[1997] L.R.L.R. 65; (1997) 6 Re LR 157

Jonathan Gaisman QC – Reinsurance – Excess of loss – Insurance brokers – Authority – Winding up of reinsured – Refusal by provisional liquidator to pay excess of loss reinsurance premiums – Operation of London market settlement procedures automatically debiting brokers account in respect of premiums due under contracts – Reinsurers persuaded by broker to cancel contracts and reverse entry of premiums – Scope of brokers authority – Whether appointment of provisional liquidator automatically revoked authority of broker – Whether payments made by broker to reinsurers by way of settlement in account through London market systems were payments of premium made with authority of reinsured – Whether market rules rendered broker personally liable for premium, either in conjunction with, or in place of, reinsured – Whether, if payment was made purportedly on behalf of reinsured, it was open to broker and reinsurers to rescind it at any time before it was ratified by reinsured – Whether cancellation of reinsurance contracts justified where reinsured repudiated contracts by evincing intention not to pay premium