Did the Insurers Appointed Arbitrator Breach the Confidentiality Agreement?
By Alex Verbich, JD April 20, 2010 Ten days apart, a U.S. District Court in Illinois seemingly reached different conclusions on whether insurer’s appointed arbitrators had breached confidentiality agreements and were not disinterested parties. In Trustmark Insurance Company v. John Hancock Life Insurance Company, the defendant John Hancock Life Insurance Company (“Hancock”) ceded retrocessional and direct business to Trustmark Insurance Company (“Trustmark”). The contracts included a mandatory arbitration clause. Hancock began arbitration (“1st arbitration”) after Trustmark refused to honor Hancock’s retrocessional billings. In the 1st arbitration the parties entered into a confidentiality agreement, which each arbitrator also signed. In June 2004, the arbitrators ruled in favor of Hancock that the business was covered and properly ceded. 1 Hancock sent a new billing to Trustmark which once again was disputed so Hancock started arbitration (“2nd arbitration”). Hancock’s appointee to th
