Publication of the Principles of Reinsurance Contract Law (PRICL), Version 1.0, 2019
UNIDROIT, as a longstanding partner of the project to formulate a “restatement” of existing global reinsurance law, is very pleased to announce the finalisation of the Principles of Reinsurance Contract Law (PRICL), Version 1.0 of 2019.
The PRICL are now freely available on-line here.
Overview of the project
For an overview of the project’s scope and aim: H. Heiss, From Contract Certainty to Legal Certainty for Reinsurance Transactions: The Principles of Reinsurance Contract Law (PRICL)
Background and history of the project
In July 2015, the Secretariat was approached by a group of scholars and practicing lawyers led by Professor Anton K. Schnyder and Professor Helmut Heiss (University of Zurich, as “Lead Agency”), Professor Martin Schauer (University of Vienna) and Professor Manfred Wandt (University of Frankfurt), who were examining the feasibility of formulating “Principles of Reinsurance Contract Law” (PRICL). This initiative was inspired by the project group “Restatement of European Insurance Contract Law“, which had led to the publication of the Principles of European Insurance Contract Law (PEICL. The purpose of the project is to formulate a “restatement” of existing global reinsurance law, which is largely embedded in international custom and usage, but is seldom the object of legislation.
The project leaders expressed the view that the proposed principles presupposed the existence of adequate rules of general contract law. Rather than attempting to re-create such rules, the proposed new principles should refer to the UNIDROIT Principles of International Commercial Contracts as the general part of contract law.
The project has received financial support from the Swiss National Science Foundation, the German Research Foundation and the Austrian Research Promotion Fund. In addition to the project managers, the research team includes well-known representatives from Belgium, Brazil, China, Germany, France, Great Britain, Italy, Japan, Singapore, South Africa and the United States. In addition, two advisory groups made up of representatives of the global insurance and reinsurance markets advise the research team. For more details on the composition of the Working Group, see the project page on the University of Zurich’s website.
The Governing Council decided to recommend this topic for inclusion in the UNIDROIT Work Programme for the triennium 2017-2019 by the General Assembly, and recommended to assign it a low level of priority. The General Assembly endorsed this recommendation of the Governing Council at its 75th session, on 1 December 2016.
Meetings of the Working Group
The participants at the first workshop of the Project Group (Zürich, 27-30 January 2016) agreed that specific principles and comments should be drafted on the following topics: choice-of-law, non-disclosure, errors and omissions, conditions precedent, event/accumulation/aggregation, late notice, back-to-back cover, “follow the fortunes” and “follow the settlement” principles, cooperation, time bar rule, termination and recapture, extra contractual obligations of the reinsured. The participants also agreed on a timeline with a view to substantially completing drafting of PRICL by the year 2018. UNIDROIT has actively participated in the biannual meetings of the Working Group, organised by the Universities of Frankfurt, Vienna and Zurich, with a view to support the use of the Principles as general contract law rules and explaining, be it the case, their content and interpretation.
At its 98th session, the Governing Council took note of the finalised version of the black-letter rules and comments of the PRICL, commended their use of the UNIDROIT Principles on International Commercial Contracts as a model and as rules of general contract law, and authorised the Secretariat to refer to the text of the PRICL on the UNIDROIT Website once the publication was finalised.
Workshops and seminars
On 10 May 2019, as a conclusive event to the 98th session of the UNIDROIT Governing Council, members of the Working Group on the Principles of Reinsurance Contract Law Project, Professors Helmut Heiss and Diana Cerini as well as Mr Lari Kuitunen and Dr Eberhard Witthoff made presentations on the finalised PRICL rules and comments. The presentations have been published in the Uniform Law Review (Vol.25, Issue 1).
On 9 October 2020, Secretary General Ignacio Tirado provided a closing speech illustrating the Principles of Reinsurance Contract Law project at the II International Congress of Insurance Law, which was co-hosted by ICADE Business School, the Faculty of Economics and Business Administration at Comillas Pontifical University and the Uria-Menendez Law firm.
On 17 September 2020, AIDA Europe, in cooperation with the PRICL Project Group, the AIDA Reinsurance Working Party and the AIDA Dispute Resolution Working Party set up a PRICL Mock Arbitration to examine the application of the Principles of Reinsurance Contract Law (PRICL) in a live environment with arguments presented by the parties in front of a single arbitrator and with a legal opinion for the case, rendered by an Advocate General. The documentation, as well as access to the recording, can be found here.
Ongoing work (2019-2023)
On 22 December 2018, the Secretariat was informed that the Working Group had received funding from the Swiss National Science Foundation and the German Research Foundation, which would support the project for another triennium (1 July 2019 – 30 June 2022), with the understanding that there would be no further prolongation after this period. The topics scheduled to be addressed are: “Chapter VI: Back-to-back-cover; Chapter VII: Non-contractual liability clauses; Chapter VIII: Termination and recapture; Chapter IX: Limitation periods”. Due to the connections between a number of these topics and the UPICC, and the desirability of this second part of the PRICL to continue referring to the UPICC both in the general choice-of-law clause and in the specific black-letter rules and comments, the PRICL Working Group asked UNIDROIT to continue its involvement under the same conditions as before (i.e. in-kind contribution through participation of a representative in the biannual Working Group meetings).
This proposal was approved by the UNIDROIT Governing Council at its 98th session, and recommended for adoption by the General Assembly, who adopted the continuation of the project for the Work Programme 2020-2022. The following is a list of the subsequent meetings that UNIDROIT has attended.
The 8th PRICL Workshop was held remotely on 18 January 2021. The Workshop featured, inter alia, a presentation by the Secretary-General and the Deputy Secretary-General on the Note on the UNIDROIT Principles of International Commercial Contracts and the COVID-19 Health Crisis, which was followed by a discussion on the PRICL and COVID-19.
In 2022, the UNIDROIT Secretariat attended the the 10th Working Group meeting, which was held on 13-15 July 2022 in Bad Homburg (Germany) to address the final draft on the period of reinsurance contracts, as well as a draft of the back-to-back clause, and a proposed joint Note on PRICL and the Covid-19 pandemic. The meeting also discussed the way forward of the project and marketing.
The 11th Working Group meeting was held in Rome at the seat of UNIDROIT on 25-27 January 2023, in conjunction with a public panel featured as part of the ATILA Lecture series. In relation to future consultation and dissemination activities, the Working Group is planning to hold industry and other stakeholder consultations in the second half of 2023, in order to raise awareness on the practical relevance and usefulness of the instrument and contribute to its finalisation.