `carefully drafted` by the insured and his external lawyers. The judgment also reminds us that it is not for the Court to exempt a party from the consequences of an imprudent agreement.

The events of “9/11” have shaken conventional thinking about insurance in many ways. A delicate debate revolved around what cover was provided for the Twin Towers at the time of the attack. As of 11 September, no final wording had been agreed, there were only fixed-term contracts from insurers that undertook to offer insurance. After the Trade Center collapse, tenant Larry Silverstein claimed there were two events based on the two plane strikes, while insurers and reinsurers argued there was one event based on a single coordinated terrorist attack. From this febrile atmosphere was born a call from the insurance market for more contractual security. Thus began the clarity campaign, led by the FSA. However, in a setback for X, the judge was not convinced that, after weighing the probabilities, X could prove the necessary ingredient that he had been “induced” by this false statement to subscribe to the 2016 policy: on the basis of the evidence, he found that it was more likely than not that X would still have entered the same conditions, if the statement had not been made: All of the evidence indicated that the underwriter of X had read the policy, was satisfied with what was available, and was happy to renew the risk based on the good experience with losses. It also means relying on each country to comply with agreed terms and relying on it to issue policies and collect payments on time. And access to accurate and timely information is often limited, while the information obtained can be inconsistent in terms of quality and depth.

It is only in the event of loss that the wording of a contract is analyzed. Contractual certainty is achieved when the parties agree on the wording before formally committing to the contract. However, there are still cases of contract interpretation. How do the courts interpret the terms of the policy? One gets the impression that the courts interpret contracts literally and rack their brains on every detail. While clear wording is always essential, it does not accurately reflect their approach. There is a big difference between the claims settlement and claims cooperation clauses. Claims settlement refers to situations where control still rests with the assignor, while claims settlement is the reinsurer when the reinsurer assumes the loss. When it comes to claims, the responsibilities and rights of each party must be clearly defined in the contract.

The fate of two subsequent subscribers (to simplify “X” and “Y”) can be compared. With respect to X, the judge found that Edge`s “expiring” insurance would reasonably have been interpreted as suggesting that there had been no material changes to the Directive as it was last presented to X, i.e. the Directive as drafted in early 2015 (prior to approval). He stated that the broker`s statement about “everything else as before” in context would not reasonably be understood to refer to the 2015 contract, which was then amended by a confirmation that had never been made available to the next market. Thus, a lack of contractual security can lead to situations where policyholders do not know what coverage they have actually received and may assume that they are covered for certain risks, although this is not the case under the terms of the final contract. A lack of contractual security can also result in policyholders having broader coverage than they identified, necessary or desired. In such situations, policyholders and insurers assume unforeseen risks and costs. Generally speaking, the changes require the following attributes in any commercial insurance contract entered into in the London market: Insurers and manufacturers operating in New York State should develop and implement practices no later than twelve months after the date of this circular to ensure that insurance documents are provided to the insured in advance. at the time of incorporation or immediately thereafter. The ministry will review industry progress on contract security through the review process, applications to licensees, or information received from policyholders or other parties affected by transactions. The market identified the gap in the standards of practice for commercial insurance coverage, defined the “contractual guarantee”2 and stated: “The contractual guarantee is obtained by the full and final agreement of all terms and conditions between the insured and the insurers prior to the commencement of the contract.” 3 The principles and practices established by insurers to ensure contractual certainty must comply with any applicable legal or regulatory provisions governing the content, timing or delivery of insurance policies. The department also expects the New York industry to adhere to a set of principles and practices based on increasing contract security.

Therefore, all terms and conditions of a policy must be completed and completed, commemorated, executed and made available to the insured before, at the time or immediately after incorporation. For the purposes of this circular, the term “promptly” should generally be interpreted to mean within thirty (30) days, and any renewal beyond this period should be carefully documented by insurers. Licensees should apply for contractual coverage in at least ninety (90) percent of policies that are not already subject to a more stringent requirement, such as policy forms, that must be approved under the New York Insurance Act and its regulations. In 2004, in view of the potentially adverse effects that may result from contractual uncertainty, the United Kingdom`s Financial Services Authority (“FSA”) required industry in the London market to provide more certainty at the outset of the contract and to provide full documentation of the guidelines immediately thereafter. The London market has had two years to offer this solution. The Department is encouraged to understand that significant progress has been made on FSA policy. In resolving the issue of the World Trade Center, the Ministry of Insurance realized that various widespread practices led to transactions, the essential terms of which can only be determined by reference to external evidence of the circumstances relating to the negotiations and drafting of the agreement and to correspondence related to the negotiations and drafting of the agreement. The fact that key questions remain open and can make contracts uncertain for months after they start is unjustified. While it is possible to use a patchwork of locally traded and issued policies, it creates the complex task of trying to manage a variety of contracts and trying to understand local market coverages, regulations, and practices. Obtaining separate local coverage in various local countries also involves engagement, communication, and collaboration with multiple insurance companies. Not only is this task time-consuming, but it also carries the possibility of significant gaps in coverage, which could ultimately result in inadequate insurance for businesses in the event of a claim.