The 15 participating members of the Association of Bermuda Insurers and Reinsurers (ABIR) reported a record high contract certainty rate for insurance contracts at 99.0 percent. The year end 2013 results also showed a strong result for reinsurance contracts at 97.7 percent.
The ABIR explained that the “monitoring of contract certainty results began at the 2008 renewal period with a target of 90 percent compliance against the ABIR Contact Certainty Code of Practice. Since the 2008 trial run contract certainty for both insurance and reinsurance contracts has been annually reported at higher than 95 percent. The six-year average is 96.1 percent for insurance and 95.7 percent for reinsurance.”
Leila Madeiros, Senior Vice President and Deputy Director of ABIR, commented: “We have witnessed high levels of contract certainty compliance since implementing voluntary guidelines in 2008. This demonstrates the ongoing commitment of ABIR’s global insurers and reinsurers to high standards and places the Bermuda market at the forefront of global contract certainty practice.”
The ABIR explained that its Contract Certainty Code of Practice defines contract certainty as “achieved by the full and final agreement of all terms and conditions between the (re)insurer and (re)insured at the time of binding. This will be evidenced by a binder, cover note or similar which reflects all terms and conditions and which is agreed by the (re)insurer. The final committed capacity must be clearly identified.”
Source: The Association of Bermuda Insurers and Reinsurers (ABIR)