Insurance and reinsurance are perceived by the outsider as traditional, not very exciting legal areas.
However, the in-house counsel of an insurance related entity, as well as underwriters and actuaries, know that there are insurance-related products which need imagination, creativity and flexibility for their creation.
Hand in hand with traditional products, there is a growing number of complex, ‘out of the box’ products which in many cases are tailor-made insurances.
Your cutting-edge law firm must understand and put words to ideas of such advanced products and should be able to apply to the new products the insurance law principles developed over the years.
Worldwide pandemics
Coronavirus, which has created havoc and worldwide anxiety due to its mystery and economic consequences, has also created opportunities for new insurance products and an appetite for a business interruption policy to cover the consequences of unpredicted disaster not connected to property loss.
The virus may go away but the appetite will remain. Such a product could be a stand-alone business interruption policy, or an appendix to a new health crisis new product.
Corona and special clinical trials
When this article was written no solution was in place for the coronavirus. However, it was clear that in the foreseeable future there will be new potential answers. In order to speed things up beyond current testing protocol, special insurance will be needed to protect the laboratories and pharmacological companies that will come up with potential solutions.
Solvency and capital adequacy – products
Regulation developed in the past few years aims to increase solvency and capital adequacy of financial institutions, such as insurance companies and banks.
These new regulations enable the creation of new and fascinating insurance products, a result of the creativity of lawyers and actuaries.
The terms LPT Mass Lapse, VIF are not names of diseases, these are new, 21st century insurance products. The names may vary, but the idea is the same. How does insurance help the client to stand up to its capital requirement?
Different products were built up for others types of financial institutions such as banks, investment companies… and others (such as guarantees). Some are traditional, others tailor-made.
The cutting-edge lawyer who knows and understands the insurance market, as well as the capital market and accounting requirements, is the type of lawyer you should retain.
Capital market – insurance products
The importance of the capital market in relation to the development of companies creates transactions which need the assistance of non-traditional insurance products, such as warranty and indemnity policies for mergers and acquisitions. The involvement of an insurance product protects the parties to the contract from misrepresentation or from an unknown factor that may be revealed after the merger. It also protects the seller from future unknown events that may influence the price of the sale.
IPO’s protection
Assisting the IPO or its security underwriter with a special product tailor-made to the type of IPO and its needs, helps in the development of the capital market and requires knowledge of securities law as well as insurance.
Comprehensive coverage for multinational companies
The commercial giants ruling the world would like to have overall control over their tax, legal and insurance coverage. The regulations in each country where they are operating are different.
The role of your lawyer is to find ways to overcome the legal and regulatory impediments, assisting the client to reach its desired insurance structure.
The same creative mind is needed in order to find ways to enable non-admitted insurers to issue special types of insurances to local, important insureds. In addition, law firms should be equipped with the facility to assist the non-admitted insurer to handle claims surveys and other needs.
Environmental risk
The increasing awareness of environmental problems is the basis for a growing demand for insurance solutions. The potential insureds are the creators of these risks, as well as banks who finance the contaminating companies and real estate developers which may encounter contaminated lands.
The standard policy does not always answer to every need. Tailor-made products may be the answer.
Data breach and privacy breach
The fast development of technology, including internet of things, and artificial intelligence brings future benefits as well as future hazards. The ability to use advanced technology to harm, must be foreseen and dealt with together with insurance.
The use of information gathered by various companies creates, among others, problems of breach of privacy. New regulations are imposed forcing companies to handle cyber risks, and to take measures to protect information held by them. The dependency of all fields on computer systems and their exposure to cyber risks is a matter of concern to everybody.
Insurance is one of the tools that can assist in managing and mitigating the risk.
Other areas
Fraud, professional liability, property CAR, life insurance – all these areas will continue to exist. The channels of distributions may change, the wording of the products may vary, but the essence of the insurance will remain.
Your lawyer should be able to deal with these risks.
Who are we?
Levitan, Sharon & Co has the ability to assist its clients – insurers and reinsurers – in developing sophisticated insurance products, advising and building up tailor-made solutions as well as being involved in traditional insurance. We are the cutting-edge insurance and reinsurance law firm.