Insurance law can be an enterprise-wide issue, so it’s essential that legal experts and risk managers understand what happens when the law is applied in business, Jorge Luzzi, the President of the Federation of European Risk Management Associations (FERMA), said this morning (Monday 3 June).
Mr Luzzi was opening European insurance law: when theory meets practice, a conference organised by FERMA with the insurance law organisation AIDA Europe in Paris today.
It is the first time the two have collaborated, and they have brought together eminent legal experts and risk managers from eight countries to discuss co-insurance, embargoes, serial claims and directors’ and officers’ (D&O) insurance.
Mr Luzzi said: “Taking FERMA’s 22 member associations together, we represent about 4,500 individual risk and insurance managers. I say risk and insurance managers deliberately because today not all risk managers deal with insurance. Insurance law, however, is important to all of them. If there is a problem over a major claim, it can impact the company’s cash flow, the balance sheet and even the directors’ personal liability.”
For example, he explained, if a major partner on a coinsurance drops out of the consortium when there is a large loss, collecting the claim is much more difficult, and there can be serious consequences for the business.
The implications of trade embargoes and expanding regulatory action against directors and senior managers are some other ways in which insurance law has wide repercussions on business.
Mr Luzzi also said that the new connection between FERMA and AIDA Europe can help strengthen the presentation of common interests on insurance legal matters to European institutions. “For our part, we believe we can contribute to AIDA’s understanding of how the law works when it gets to workplace. Today’s title, European insurance law: when theory meets practice, says it all.”
FERMA is a federation of 22 risk management associations in 20 European countries. In terms of their insurance law systems, they are a varied group. Some have a large, sophisticated insurance market with well developed insurance jurisprudence. Others are smaller countries, and some had a state insurance monopoly until about 20 years ago.