Bermuda's insurance companies achieved an almost 100 percent compliance rate for fulfilling their contracts, according to the latest report by the Association of Bermuda Insurers and Reinsurers (ABIR).

The 22 members of ABIR reported a 95 percent compliance rate for insurance contracts and 96 percent for reinsurance contracts with contract certainty guidelines first adopted in 2008.

As defined in the ABIR and Bermuda Insurance and Reinsurance Brokers Association (BIRBA) contract certainty principles: "Contract certainty is achieved by the full and final agreement of all terms and conditions between the re/insurer and re/insured at the time of binding.

"This will be evidenced by a binder, cover note or similar which reflects all terms and conditions and which is agreed by the re/insurer. The final committed capacity must be clearly identified."

Furthermore, the parties must commit to providing final contract documentation within 30 days of inception of the contract.

Following a trial run of reporting on compliance with the ABIR Contract Certainty Code of Practice for the 2008 contract year, ABIR members agreed to survey contract certainty compliance for the contracts completed during contract year 2009.

The 2009 ABIR Contract Certainty results represent the first full year's reporting for the 2009 year with 19 members (up from 16 last year) submitting data covering a total of more than 15,000 contracts (5,633 insurance and 10,201 reinsurance contracts). The results demonstrate increased levels of compliance with the ABIR Contract Certainty Code of Practice for both types of contracts with the figures up from 91 percent for insurance and 96 percent for reinsurance in 2008.

"Documentation of contract obligations is vitally important to the policyholder/cedent and to the re/insurer," said Leila Madeiros, senior vice-president and corporate secretary of ABIR.

"Such documentation is important to preventing disputes and assuring prompt resolution of claims.

"The fact that the major global insurers and reinsurers in the ABIR membership have committed to this voluntary standards programme demonstrates the commitment of Bermuda risk takers to the highest standards of professionalism."

ABIR was asked to present the findings at the National Association of Insurance Commissioner's Reinsurance Task Force meeting in Seattle, Washington yesterday.