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International Monetary Fund

Abstract

This paper discusses the Cuban insurance cases. The litigation in U.S. courts in which claims have been made under life insurance policies issued by U.S. or Canadian companies to applicants then resident in Cuba is the most extensive body of cases involving Article VIII, Section 2(6) that has come into the courts. The cases suggest that the benefits of Article VIII, Section 2(6), cease to be available to a country once it withdraws from the IMF, even in respect of contracts entered into when the country was a member. This conclusion seems to have been accepted by both courts and counsel in the cases.

Mr. Joseph Gold

Abstract

Written by Joseph Gold, former General Counsel and now Senior Consultant at the IMF, these volumes contain discussions of the ever-increasing body of cases in which the Articles have had a bearing on issues before the courts.

International Monetary Fund

Abstract

The change of regime in Cuba in 1959 led to a considerable migration of citizens from that country. Many of these émigrés held insurance policies issued by U.S. or Canadian companies that had been doing business in Cuba. A wave of litigation based on these policies flooded into courts in the United States against both groups of companies.1 One company alone had more than 6,000 policies outstanding that had been issued through its Havana branch. “The pending suits involve all kinds of policy claims, including death claims, suits for cash surrender values of policies, annuity benefits and endowment proceeds, as well as actions to force insurers to accept premiums and maintain policies in force.” 2

International Monetary Fund

Abstract

In 1945 the defendant company, a Louisiana corporation, issued to the plaintiff three single premium annuity contracts under which his daughters were the annuitants and under which monthly payments were to begin as each of the plaintiff’s three daughters reached the age of 21. The signatures of the defendant’s officials executing the policies were authenticated before a notary in Havana, and the policies were delivered to the plaintiff there on payment of the premium in dollars by the plaintiff. The contracts provided that the annuities were to be paid in dollars, and that all liquidations were to be paid at the defendant’s head office in New Orleans on delivery of the contract to the defendant. The plaintiff, who was vested with control of the contract, demanded its cash surrender value in Florida after he became a resident of that state. On the defendant’s refusal to pay, the plaintiff sued and the defendant counterclaimed for a declaratory judgment of nonliability. One policy matured in May 1957 before suit was brought, and another in May 1961 in the course of the litigation.

International Monetary Fund

Abstract

A fundamental question raised by the cases is the relation of Article VIII, Section 2(b), to private international law. That branch of the law of each country includes a set of rules that determine the law by which contracts, including their performance, are governed. Article VIII, Section 2(b), also establishes a rule for the recognition of certain provisions of a particular system of law. It declares that, if suit is brought in a member’s court to enforce an exchange contract, the court must refuse enforcement if the contract is contrary to the exchange control regulations of another member whose currency is involved. In short, the law of the member whose currency is involved must be recognized in the circumstances and for the purpose prescribed by Article VIII, Section 2(b).

International Monetary Fund

Abstract

The Cuban insurance cases support the thesis that if a country withdraws from the Fund it loses the benefit of Article VIII, Section 2(b), even in respect of contracts that were entered into when it was a member. This had already been held by the New York Supreme Court in Stephen v. Zivnostenska Banka, National Corporation.63 In the Ugalde case, the plaintiff’s motion for reconsideration of the case because Cuba had withdrawn from the Fund was dismissed, but no reason was given by the court. The defendant had opposed the motion on the ground that there was an alternative basis for the verdict, the determination that Cuban law governed the contract under private international law. In the Varas case, after the withdrawal of Cuba the defendant company asked the Superior Court of Pennsylvania to disregard the defendant’s argument based on the Articles, and the court said that, as a result of the withdrawal, a new look had to be taken at the cases that had been based on the Articles when both Cuba and the United States were members.

International Monetary Fund

Abstract

Les procès d’assurance cubains et les Statuts du Fonds

International Monetary Fund

Abstract

The litigation in U.S. courts in which claims have been made under life insurance policies issued by U.S. or Canadian companies to applicants then resident in Cuba is the most extensive body of cases involving Article VIII, Section 2(b), that has come into the courts so far. The cases suggest the following reactions.