Principles of Reinsurance Contract Law (PRICL)

The aim of the present application for funding is to establish a research network to commence work on the subject of Principles of Reinsurance Law. This network will be set up by the (main) applicants, Prof. Helmut Heiss and Prof. Anton K. Schnyder (both from the University of Zurich), Prof. Martin Schauer (University of Vienna), Prof. Manfred Wandt (Goethe University Frankfurt am Main), and subsequently be expanded by involving other universities across the world. The networks first research project will be to draft transnational Principles of Reinsurance Contract Law (PRICL). For this purpose, a working group will be established; it will be made up of academics from countries with leading insurance sectors and representing as many legal families in the world as possible. The PRICL should bring about more intensive international academic discourse regarding the law of reinsurance, which represents a global systemically important financial service sector. This will be achieved by providing a uniform frame of reference and uniform legal terminology. By utilising conflict of law provisions, especially private autonomy in arbitration, the PRICL should provide the reinsurance industry with the opportunity to design and conclude their contracts on the basis of a single reinsurance contract law, which is uniform and transparent across the whole world. In implementing the project, a framework will also be provided for supporting young researchers in this field (in particular through doctoral theses and post-doctoral theses (Habilitationen)). Through the creation of doctoral and post-doc positions, supporting young researchers will be given priority from the outset. On completion of the PRICL, the research network will remain in place and offer a platform for subsequent projects in the field of transnational insurance law. Through the creation of doctoral and post-doc positions, it can be expected that the network will become permanently established.

The research project I 2125-G16 (Principles of Reinsurance Contract Law) lasted from 1st September 2015 until 31st July 2019. The project was aimed at developing a single private codification of transnational reinsurance contract law, the Principles of Reinsurance Contract Law (PRICL). Parties to a reinsurance contract may select the PRICL as the proper law governing their agreement. If the contracting parties opt for arbitral dispute resolution, the arbitral tribunal will decide any dispute in accordance with the PRICL. The application of the PRICL therefore does not require any action from the legislator. In order to develop a truly transnational framework for contracts of reinsurance, it is preferable to avoid any reference to a specific national legal system. The PRICL are therefore aligned and intended to be chosen together with the UNIDROIT Principles of International Commercial Contracts. The UNIDROIT Principles shall regulate general issues of contract law not governed by the PRICL. The PRICL do not merely consist of legal rules. In order to facilitate contract certainty, each Rule is accompanied by comprehensive Comments explaining the approach taken, the modus operandi of the Rule and the relationship to other Rules of the PRICL. In addition, informative Illustrations provide examples of how particular problems are to be tackled under the respective Rule. By providing a uniform frame of reference and uniform legal terminology, the PRICL seek to intensify the international academic discourse regarding the law of reinsurance, which represents a globally important financial services sector. The project group has developed considerably more principles than originally projected. The PRICL as they stand now thus constitute a substantial partial private codification of transnational reinsurance contract law which the project leaders estimate to cover approximately 40 per cent of all issues to be addressed in a complete private codification of transnational reinsurance contract law. The Austrian project team took the primary responsibility for the development and drafting of Chapter 4 concerning Loss allocation. The PRICL (Rules including Comments and Illustrations) have been published on the project homepage (https://www.ius.uzh.ch/de/research/projects/pricl.html). Further Principles will be developed in the course of a follow-up research project (PRICL II). The Austrian project team led by Professor Dr. Martin Schauer has also developed a research plan for another follow-up research project scientifically targeting arbitral dispute resolution as the procedural track of the execution and performance of insurance and reinsurance contracts in general, but particularly of those reinsurance contracts governed by the PRICL. The application for funding has been submitted to the Austrian Science Fund and is yet pending.