Arbitrator Must Decide Enforceability of Reinsurance Participation Agreements, Calif. Federal Judge Rules

SAN FRANCISCO — An arbitrator must decide whether workers’ compensation reinsurance participation agreements are enforceable because the agreements’ arbitration clause applies to the parties’ dispute and therefore the delegation provision contained within that clause is enforceable.

On Sept. 28, Judge Edward M. Chen of the U.S. District Court for the Northern District of California further held that the question of whether “good faith negotiation” is a condition precedent is a question of contract interpretation for the arbitrator to decide.

Mike Rose’s Auto Body Inc. entered into two reinsurance participation agreements with Applied Underwriters Captive Risk Assurance Company Inc. in Oct. …