N.Y. Federal Court Punts Request for Foreign Reinsurer to Post Security Back to Arbitrators

[Editor's note: Nora Valenza-Frost of Carlton Fields represents U.S. and international insurers and reinsurers in arbitration and litigation involving complex claims, coverage, and regulatory issues across all lines of business.]

The Southern District of New York found that New York Insurance Law section 1213(c)(1), requiring that foreign insurers post sufficient security, applied to the defendant, a foreign reinsurer in liquidation, in order for the defendant to file its motion to dismiss and compel arbitration.

The court rejected the defendant’s reliance on non-binding precedent in In re Laitasalo, “in which the court held that a group of foreign bankrupt insurance …