The Connecticut Supreme Court, following one of its own 1999 decisions, has held that an arbitration panel is not required to give preclusive collateral estoppel effect to a prior arbitration award, even where the prior award involved the interpretation of the same provision of a contract between the same parties. LaSalla v. Doctor's Associates, Inc., SC 17483 (Conn. June 13, 2006). The Court held that the desire to maintain the flexibility of the arbitral process was more important than the desire to promote the stability and finality of judgments in this context, noting in dicta that a specific provision in the contract to the contrary might have led to a different result.
US allowed to interevene in broker liability case to contest disclosure of audit report
A US Magistrate Judge has granted the United States permission to intervene in an MDL broker liability case to contest the disclosure of a report which it contends contains statements of potential Government witnesses in a pending criminal case, where the statements would not be subject to disclosure in the criminal action. In re Insurance Brokerage Antitrust Litigation, MDL No. 1663 (D.N.J. July 12, 2006). The Government sought a stay of the disclosure until the conclusion of the criminal matter, which had been brought by indictment. The Court required in camera submissions prior to making a decision on the request for a stay of discovery of the report.
NASD arbitration award by default confirmed
A US District Court has confirmed an arbitration award entered in an NASD arbitration in unusual circumstances: Petitioner failed to present any evidence in an attempt to force a postponement of the final hearing. The Panel denied the request for a postponement, at which time counsel for Petitioner left the hearing. The Panel reconvened the next day to permit Petitioner to offer evidence, which it failed to do. The Panel later dismissed the claims for lack of evidence. The Court found that Petitioner's failure to proceed was not misconduct by the Panel. Kober v. Kelly, Case No. 06-3341 (USDC S.D.N.Y. July 18, 2006).
Legislation potentially affecting reinsurers proceeds in US and UK
The implementation of legislation regulating the reinsurance industry is proceeding in the UK, while federal regulatory legislation is under consideration in the US Congress. In the UK, the Financial Services Authority has issued a consultation paper titled Implementing the Reinsurance Directive, which describes the European Union's Reinsurance Directive and the FSA's implementation initiatives. The Reinsurance Directive is intended to create a single European market in reinsurance and remove remaining barriers to trade within the EU arising from varied supervisory regimes.
In the US, the Nonadmitted and Reinsurance Reform Act of 2006 is pending in the House. This bill, if enacted, would pre-empt state laws and attempt to create uniformity in the regulation of reinsurance, and would grant a reinsurer's domiciliary regulator the sole responsibility for regulating the financial solvency of the reinsurer if such state is an NAIC accredited state.
Tokio Marine places securitization of typhoon risks
Tokio Marine & Nichido Fire Insurance Co. has arranged reinsurance cover for approximately $200 million of typhoon risks by means of a securitization. Swiss Re accepted reinsurance of the risks and transferred the risks to a special purpose Cayman Islands company which issued the securities. The five year, BB+ rated securities transaction was designed and sold with the assistance of SwissRe Capital Markets Corporation.