Vincent Vitkowsky, Reinsurance Issues Arising From the 2005 Hurricane Season, 41 Tort Trial & Ins. Prac. L. J. 999 (Spring 2006) – the author addresses issues likely to arise under reinsurance of hurricane losses, including coverage and claim adjustment issues, the follow-the-fortunes doctrine, “occurrence” definitions and aggregation of losses.
Vacation of arbitration awards due to failure to follow arbitration agreement
Two opinions recently have addressed the issue of whether an arbitration award should be vacated when the arbitrators fail to follow the arbitration agreement.
- In Martin v. Wells Fargo Financial, Inc., 2006 WL 2466945, Case No. 05-00003 (9th Cir. Aug. 25, 2006), the Court of Appeals affirmed a District Court decision vacating an arbitration award “because the underlying arbitrations were not conducted in accordance with the terms of the parties' arbitration agreement.” This unreported opinion is not available on Pacer, and it does not reveal what the Court of Appeals viewed as the deficiencies in the arbitration.
- In Allstate Ins. Co. v. Superior Court, 2006 WL 2473419 (Cal.Ct.App. Aug. 29, 2006), the Court reversed the vacation of an award on the basis that the panel rendered a “reasoned” award when the arbitration agreement provided that the award should not state reasons. Instead of vacating the award, the Court directed that the “reasons” be stricken from the confirmed award as surplusage.
Alternative Risk Transfer portal
Artemis describes iteself as “the Alternative Risk Transfer Portal.” It contains a directory describing numerous alternative risk transfer financing transactions, and provides visitors with an oportunity to subscribe to a news feed of alternative risk transfer deals.
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California court vacates arbitration award involving insurer in liquidation
A California Court of Appeal has reversed an order of a Liquidation Court, directing it to vacate an arbitration award that rescinded a reinsurance contract where the reinsureds had been placed in liquidation by the California Insurance Commissioner. The Court had no difficulty with the rescission of the reinsurance, but took exception with the panel's action of imposing a set-off of approximately $4.5 million against the accompanying return of premium by the reinsurer to the company in liquidation. The Court of Appeals held that the set-off award violated an injunction issued when the reinsureds were placed in liquidation, which prohibited any party from maintaining any claims, or asserting any right of set-off, against the parties in liquidation. Garamendi v. California Compensation Ins. Co., 2005 WL 3485747 (Cal.Ct.App. 2 Dist. Jan. 20, 2006). Since the arbitration award only provided the amount of the payment due to the reinsureds, which was net of the set-off amount, the Court could not determine the amount of premium that should be returned. It therefore remanded the matter to the Liquidation Court, with directions that it order a new arbitration hearing.