The follow-the-fortunes doctrine is re-examined, focusing on new reinsurance contracts. The basic principles of the follow-the-fortunes doctrine remain steadfast. Reinsurance contracts are subject to the general law of contract and the rules applicable to insurance contracts in particular. In addition to the provisions of a general contract, such as offer and acceptance, capacity of the contractual parties, intention to create a legal relationship, consideration, legality of the contract, etc., the insurance contract should also comply with the special rules regarding insurable interest, utmost good faith and principles of indemnity. The same applies to reinsurance contracts too.

When a reinsurance contract is considered as a contract of indemnity the general principle is that the liability of the reinsurer is restricted to the actual loss, which the original insurer (reinsured) has suffered, of course, subject to the limit of the contract of reinsurance. The same principle applies to life insurance contracts and also to other insurance contracts like personal accident insurances, though they are not one of contracts of indemnity.