New York: Insurance Carrier Cannot Compel Arbitration of Insureds’ Disputes When Arbitration Agreements Not Approved by Calif. Dept. of Insurance

A divided New York appellate court held that three insureds (employers) could not be compelled to arbitrate their disputes with their workers’ compensation insurance carrier where that carrier had failed to file the arbitration agreements, contained in side agreements to the insurance policies, with the California Department of Insurance as required by California law.  The majority of the court found that in light of the strong policy under California law of regulating insurance carriers and their agreements with their insureds, the side agreements, must go through the same sort of approval process as the policies themselves.  The insurance carrier argued that the payment agreements in question were neither policies nor endorsements and, therefore, need not be filed in California.  It also argued that strong public policy favored arbitration of disputes.  The majority was unconvinced.  The majority also held that due to the McCarran-Ferguson Act, the state law was not pre-empted by the Federal Arbitration Act.

Thomas A. Robinson, J.D., the Feature National Columnist for the LexisNexis Workers’ Compensation eNewsletter, is a leading commentator and expert on the law of workers’ compensation.

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See Monarch Consulting, Inc. v. National Union Fire Ins. Co., 2014 N.Y. App. Div. LEXIS 6073 (Sept. 11, 2014)  [2014 N.Y. App. Div. LEXIS 6073 (Sept. 11, 2014)]

See generally Larson’s Workers’ Compensation Law, § 152.03 [152.03]Source: Larson’s Workers’ Compensation Law, the nation’s leading authority on workers’ compensation law.