Applied Underwriters May Not Arbitrate Workers’ Comp Dispute, N.Y. Judge Rules

GOSHEN, N.Y. — Applied Underwriters Inc. (AU) may not arbitrate a workers’ compensation dispute because Nebraska law applies to the reinsurance participation agreement at issue, and thus nullifies the arbitration clause within that agreement as a matter of law, a New York judge has ruled.

In Dec. 5, Judge Catherine Bartlett of the Orange County Superior Court further ordered AU and reinsurer Applied Underwriters Captive Risk Assurance Company Inc. (AUCRA) to post an $800,000 bond pursuant to New York law.

Beginning in 2013, Milmar Food Group was covered under the Applied Underwriters Equity Comp workers’ compensation program. Pursuant to the …