GIBRALTAR, 11 December 2008 – Aon Insurance Managers (Gibraltar) Limited recently held its annual "After the Event" (ATE) insurance conference at the Midland Hotel, Manchester, the historic venue where Mssrs Rolls and Royce first met before going on to establish Rolls Royce.
After the success of the inaugural conference in London in 2007 the Aon ATE conference is now regarded as an established fixture for the leading practitioners in the legal expenses industry. Over 100 solicitors and related professionals subscribed to this year’s event.
"After the Event" (ATE) insurance is a relatively new area of insurance that provides insurance cover to pay for legal expenses for a wide range of claims. Since the abolition of legal aid for most claims in the UK, ATE insurance has become essential to allow injured parties access to justice. This becomes relevant where an individual has been the victim of somebody else’s carelessness or negligence and he/she needs to take the offending party to court to get compensation for the injury or damage they have suffered. Currently the majority of Road Traffic Accident and Personal Injury claims are made and funded under a Conditional Fee Agreement (CFA). Conditional Fee Agreements are widely known as ‘no-win-no-fee’ arrangements, in which the solicitor agrees not to receive any payment if they lose the case, but takes a success fee if they win. However if the case is lost the claimant can be ordered by the court to pay the defendant’s costs and the disbursements incurred by their own solicitor. ATE insurance provides insurance cover to protect the claimant against liability to pay these costs if their case is lost.
Gibraltar plays a key role in the provision of ATE insurance with several ATE insurers based in the jurisdiction, two of which, Elite Insurance Company Limited and Mount Grace Insurance Company Limited jointly sponsored the conference with Aon Gibraltar.
Paul Sykes, Managing Director of Aon Insurance Managers (Gibraltar) Ltd, introduced the conference and set out to dispel any misconceptions that Gibraltar has a less stringent regulatory regime than the UK. He called in to question the accuracy of views expressed in the trade press by UK based ATE competitors citing one report that claimed that an insurer in Gibraltar can underwrite with a solvency margin of only 15%. Sykes pointed out that Gibraltar is a jurisdiction within the EU and the minimum margin requirement within the EU is 18% of premiums under the current Solvency 1 regime. “If we are going to debate the issues let's make sure the facts are correct before allowing them to be reported as facts" he said. He pointed out that in respect of EU legislation Gibraltar’s regulator (Financial Services Commission) is required by statute to establish and implement standards and supervisory practices which match those within the United Kingdom. In its 2006 review of Gibraltar the IMF found the standard of compliance with Insurance Core Principles to be amongst the highest ever achieved in any IMF review by any country. As recently as September 2008 the Chairman of Lloyd's of London stated that Gibraltar, along with Zurich, Dublin & Bermuda are “the global insurance centres offering stiff competition to Lloyd's".
The event co-sponsors; Elite Insurance Company Limited and Mount Grace Insurance Company Limited are two of the major providers of ATE insurance in the UK and are both managed by Aon Insurance Managers (Gibraltar) Limited and domiciled in Gibraltar. Jason Smart of Elite and Mike Armstrong of Mount Grace along with other key industry figures Amanda Ashton of Compass Costs Consultants and Susan Dunn of Harbour Litigation Funding spoke at the event.
Jason Smart, explained the huge breadth of issues faced by commercial underwriters, and why it is essential to work in partnership with solicitors and funders, whilst Mike Armstrong illustrated the finer details underwriting complex industrial disease claims.
Amanda Ashton discussed such topics as the reasonableness of premiums in fast track cases following the TAG and Claims Direct test cases which were over 9 years ago noting that the industry was in its infancy at that time so further statistics were now available to support the pricing.
John Rowson, of Aon Gibraltar, introduced the concept of Protected Cell Companies to industry practitioners and traced its development from initial legislation in 1997 to acceptance in over 30 jurisdictions around the world today including Gibraltar. He also discussed various ways in which introducers might use a cell to participate in ATE insurance risks.
During the concluding panel discussion, a lively debate focused on whether ATE insurers should lobby the FSA to carefully consider the unintended consequences of "cooling off" periods in ATE policies. It was noted that in some instances ATE policies have been taken out and the existence of the insurance disclosed to the other party in the litigation as a tactic to influence them to settle the claim following which the policy is surrendered during the cooling off period and no premium is payable. Overall however, there was general consensus and much optimism that ATE insurance would continue to be a necessary element in the access to justice system.
The organisers received very positive feedback about the conference, one delegate commenting that "the diversity of specialists that attend this conference annually make it an invaluable opportunity for the exchange of ideas."
The conference was organised by Aon Insurance Managers (Gibraltar) Ltd and co-sponsored by Mount Grace Insurance Company Limited and Elite Insurance Company Limited.
For more information contact:
+44 (0)20 7086 7201
Aon Insurance Managers (Gibraltar) Limited
Aon Corporation (NYSE:AOC) is the leading global provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting. Through its 36,000 colleagues worldwide, Aon readily delivers distinctive client value via innovative and effective risk management and workforce productivity solutions. Our industry-leading global resources, technical expertise and industry knowledge are delivered locally through more than 500 offices in more than 120 countries. Aon was named the world’s “best broker” by Euromoney magazine’s 2008 Insurance Survey. Aon also was ranked by A.M. Best as the number one global insurance brokerage in 2007 based on brokerage revenues, and voted best insurance intermediary, best reinsurance intermediary, and best employee benefits consulting firm in 2007 by the readers of Business Insurance. For more information on Aon, log onto www.aon.com
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About Protected Cell Companies
Legislation allowing the formation of protected cell companies (PCCs) came into effect in Guernsey in 1997. PCC legislation has since been widely enacted by over 40 financial centres around the world including numerous American States.
A PCC operates in two parts, the core and the cells; there is a single core, but an infinite number of cells.
Each cell is legally ring fenced from other cells in accordance with PCC law. Creditors of a cell may, in certain circumstances, have recourse to assets held within the core, but not to the assets of the other cells.
A PCC will generally have two classes of shares -Ordinary and Cellular.
The PCC will have one Board of Directors, normally controlled by the core shareholder.
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