Cession Agreement Template for Hong Kong

A Cession Agreement is a crucial document in the insurance and reinsurance industry, used when an insurance company wishes to transfer part of its risk exposure to a reinsurer. This type of agreement is particularly important in Hong Kong's sophisticated financial services market, where complex insurance arrangements require careful structuring and documentation. The agreement typically includes detailed provisions on risk transfer, premium calculations, claims handling procedures, and reporting requirements. A well-drafted Cession Agreement must comply with Hong Kong's regulatory requirements, particularly the Insurance Ordinance (Cap. 41) and related regulations. It serves as the primary document governing the relationship between the cedant and reinsurer, establishing their respective rights, obligations, and operational procedures.

1. Parties: Identification of the ceding company and the reinsurer, including their full legal names, registration details, and addresses

2. Background: Context of the agreement, including brief description of the parties' businesses and purpose of the cession arrangement

3. Definitions: Definitions of key terms used throughout the agreement, including technical insurance and reinsurance terminology

4. Scope of Cession: Details of the insurance business being ceded, including types of risks, territories, and any exclusions

5. Premium and Commission: Terms relating to premium calculation, payment mechanisms, and any commission arrangements

6. Claims and Settlements: Procedures for claims notification, handling, and settlement between the parties

7. Accounts and Settlements: Provisions regarding accounting procedures, settlement of balances, and reporting requirements

8. Security and Collateral: Requirements for any security or collateral arrangements between the parties

9. Duration and Termination: Term of the agreement, renewal provisions, and circumstances for termination

10. Confidentiality: Obligations regarding confidential information and data protection

11. Governing Law and Jurisdiction: Specification of Hong Kong law as governing law and jurisdiction for disputes

12. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment restrictions