Question 1

When can an insurer normally begin a subrogation action against a third party?

Accepted Answer

Only after it has indemnified its own insured for the loss — Subrogation is a right acquired by payment — the insurer steps into the insured's legal shoes only once it has made the insured whole.

Question 2

If a reinsurer paid 60% of a claim, what share of a later subrogation recovery would it normally expect?

Accepted Answer

60%, matching its share of the original loss — Recoveries are shared in the same proportion as the original loss was shared, so a reinsurer that paid 60% of the loss gets 60% of what is recovered back.

Subrogation

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