A District Court has entered an Order to enforce the contractually agreed-upon procedure for appointing a third arbitrator in an insurance matter, setting deadlines for each step of the process. The Court also held that whether arbitrations regarding four different insurance agreements should be consolidated was a matter to be decided by the arbitrators. Clearwater Insurance Co. v. Granite State Insurance Co., Case No. 06-4472 (USDC N.D. Cal. Oct. 2, 2006).
Arbitration Process Issues
Court enforces contractual arbitrator appointment procedure and holds that arbitrators should decide whether to consolidate multiple arbitrations
A District Court has entered an Order to enforce the contractually agreed-upon procedure for appointing a third arbitrator in an insurance matter, setting deadlines for each step of the process. The Court also held that whether arbitrations regarding four different insurance agreements should be consolidated was a matter to be decided by the arbitrators. Clearwater Insurance Co. v. Granite State Insurance Co., Case No. 06-4472 (USDC N.D. Cal. Oct. 2, 2006).
UK Court permits substitution of party in arbitration and expanded damage request
The UK Commercial Court has approved an arbitrator's decision to permit the substitution of one Claimant for another to reflect what in effect was a corporate reorganization. It also permitted the Claimant to use a pending arbitration to seek an award of all balances that would come due under the treaty during the pendency of the arbitration, instead of requiring a filing of separate arbitrations for amounts that became due after the commencement of the pending arbitration. Harper Versicherungs AG v. Indemnity Marine Assurance Co., [2006] EWHC 1500 (QB) (June 23, 2006).
State court rules that Liquidation Act does not force payment of IBNR claims or avoid arbitration agreements
A New Jersey Appellate Court has agreed with arguments made by the Reinsurance Association of America, holding that a court could not, under the authority of New Jersey's Insurer Liquidation Act, adopt a plan that forced reinsurers to pay claims based upon IBNR estimates, and could not abrogate arbitration provisions contained in reinsurance agreements to force that disputes be litigated in the liquidation court. In re Liquidation of Integrity Insurance Company, Case No., C-7022-86, 2006 WL 2795343 (N.J. Super. A.D. Oct. 2, 2006).
California Insurance Code amended with respect to reinsurance matters
California has adopted amendments to its insurance code making changes regarding credit for reinsurance, insolvency of a ceding company, assets or deductions for reinsurance and foreign ceding insurers, and requirements with respect to the examination of reinsurance intermediaries. The new statute also requires that reinsurance intermediaries respond to subpoenas issued by arbitration panels. California Assembly Bill No. 2400, effective January1, 2007.