Carlton Fields

FIFTH CIRCUIT DISMISSES FOR LACK OF APPELLATE JURISDICTION APPEAL OF ORDER COMPELLING ARBITRATION

January 14, 2015 by Carlton Fields

The Fifth Circuit Court of Appeals has dismissed, for lack of appellate jurisdiction, a district court order granting a motion to compel arbitration filed by Certain Underwriters of Lloyds of London and several other insurance companies. The Fifth Circuit held that the district court’s order was not a final, appealable order within the meaning of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards or the Federal Arbitration Act. The district court had granted the motion after finding the insurance contract at issue contained a clear and unambiguous arbitration clause, and had then stayed the case and closed it for administrative purposes. The Fifth Circuit found the district court’s order and administrative closure lacked the finality necessary for appellate jurisdiction, noting a “clear distinction” between final orders dismissing cases after compelling arbitration and interlocutory orders staying and administratively closing cases pending arbitration. The district court’s order was deemed to be the latter and the appeal was therefore dismissed. Southwestern Electric Power Co. v. Certain Underwriters at Lloyds of London, No. 13-31130 (5th Cir. Nov. 24, 2014).

This post written by Renee Schimkat.

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COURT APPROVES $7 MILLION SETTLEMENT AGREEMENT WITH REINSURER IN RELIANCE INSURANCE COMPANY’S LIQUIDATION

January 13, 2015 by Carlton Fields

A Pennsylvania court overseeing Reliance Insurance Company’s liquidation proceedings approved the settlement agreement between Reliance and XL Reinsurance Company. The agreement allowed the liquidator to terminate and commute the obligations between Reliance and XL under the parties’ reinsurance agreement, such that the estate would receive a $7,248,830 economic benefit. In re Reliance Insurance Company in Liquidation, 1 REL 2001 (Pa. Commw. Ct. Oct. 2, 2014).

This post written by Leonor Lagomasino.

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U.K. COURT APPROVES INSURANCE BUSINESS TRANSFER SCHEME

January 12, 2015 by Carlton Fields

A court in the United Kingdom has approved the transfer of the entire long-term insurance business of Prudential Annuities Limited (PAL) to The Prudential Assurance Company Limited (PAC). The transfer’s purpose was to simplify the corporate structure of Prudential UK’s business, improve the flexibility and efficiency of capital management, and facilitate Prudential’s response to regulatory developments. The transfer affected approximately 134,000 contracts of long-term insurance business, all non-profit pension policies, and approximately 90,000 policyholders. Regulators did not object to the transfer and an independent expert and three actuaries all supported it.

PAL was already an asset of the PAC fund to which its business was transferred and, since 2012, the vast majority of PAL’s business had been reinsured by that fund. The court found that the reinsurance arrangements for the transfer significantly restricted the ability of the PAC fund to “walk away” from PAL and agreed with the independent expert that there would be no adverse change to either PAL or PAC policyholders from the transfer. Finding that all requirements of the Financial Services and Markets Act 2000 had been met, the court sanctioned the transfer of business. In the Matter of Prudential Annuities Ltd., [2014] EWHC 4770 (Ch.) (High Courts of Justice (Chancery Division) Cos. Ct.) Nov. 13, 2014).

This post written by Renee Schimkat.

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IN BATTLE OF APPAREL COMPANIES, COURT COMPELS ARBITRATION

January 8, 2015 by Carlton Fields

In early September, a New York district court granted defendants United States Polo Association, Inc. (“USPA”) and Arvind Ltd.’s (“Arvind”) motion to compel arbitration. It further dismissed Ralph Lauren Corporation and its subsidiaries’ (collectively “Ralph Lauren”) complaint alleging breach of contract, fraudulent inducement, and unjust enrichment.

This action was the latest in a longstanding battle between Ralph Lauren and the USPA, who have been actively involved in trademark litigation since 1984. A 2003 settlement resolved disputes concerning USPA’s use of logos and trademarks with their sale of apparel. The settlement further contained an arbitration provision that would govern any dispute between the parties arising from the settlement agreement.

Ralph Lauren alleged that USPA/Arvind breached this settlement agreement by selling products that infringed upon their protected trademarks without language that indicated that the two companies were not affiliated. It also alleged that the defendants waived arbitration by filing to enforce arbitration in India instead of New York. The court rejected Ralph Lauren’s argument that the defendants waived their right to arbitration because Ralph Lauren showed neither substantive prejudice nor prejudice due to excessive cost and time delay. The court found that USPA/Arvind were not attempting to re-litigate any issue in arbitration. It further noted that “[i]t was the Polo plaintiffs, not USPA/Arvind, that filed the present action in the Southern District of New York and that postponed the arbitration proceedings in India,” negating a claim for excessive cost and delay. Finally, the court found that Ralph Lauren’s fraudulent inducement and remaining claims should be handled through arbitration. Ralph Lauren Corp. v. United States Polo Ass’n, No. 13 Civ. 7147 (S.D.N.Y. Sept. 4, 2014).

This post written by Matthew Burrows, a law clerk at Carlton Fields in Washington, DC.

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CONNECTICUT REVISES FINANCIAL REPORTING REQUIREMENTS

January 7, 2015 by Carlton Fields

The Connecticut Insurance Department has issued two Bulletins revising certain financial reporting requirements for certain insurers. Bulletin FS-4AR-14 (November 25, 2014) revises the annual financial filing requirements for accredited reinsurers, requiring the submission of an annual statement that complies with the NAIC’s Annual Statement Instruction Manual, an actuarial opinion and management discussion and analysis, a copy of the reinsurer’s annual independent audit report as of December 31, 2014 and a list of insurers domiciled in Connecticut ceding business to the accredited reinsurer as of December 31, 2014. Bulletin FS-4C-14 (November 24, 2014) requires that all captive insurance companies domiciled in or, in the case of a branch captive insurance company, licensed in Connecticut, file annual financial statements verified under oath by two executive officers. The annual financial statements must be certified by an independent public accountant and must include certain actuarial certifications.

This post written by Rollie Goss.

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