School District Not Required to Arbitrate Claims Against Reinsurer, Texas Court Affirms

TYLER, Texas — A Texas appellate court has affirmed that a school district’s claims for storm damage coverage against an insurer and a reinsurer are not arbitrable because they are not based upon any obligation the reinsurer may have under the reinsurance certificate, which contains the arbitration clause.

In a May 25 opinion, the Texas Court of Appeals, 12th District, rejected the reinsurer’s argument that the school district can be compelled to arbitrate under the doctrine of direct benefits estoppel.

The Alto Independent School District obtained property insurance coverage from Texas Rural Education Association Risk Management Cooperative (TREA) for …