In the first judgment to provide guidance on the allocation of mesothelioma liabilities at a reinsurance level, the court of appeal in equitas insurance limited v municipal mutual insurance limited [2019] EWCA civ 718 has ruled that insurers cannot choose to allocate their full loss to whichever reinsurance policy would produce the maximum recovery, ie so-called “spiking” or “pick-and-choose” is not permitted.Cognitive learning disorder rather, losses must be presented to reinsurers on the basis of a pro rata allocation by reference to time on risk.

The epic struggles of the english courts in grapplling with the unique problems presented by mesothelioma claims are well-known.Cognitive learning disorder one of the outcomes was the development of a common law rule allowing an employee who has been exposed to asbestos over a number of years (and a number of employers) to recover the full amount damages from any single employer, even where it is not possible to prove on the balance of probabilities which employer was responsible for the critical exposure which caused the disease (fairchild v glenhaven funeral services [2002] UKHL 22; compensation act 2006, s.3).Cognitive learning disorder employers can then pursue other employers for contribution (apportioned on basis on the period of employment).

Similarly, any employers’ liability insurer on risk during the period of wrongful exposure is liable to indemnify the employer in full, regardless of the period for which it provided cover (zurich insurance plc UK branch v international energy group ltd [2015] UKSC).Cognitive learning disorder insurers can then pursue other insurers on risk for contribution (apportioned on a time on risk basis) or even the employer itself for periods during which it was uninsured.Cognitive learning disorder

The report was issued in response to the european commission’s request (through its fintech action plan published on 3 march 2018) that the european supervisory authorities – EIOPA, the european banking authority (EBA) and the european securities and markets authority (ESMA) – explore the need for guidelines on outsourcing by regulated entities to cloud service providers.Cognitive learning disorder as adoption of cloud computing in the financial sector increases, the commission has concerns about the uncertainties of its interpretation by supervisory authorities within the scope of existing outsourcing requirements.Cognitive learning disorder

While all three of the european supervisory authorities launched initiatives to answer the commission, the EBA lead the charge. It issued detailed recommendations on outsourcing to cloud service providers (EBA recommendations) that have applied to credit institutions and investment firms since 1 july 2018.Cognitive learning disorder the EIOPA report announces EIOPA’s intention to publish guidelines on cloud for the (re)insurance sector in the course of 2019. The report notes that EMSA is currently considering whether to issue any guidelines, although ESMA’s 2018 annual report and 2019 work programme summarises the work that it has already done as part of its supervisory project on cloud computing.Cognitive learning disorder

For example, while certain regulators have already issued or are planning to issue national guidance on cloud outsourcing (e.G. The UK, france, germany and poland), other regulators rely on broader national standards to support the management of specific critical areas of cloud outsourcing (e.G.Cognitive learning disorder in spain, italy and the netherlands) and others have no specific plans (e.G. Portugal and ireland). The report also notes that nsas take different views as to whether cloud computing is always outsourcing, and some nsas have adopted a specific definition for cloud computing.Cognitive learning disorder

• despite this, EIOPA should issue guidance on cloud outsourcing in order to provide legal transparency to regulated undertakings and service providers in the market and “to avoid potential regulatory arbitrage”.Cognitive learning disorder this guidance will be aligned with the EBA recommendations and, where applicable, the EBA’s new guidelines on outsourcing arrangements (as these incorporate and will repeal the EBA recommendations when the guidelines come into effect on 30 september 2019).Cognitive learning disorder

EIOPA believes that, due to the rapidly-developing nature of cloud computing, cloud outsourcing regulation should not attempt to regulate all (re)insurance-related aspects, but should instead be principles-based.Cognitive learning disorder this suggests that EIOPA’s guidance will not be as prescriptive as aspects of the EBA recommendations and guidelines, but it will be interesting to see:

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• if EIOPA deems all cloud services to be ‘an outsourcing’ and subject to its guidance. The report suggests this might be the case, with the executive summary containing statements such as “the purchase of cloud computing services falls within the broader scope of outsourcing” and “as to applicable regulation, cloud computing is considered as an outsourcing”.Cognitive learning disorder concerns about this approach were raised in feedback to the EBA’s consultation on its draft guidelines (which now incorporate the EBA recommendations), in response to which the EBA highlighted that its guidelines do not say that all cloud services are also outsourcing arrangements.Cognitive learning disorder

EIOPA, the EBA and ESMA have also agreed to start a joint market monitoring activity in the second half of 2019. This is aimed at developing policy views on how cloud outsourcing in the finance sector should be treated in the future.Cognitive learning disorder the group will consider the increasing use of cloud technology, and the potential for large cloud service providers to be a single point of failure.Cognitive learning disorder