Reinsurance Broker Not Obligated to Pay Annual Fee, Federal Judge Rules

MINNEAPOLIS - An insurer's former reinsurance broker is not obligated to pay an "annual fee" to the insurer because the parties' contract included a "forfeiture provision," which relieved the broker of paying the fee if it is terminated or replaced, a Minnesota federal judge has ruled. Olympus Insurance Co. v. AON Benfield Inc., No. 11-2607 (D. Minn.).

In a March 30 order, Judge Patrick J. Schlitz of the U.S. District Court for the District of Minnesota rejected Olympus Insurance Co.'s assertion that the broker was required to pay a fee for the first fiscal year, ruling that the forfeiture provision …