STORY FROM: Reinsurance & Arbitration

Ill. Appeals Court Denies Applied Underwriters’ Motion to Compel Arbitration

SPRINGFIELD, Ill. — An Illinois appellate court has upheld a denial of Applied Underwriters Inc.’s motion to compel arbitration of a workers’ compensation dispute involving two reinsurance agreements, ruling that the application of the McCarran-Ferguson Act reverse preempts the Federal Arbitration Act.

In a Sept. 10 opinion, the Illinois Court of Appeals, 4th District, concluded that Nebraska law applies to the reinsurance agreements and their arbitration provision and therefore bars arbitration because the dispute is insurance related.

In 2012, Onken’s American Recyclers Inc. and OAR Trucking Inc. purchased worker’s compensation insurance from Applied Underwriters Inc. As part of AUI’s ...

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