The City Disputes Panel (CDP) is advising that senior executives do not broker reinsurance contracts without the knowledge of other senior executives.
In a major new report, CDP provides advice for reinsurance buyers, based on lessons learnt from the collapse of Independent Insurance.
Legal firm Norton Rose drew up a due diligence questionnaire based on the findings. It said: "Allegations have been made that reinsurance may have been purchased without full knowledge of the board of directors.
"If those are true, it reinforces the need for reinsurance buying to be in the domain of a senior-defined committee, including executive and non-executive board members who are not involved in the transactional side of the business."
The report, which took two years to complete, aims to increase transparency and avoid disputes about reinsurance contracts.
CDP chief executive Guy Sutton said reinsurer RK Carvill & Co had requested the paper because it was concerned the image of reinsurance was "not as good as it might be".
He said the report showed how practices needed to change. "Reinsurance is a massive item for insurance companies, accounting for up to one-third of their entire budgets."
He added the recent demise of some major insurance companies had often been surrounded by a lack of management awareness about key reinsurance arrangements.
CDP appointed an independent panel to look into the activities of reinsurers and brokers, consisting of Ernst & Young partner Paul McNamara, former Cologne Re CEO Peter Downey and Sir David Calcutt QC.
The report and reinsurance buyer's questionnaire included sections covering causes of disputes, establishing the scope of expected services, performance of the market, conflicts of interest and transparency in compensation arrangements.