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Mandatory Arbitration Clauses Reinsurance

Downs Rachlin Martin PLLC

Captive Insurance Update | Fall Edition 2021

Developments in Vermont Federal Issues State Issues Continued Impact of COVID-19 - The measures taken by the Vermont Department of Financial Regulation (the “DFR”) in 2020 in response to the COVID-19 pandemic have been...more

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Eleventh Circuit Affirms Order Compelling Arbitration of Cruise Liner Class Action

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Plaintiffs filed a putative class action against Norwegian Cruise Lines claiming that Norwegian failed to disclose profits it earned when the plaintiffs elected to purchase travel insurance during the cruise booking process....more

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New York Federal Court Punts Request for Foreign Reinsurer to Post Security Back to Arbitrators

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The Southern District of New York found that New York Insurance Law section 1213(c)(1), requiring that foreign insurers post sufficient security, applied to the defendant, a foreign reinsurer in liquidation, in order for the...more

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District Court Grants Motion to Compel Arbitration, Finding Arbitration Provision Not Severable From Allegedly Void Contract

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A Pennsylvania federal district court granted a motion to compel arbitration pursuant to 9 U.S.C. § 4 of the Federal Arbitration Act, over objection by the defendant on severability grounds. The defendant argued that its...more

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California Appellate Court Holds Arbitration Agreement and Delegation Clause Unenforceable for Failure to File with State...

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The California Court of Appeals became the latest court to determine that a common arbitration agreement related to the EquityComp workers’ compensation insurance program and accompanying reinsurance agreements is...more

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Munich Re Wins Arbitration It Initially Resisted, And Parties Agree To Dismiss Federal Lawsuit Against Munich Re As A Result

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Alabama Municipal Insurance Corporation (AMIC) has agreed to dismiss with prejudice its federal lawsuit against Munich Re after an arbitrator rendered judgment against AMIC in a case we previously wrote about here. ...more

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Court Compels Discovery, Awards Sanctions In Dispute Over Whether Reinsurance Arbitration Clause Applies

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In 2011, Top’s Personnel entered into a reinsurance agreement with Applied Underwriters Captive Risk Assurance Company (“AUCRA”), and several years later executed a promissory note (“the Note”) in favor of a related entity,...more

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Alabama Federal Court Finds Cedent Did Not Waive Arbitration, And Orders Reinsurance Dispute To Be Arbitrated

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Alabama Municipal Insurance Corp. (“AMIC”), an Alabama non-profit public insurer, brought suit in Alabama federal court against Munich Reinsurance America Inc. (“Munich Re”), alleging breach of a reinsurance contract for...more

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First Circuit Upholds Arbitrator’s Denial Of Arbitrability Of Reinsurance Agreement, Finding No Manifest Disregard Of The Law

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Mountain Valley Property, Inc (MVP) entered into a three-year reinsurance participation agreement with Applied Underwriters Captive Risk Assurance Co. Inc. (AUCRA), which contained a mandatory arbitration clause as well as a...more

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Court Declines To Determine Whether Reinsurance Syndicate For Which A Company Fronted Should Be Involved In An Arbitration

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The parties in this case presented to a court the issue of whether a reinsurance syndicate for which Federal Insurance acted as “a front” was a real party in interest and should be involved in an arbitration between Federal...more

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Arbitration Clause In Body Of Reinsurance Agreement Governs Over Provision In Endorsement

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In a dispute between First Mutual, a ceding company, and its reinsurer, Infrassure, over which of two competing arbitration clauses in a reinsurance contract governed, the Second Circuit affirmed a lower court decision in...more

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Third Circuit Reverses Order Denying Arbitration, Ruling That State Law Prohibiting Arbitration Of Insurance Matters Challenged...

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Applied Underwriters Captive Risk Assurance Company appealed from the denial of its motion to compel arbitration in a dispute related to a reinsurance participation contract with South Jersey Sanitation Company. The trial...more

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Court Compels Arbitration To Determine The Arbitrability Of Reinsurance Dispute With Captive Insurance Company

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In a suit by an auto body company against a captive insurance company for rescission of certain workers compensation reinsurance participation agreements, for disgorgement of $70,000 paid thereunder, and for fraud, breach of...more

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Treaty Tip: Is it an Insurance Policy or a Reinsurance Agreement?

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Whether a risk shifting agreement is an insurance policy or a reinsurance agreement may have important consequences. For example, many states prohibit the mandatory arbitration of disputes arising out of insurance policies,...more

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Missouri Court Of Appeals Finds Facultative Reinsurance Agreement Between Parties Was Truly A Liability Insurance Contract Which...

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Although the parties had entered into what they called a Facultative Reinsurance Agreement (“FRA”), the Missouri Court of Appeals determined the agreement was a contact of indemnity against liability, and thus, pursuant to...more

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Arbitrator, Not Court, Must Determine Arbitrability Of Dispute Under Reinsurance Participation Agreement

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Adopting in part a magistrate judge’s recommendation, a federal court in Maine recently held that the enforceability of an arbitration clause in a reinsurance agreement must be determined by an arbitrator, as opposed to a...more

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Following Reversal Of Arbitrability Rulings On Appeal, Court Dismisses Reinsurance Litigation Based On Forum Selection

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On August 15, 2014, we reported on a Tennessee district court finding unenforceable an arbitration clause in a Reinsurance Participation Agreement (RPA) between an insured and a reinsurer. The insured had filed a lawsuit...more

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Southern District Of New York: “If You Want Strict Application Of The Law, Don’t Agree To Arbitration Clauses.”

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A federal judge in the Southern District of New York recently denied a motion to vacate an arbitration award in a reinsurance dispute, scolding the movant for complaining that the arbitrators reached a compromise verdict. The...more

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Third Circuit: Federal Court Should Decide Whether An Arbitration Clause Authorizes Classwide Arbitration – Not The Arbitrator

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The Third Circuit recently was presented with the question of whether, in the context of an otherwise silent contract, the availability of classwide arbitration is to be decided by a court rather than an arbitrator. The...more

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Fifth Circuit Holds Order Remanding Case Back To Arbitrators For Clarification Is Non-Final And Non-Appealable

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The appeal arose from a lawsuit to clarify an arbitration award concerning an alleged breach of a corporate merger agreement containing a binding arbitration clause. The federal district court found the arbitration panel had...more

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Bankruptcy Trustee’s Action For Crop Reinsurance Proceeds Is Time-Barred

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A federal district court has held that a bankruptcy trustee’s action to compel payment of crop insurance proceeds is time-barred by virtue of the Federal Crop Insurance Act (FCIA) and the insurance policies’ arbitration...more

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Treaty Tips: The Service Of Suit Provision

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One common provision in reinsurance agreements is a Service of Suit provision, which typically provides that the parties consent to the jurisdiction of “any court of competent jurisdiction.” The breadth of the traditional...more

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Is It Time To Include Mandatory Arbitration Clauses In All Reinsurance Policies? Mandatory Clauses Could Avoid Unnecessary Future...

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Recent reports on the continued easing of collateral requirements for non-US reinsurers that operate in the US, raise the question: with the anticipated, increased presence of non-US reinsurers state-side, will more...more

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