Bermuda Law Blog

30 Aug 2013

Bermuda is now the epicentre of the catastrophe bond/insurance linked security world. With $7 billion of these securities now listed on the Bermuda Stock Exchange, the island can claim almost half the value of the global market. Catastrophe bonds (also known as cat bonds) are risk linked securities that transfer a specified set of risks from an Insurance company which acts as a sponsor to investors through the issue of cat bonds and the trading in derivatives based on the bond. They were created and first used in the mid 1990’s in the aftermath of Hurricane Andrew and the Northridge earthquake and emerged from a need by insurance companies to alleviate some of the risk they would face if a major catastrophe occurred, which would incur damages that they could not cover by premiums and returns from investment using the premiums that they received. Typically an insurance company issues bonds through an investment bank which are then sold to investors. These bonds are inherently risky and are multi-year deals. If no catastrophe occurs, the insurance company pays a coupon to the investors who make a healthy return generally based on LIBOR plus between 3% and 20%. However if the catastrophe manifests itself the principal paid by the investors to purchase cat bond securities is forgiven and used by the sponsor to pay its claims to policy holders.
18:12 / Company & Commercial Law / Insurance
28 Aug 2013

Jennifer Haworth
Two recent announcements demonstrate that Bermuda has an important role to play in the global insurance market and is seeing growth in 2013. The Bermuda Monetary Authority (“BMA”) presented figures for the period ending July 2013 in which 47 new insurers were registered. This represents an 81% increase on last year which saw 26 new insurers registered. Interestingly, 13 of those new registrations came in the month of July alone. The BMA has indicated that the new registrations were predominantly special purpose insurers (“SPIs”). For 7 of the registered SPIs, their total projected premiums in their first year of business are expected to be over $151 million. The new registrations will cover a broad range of business areas including property catastrophe reinsurance, catastrophe bonds and life and annuity. It was also noted that the number of captives in Bermuda remains steady and has done so for the last three years. Contrary to the suggestions that captives are re-domiciling onshore, this has not been the case in Bermuda.
17:13 / Insurance
15 Aug 2013

Questions of Causation frequently arise in many areas of the law, but causation is not a single, unvarying concept to be mechanically applied without regard to the context in which the question arises.

Lord Bingham in R v Kennedy [2007] UKHL 38

A dissent in a court of last resort is an appeal to the brooding spirit of the law, to the intelligence of a future day, when a later decision may possibly correct the error into which the dissenting judge believes the court to have been betrayed.

Chief Justice Charles Evans Hughes The Supreme Court of the United States 3rd ed 1936

The last ten years have seen the question of “but-for” causation brought into sharp focus in order to avoid the potential injustice to thousands of Mesothelioma victims who have contracted the disease and who now seek to establish a causal link between Mesothelioma and their exposure to asbestos during the course of their employment which may have taken place many years before. The central problem that has bedevilled such employer’s liability claims has been the difficulty in establishing when the disease was triggered.
13:49 / Insurance
06 Aug 2013

Bermuda is Britain’s oldest overseas territory and the Privy Council in London is the final Court of Appeal from Decisions of the Court of Appeal in Bermuda. Further, the Supreme Court and Appeal Court of Bermuda are bound by decisions of the Privy Council in cases from all jurisdictions where the Privy Council is the final appellate court. It therefore pays to keep a close watch on Privy Council judgments. For example a judgment was recently delivered by Lord Neuberger on 23rd July, 2013 following a hearing in the case of Antigua Power Company Limited v The Attorney General of Antigua and Barbuda and others (285 KB PDF) [2013] UKPC 23 in which he delivered a withering attack on the Eastern Caribbean Court of Appeal for its delay in handling the first appeal.
13:44 / Bermuda Case Law & Legislation / Litigation & Dispute Resolution
24 Jul 2013

Jane Collis
If you should become incapacitated without an Enduring Power of Attorney, an application to the Supreme Court for the appointment of a receiver may be the only option for your loved ones to manage your affairs. The baby boomers are growing older and those of us who fall into this category need to be prepared for what may lie ahead. Do you know what will happen to you and your property in the event that you become incapacitated? Those who have planned ahead will have signed an Enduring Power of Attorney, giving someone authority to manage their property and affairs in such circumstances, and an Advance Treatment Directive, giving someone the power to make medical treatment decisions on their behalf. This option will still be available to you if your incapacity should be physical, but it will be altogether too late if you should become mentally incapacitated.
17:42 / Property Law / Wills, Trusts & Estates
19 Jul 2013

Fozeia Rana-Fahy
There has been a significant increase in contentious and non-contentious trust matters arising from family disputes in relation to Bermuda trusts. Most often these involve wealthy international dynastic families or family corporations. The type of matters we see before the Bermuda Courts include applications for variation of trusts or sanctions of a compromise between the trustees and various classes of beneficiary and/or the consent of the court on behalf of minor beneficiaries; applications for directions eg. relating to disclosure or distribution of assets; applications to remove trustees for breach of their duties or recovery assets allegedly lost as a result of breach of the trustees’ duties; and applications to set aside the whole trust on the grounds of fraud, undue influence or the uncertainty and failure of the trust objects.
13:55 / Bermuda Case Law & Legislation / Wills, Trusts & Estates
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