InSolutions, the London arm of Marsh Mass Tort, was approached in late 2006 by a major east coast insurer concerning one of their stable of commercial carriers, who was heavily exposed to a class action dating back to the early 1950s. They had written the primary coverage for the entity and then purchased London market reinsurance underwritten 100% by Lloyd’s. These placements were via a binding authority issued by Lloyd’s to a US surplus lines broker.
The potential liability for the carrier ran into the hundreds of millions of dollars. They had approached Equitas (now Resolute) the pre 1992 legacy Lloyd’s insurer and had been informed the binding authority that they had two certificates for never wrote reinsurance. The other problem the company faced was that they only had evidence of three years of coverage.
The InSolutions offering
InSolutions was able to identify the binding authority as being placed by one of the London brokers that Marsh now own. By analysing the manual records, InSolutions identified additional supporting material for the client within the 80 plus miles of filing stored at the Marsh Norwich UK archive facility. We were able to expand the period of coverage from three to fourteen years.
The data located included:
- The market slips showing the Lloyd’s syndicates for the years the client purchased reinsurance
- A number of premium transfer slips showing that Lloyd’s received the premium
- Placing ledger books showing the certificates issued by the US broker
- Correspondence files relating to the placement of the binding authority in which reinsurance
- placements were discussed and the leading underwriter agreed a memorandum on their handling
- Evidence in the correspondence of an early 1960’s claim relating to the reinsurance placed on behalf of our client.
Using our network of connections, we were also able to locate a senior retired broking director from the London broker in question. They were able to assist the client in their review of the evidence and explain how the binder was placed.
Due to the additional data supplied, the London market has now accepted the binder wrote facultative reinsurance and agreed to open negotiations on a settlement with the US carrier and their external counsel.
InSolutions continues to support the carrier and their counsel as specialists in London legacy insurance records, market practice and expert location.