Reinsurance Focus

New reinsurance-related and arbitration developments from Carlton Fields

JUDICIAL REVIEW OF ARBITRATION ISSUE DENIED AGAIN ON RIPENESS GROUNDS

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On December 1, 2008, we reported on a Sixth Circuit remand with instructions to dismiss for lack of jurisdiction on ripeness grounds, which the district court subsequently dismissed the action. Though in the underlying arbitration, the arbitration panel issued a “Partial Final Class Determination Award” denying the defendants’ motion for class certification. Then, after granting plaintiff’s motion to reopen the case, the plaintiff filed a motion to confirm the award, and defendants filed a motion to dismiss for lack of subject matter jurisdiction. Applying the Sixth Circuit’s analysis from the earlier action, the district court granted the motion to dismiss as the matter was not ripe for judicial review, determining that the plaintiff could not establish a suffering of harm or hardship and quoting the circuit court stating that courts “should remain reluctant to invite a judicial proceeding every time the arbitrator sneezes.” Dealer Computer Servs., Inc. v. Dub Herring Ford Lincoln Mercury, Inc., Case No. 017-10263 (USDC D.N.J. May 29, 2009).

This post written by Dan Crisp.

SPECIAL FOCUS: NAIC'S REINSURANCE REGULATORY MODERNIZATION ACT

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The NAIC's Reinsurance Regulatory Modernization Act was supposed to be the solution for the problems surrounding the regulation of reinsurance and the role of collateral in reinsurance transactions. SPECIAL FOCUS Editor John Pitblado describes the critical comments received to the exposure draft of the proposed federal legislation, the consitutional issues involved and the current status of this initiative, in Constitutional Concerns with the Reinsurance Regulatory Modernization Act.

This post written by John Pitblado.

SPECIAL FOCUS: NAIC’S REINSURANCE REGULATORY MODERNIZATION ACT

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The NAIC's Reinsurance Regulatory Modernization Act was supposed to be the solution for the problems surrounding the regulation of reinsurance and the role of collateral in reinsurance transactions. SPECIAL FOCUS Editor John Pitblado describes the critical comments received to the exposure draft of the proposed federal legislation, the consitutional issues involved and the current status of this initiative, in Constitutional Concerns with the Reinsurance Regulatory Modernization Act.

This post written by John Pitblado.

REINSURERS WILL NOT FEEL BROTHERLY LOVE; MOTION TO TRANSFER VENUE DENIED

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Two Philadelphia-based reinsurance companies’ motion to transfer venue from New York to Philadelphia has been denied. Describing the proximity of the two cities as a “95-mile jaunt” and citing the availability of “rapid, efficient transit,” the court was not persuaded by the defendants’ argument that Philadelphia would be a more convenient forum for defense and a majority of non-party witnesses. Despite the reinsurers’ contention that the reinsurance claims and billings at issue were handled in Philadelphia, making it the locus of operative facts, the court found that because the contracts were made in New York, the defendants “should expect to be sued here.” This blog previously reported on this matter after TIG successfully moved the court to amend its complaint. See May 19, 2009 posting. TIG Ins. Co. v. Century Indemnity Co., Case No. 08-7322 (USDC S.D.N.Y. June 4, 2009).

This post written by Brian Perryman.

FIFTH CIRCUIT CONFIRMS INTERNATIONAL ARBITRATION AWARD FROM NETHERLANDS

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On June 9, 2009, the U.S. Court of Appeals for the Fifth Circuit affirmed an arbitration award against Saipem America, which arose out of an international commercial insurance dispute. The Fifth Circuit reviewed the arbitration award handed down by a tribunal in The Hague, Netherlands for $1 million in damages and $400,000 in attorneys' fees. In addressing the parties' dispute over whether the U.S. Supreme Court's decision in Hall Street Associates prevented review of the award on nonstatutory grounds, the Fifth Circuit concluded that it may vacate the award only if a statutory ground supported the vacatur. With respect to the negligence claim, the Court ruled that the tribunal was within its authority to rule on the issue of negligence because the parties had submitted the issue in the “Terms of Reference” to the arbitration tribunal. Further, the Court ruled that the award of attorneys' fees was statutorily proper under Texas Code Section 172.145. Finally, the Court found no basis to overturn the tribunal's ruling as to indemnity. Saipem Am. v. Wellington Underwriters Agencies Ltd., No. 08-20247 (5th Cir. Jun. 9, 2009).

This post written by John Black.