Services Inspection of Records

Historical Inspections of Records 

The need to understand the reason(s) why a reinsurance treaty has deteriorated beyond reasonable expectations continues to demand expert and objective study, often by means of an inspection of records. Documentary support for amounts claimed provided to reinsurers participating in treaties experiencing severe technical losses continues to be relatively minimal and frequently does not address core issues that may be causative of, or contributing factors in, the adverse development (both actual and potential). Payment of significant amounts are often sought with the flimsiest of justification. The inspection of records enables reinsurers to obtain a fully informed perspective on the portfolio (and its administration) that they are protecting and satisfy themselves that the amounts claimed are properly due. This contractual provision thus remains a cornerstone of reinsurers’ rights and a tool to ensure that utmost good faith and best practice have been observed.

With our 25-year track record of professional expertise, Chiltington is well-qualified to conduct historical inspections of records. We have conducted inspections of treaty and facultative casualty and property excess of loss and pro rata reinsurance agreements, covering all classes of business, including latent injury exposures such as asbestos and hazard waste claims, as well as workers’ compensation, accident and health, professional liability, and property catastrophe claims. A speedy and effective response to clients’ requirements is thereby assured. Inspections need to be properly planned and structured to reflect clients' objectives. Full planning and accommodation of these objectives will allow for a cost effective and expeditious gathering of facts, thus providing the added value which characterizes the provision of all Chiltington's services. At Chiltington, we have adopted a phased approach to such projects, thereby maximizing the control of costs and maintaining a focus on clients' objectives and concerns.

Phase 1 involves:

• Preliminary research of client's underwriting (and other) records in order to identify key areas of research and hence the scope of the inspection. A brief report may be prepared, as required.
• Dialogue with the client and/or its legal advisors to coordinate the objectives, the work to be undertaken, a budget for the project, and the type of report required.
• Initial planning of the inspection, i.e. corresponding with the cedent and obtaining summary records to select documents for review during the inspection itself.  

Phase 2 involves:

• Performing the inspection at the offices of the cedent; and
• Providing a detailed report, including recommendations and strategic advice for future courses of action.

Phase 3

Chiltington differentiates itself from its competitors through the provision of continuous, comprehensive and pro-active support to its client, following the submission of our inspection report. We will, typically, assist the client in the first instance to raise issues of concern emerging from the inspection with the cedent either through correspondence or in a follow-up meeting. Responses to the issues raised will be analyzed and a view provided as to the merits and the strengths or weaknesses of the client's position. While always subject to the client's wishes, Chiltington's philosophy, where matters of consequence have emerged from the inspection process, is to recommend commercial dialogue with the cedent on a without-prejudice basis to see if the matter can be resolved through negotiation in a manner acceptable to both parties. Chiltington will, if required, conduct the negotiations for the client or assist the client themselves throughout the process. Where a commercial resolution cannot be achieved or if it is the client's desire to pursue their concerns through arbitration or litigation, Chiltington will work with the client's legal advisors to ensure that the legal process is as effective as possible. This makes sure that the issues are thoroughly understood and presented in the clearest possible fashion in pleadings or during the presentation of the case. Litigation support during discovery and expert testimony is also provided to further assist the client's legal advisors and make the handling of the case as cost effective as possible. Ultimately, whether through commercial negotiations or otherwise, our focus is to ensure the best economic solution for our client.