Reinsurance Focus

Trustmark Ins. Co. filed an action against John Hancock Life Ins. after the parties arbitrated one reinsurance dispute and had begun a separate arbitration of another reinsurance dispute. Trustmark sought a preliminary injunction barring the parties from proceeding with the second arbitration with Hancock’s appointed arbitrator on the panel. Trustmark argued that Hancock’s choice of arbitrator in the second arbitration – the same person who served as Hancock’s chosen arbitrator in the first arbitration – resulted in: (1) that arbitrator’s breach of the confidentiality agreement that the parties and arbitrators in the first arbitration had signed; and (2) an inherent conflict of interest by that arbitrator who was being asked to interpret the confidentiality agreement to which he was a signatory (and which he allegedly breached), and who was also being asked to consider the extent to which issues in the second arbitration had been resolved in the first arbitration. The Court agreed with Trustmark, noting that the arbitrator had breached the confidentiality agreement by discussing matters pertaining to the first arbitration with the other panel members in the second arbitration (who were not parties to the confidentiality agreement). The Court also noted that Trustmark’s arbitrator violated a court order, in that the previous arbitration award and the confidentiality agreement entered into in connection therewith had been confirmed by Court Order. In a separate decision released simultaneously with its memorandum granting Trustmark’s preliminary injunction, the Court addressed additional issues raised in a motion for reconsideration by Hancock, but reaffirmed its prior ruling. Trustmark Ins. Co. v. John Hancock Life Ins. Co., No. 09-c-3959 (N.D. Ill. Jan. 21, 2010)

This post written by John Pitblado.