Insurance Law360 is part of my daily reading and it tipped me off to a case which raises the same problem about arbitration, I noted in Should Insurance Agents Get Sued for Selling Insurance Which Requires Arbitration in a Far Away Location and Deprives Their Customers of Consumer Protection Laws? and Arbitration Is an Increasing Trend Found Within Property Insurance Policies, and Arbitration is Not Appraisal.
The policy covers numerous properties in Florida damaged by Hurricane Irma. Yet, the policy demands that disputes be resolved through arbitration and apply New York law:
The seat of the Arbitration shall be in New York and the Arbitration Tribunal shall apply the law of New York as the proper law of this insurance.
In this case, the article indicates that the policyholder REIT is demanding $20 million yet the surplus and excess insurers paid only $1.25 million. Both parties submitted to the arbitration, but the selection of an umpire has caused even more delays. The policyholder was trying to get a Florida court to speed up the selection of the Umpire and the insurers claim that a federal court in New York must do so.
For attorneys reading this, I would suggest that they read a law review article, Venue for Motions to Confirm or Vacate Arbitration Awards Under the Federal Arbitration Act.1
For everybody else which includes Florida agents, policyholders, legislators and regulators, we need to stop abuse by the Surplus and Excess Lines insurance industry. Hauling Florida policyholders off to New York and apply New York law to damage that occurs in Florida is wrong. Using arbitration clauses to gain legal advantage is wrong. Allowing surplus lines carriers to sell policies like this to Floridians is wrong. It is another example of wrongdoing and the need for Florida legislators and regulators to take notice and do something, as I noted in Insurance Regulation and the Attack on Admitted Insurance Carriers in Florida.
Quote For The Day
I’m laying out my winter clothes and wishing I was gone,
Going home, where the new york city winters aren’t bleedin’ me.
1 Susan C. Rabasca, Venue for Motions to Confirm or Vacate Arbitration Awards Under the Federal Arbitration Act, 57 Fordham L. Rev. 653