COURT HOLDS DISPUTE OVER SETTLEMENT OF DISPUTES UNDER REINSURANCE ADMINISTRATION AGREEMENT ARBITRABLE
Trustmark Insurance and American General Assurance entered into a Reinsurance Administration Agreement with Transamerica Occidental Life Insurance, pursuant to which Transamerica provided administration services. Trustmark cancelled the Agreement, and a dispute arose as to Transamerica’s performance of the Agreement and whether it was entitled to further payments for services that it had provided pursuant to the Agreement. Trustmark and Transamerica reached a “settlement” of the dispute, which later fell apart. There was no written settlement agreement, and although the Agreement contained an arbitration provision, no party sought arbitration of the dispute under the Agreement.
Trustmark sued Transamerica, seeking to compel performance of the settlement agreement. Transamerica moved to compel arbitration. The District Court held that even though there was no written settlement agreement, the arbitration provision of the Reinsurance Administration Agreement covered any dispute “relating to” the parties’ performance of the Agreement, including Transamerica’s claim for further payments under the Agreement. The court therefore compelled arbitration of the substance of the dispute that was covered by the “settlement agreement.” Trustmark Insurance Co. v. Transamerica Occidental Life Insurance Co., Case No. 06-5561 (N.D.Ill. May 1, 2007).
