Clauses in reinsurance contracts

The paper deals with standard clauses of reinsurance contracts starting from the now archaic clause «pay what you can pay», conceived for single reinsurance. The Author examines the evolution of reinsurance contracts, linked to the spread of mass insurance and the correlated development of reinsurance needs, which led to increasing adoption of proportional and subsequently non-proportional reinsurance treaties. The article presents how the innovative feature of the treaties resides in the reinsurer’s renunciation of risk selection and in the simultaneous activation of reinsurance protections aimed at giving guarantees to the parties. It emphasizes the effects of the fortuitous clause aimed at bringing the developments (fortune) of proportional and non-proportional insurance and reinsurance contracts closer, underlining the common interests. Furthermore, the subsequent conciliation clause favouring the closer alingnment of reinsurance with insurance, also for aspects relating to the burden of proof and the settlement of claims, are discussed. The final paragraph autlines the problem of charging the reinsurer with the reimbursement of legal expenses incurred by the Insurer-Reinsured in opposition to the claims of the Insured in the absence of specific clauses.