https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3AThird-party_consent_letterDefinition:Third-party consent letter - Revision history2026-06-21T02:17:56ZRevision history for this page on the wikiMediaWiki 1.43.8https://www.insurerbrain.com/w/index.php?title=Definition:Third-party_consent_letter&diff=17844&oldid=prevPlumBot: Bot: Creating new article from JSON2026-03-15T15:40:52Z<p>Bot: Creating new article from JSON</p>
<p><b>New page</b></p><div>📋 '''Third-party consent letter''' is a formal written authorization, commonly encountered in [[Definition:Warranty and indemnity insurance (W&I) | warranty and indemnity (W&I) insurance]] and broader [[Definition:Mergers and acquisitions (M&A) insurance | M&A insurance]] transactions, in which one party to a contract grants consent for another party — or an [[Definition:Insurer | insurer]] standing in that party's shoes — to exercise certain rights, receive information, or take specified actions that would otherwise require approval. In the transactional insurance context, the most common use arises when a W&I insurer needs the seller's consent to access [[Definition:Due diligence | due diligence]] materials, management presentations, or [[Definition:Disclosure | disclosure]] information that was originally provided under confidentiality restrictions in the [[Definition:Sale and purchase agreement (SPA) | SPA]] or related transaction documents.<br />
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🔄 The mechanics are straightforward but contractually significant. The [[Definition:Broker | broker]] or the buyer's legal counsel will request the seller (or occasionally another third party such as a lender or joint venture partner) to sign a letter acknowledging and consenting to the disclosure of specified information to the W&I [[Definition:Underwriter | underwriter]]. This letter typically clarifies the scope of information being shared, confirms that the disclosure does not waive any privilege, and may disclaim any duty of care owed by the seller to the insurer. Some consent letters also address the insurer's [[Definition:Subrogation | subrogation]] rights — for example, the seller may seek confirmation that the insurer will not subrogate against the seller except in cases of fraud or deliberate breach. Negotiating the consent letter can become a friction point if the seller is reluctant to engage with the buyer's insurer or objects to the scope of information sharing.<br />
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✅ Without a properly executed third-party consent letter, the W&I underwriter may be unable to review critical transaction materials, which can delay or even prevent the [[Definition:Underwriting | underwriting]] process from proceeding. In competitive auction processes — common across European, US, and Asia-Pacific [[Definition:Insurance market | M&A markets]] — delays in obtaining seller consent can jeopardize the buyer's ability to present a clean, insured bid by the deadline. Additionally, the consent letter's treatment of subrogation rights has long-term implications for the seller's post-closing exposure. Best practice among experienced [[Definition:Broker | brokers]] and M&A counsel is to negotiate the form of the consent letter early in the process, ideally in parallel with the initial [[Definition:Teaser (blind teaser) | teaser]] circulation, to avoid it becoming a bottleneck at signing.<br />
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'''Related concepts:'''<br />
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* [[Definition:Warranty and indemnity insurance (W&I)]]<br />
* [[Definition:Subrogation]]<br />
* [[Definition:Due diligence]]<br />
* [[Definition:Sale and purchase agreement (SPA)]]<br />
* [[Definition:Non-disclosure agreement (NDA)]]<br />
* [[Definition:Disclosure]]<br />
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