Like many commercial contracts, some reinsurance contracts are filled with archaic terms, industry jargon, and, most unfortunately, legalese. And it doesn’t have to be that way. All contracts, including reinsurance contracts, should be written in plain English. It’s time to abandon templates that are overly wordy and obtuse. It’s time to “say what you mean, and mean what you say” in simple, clear, and concise language. This Expert Commentary will discuss why drafting reinsurance contracts in plain English is the right way to go.
Why Are Some Reinsurance Contracts Difficult to Read and Understand?
Historically, reinsurance contracts were put together by nonlawyers who thought that using archaic language and legalese was the way contracts should be drafted. They often took old contracts with old verbiage and reused them. Templates were created, and the ambiguities propagated. Most companies and reinsurance intermediaries have their own wording templates, and once approved (even decades ago) by senior management, they are difficult to change.
