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"Insurance-Linked Securities: Avoiding the Pitfalls," Insurance Day

Clive O'Connell
Goldberg Segalla LLP - London Office

April 29, 2014

Previously published on April 24, 2014

“There are very good reasons why insurance-linked securities (ILS) are seen as a positive alternative to catastrophe reinsurance by regulators and others concerned about the solvency of insurers and reinsurers,” writes Clive O’Connell, a partner in Goldberg Segalla’s Global Insurance Services Practice Group.

“Solvency risk, however, is not the only risk of non-performance that exists. There is not only the risk a counterparty cannot pay but the risk it will not pay: litigation risk.”

In this article, Clive examines how the nature of ILS — including the lack of a long-term relationship, differing restraints on the investor, and the bespoke nature of contract wordings — can increase the risk of a dispute after a major loss. He provides practical tips for reducing, and hopefully eliminating, litigation risk through paying careful attention to the contract wordings of ILS products.


The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

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