Article 6.3.1

(Liability for costs)

Irrespective of agreed limits, the reinsurer shall indemnify the reinsured for defence expenditures, declaratory judgment expenses, and pre- and post-judgment interest reasonably incurred by the reinsured in respect of declining liability under the underlying insurance contract. In proportional reinsurance, the reinsurer will indemnify the reinsured for such costs to the extent of its share of the risk. In non-proportional reinsurance, the reinsured and the reinsurer will share such costs in accordance with their respective exposure to the claim.