Arbitration

Any dispute or other matter in question between the Company and the Reinsurer arising out of, or relating to, the formation, interpretation, performance, or breach of this Contract, whether such dispute arises before or after termination of this Contract, shall be settled by arbitration.  Arbitration shall be initiated by the delivery of a written notice of demand for arbitration by one party to the other within a reasonable time after the dispute has arisen.

If more than one reinsurer is involved in the same dispute, all such reinsurers shall constitute and act as one party for the purposes of this Article, provided, however, that nothing herein shall impair the rights of such reinsurers to assert several, rather than joint, defenses or claims, nor be construed as changing the liability of the Reinsurer under the terms of this Contract from several to joint.

Each party shall appoint an individual as arbitrator and the two so appointed shall then appoint a third arbitrator.  If either party refuses or neglects to appoint an arbitrator within sixty (60) days, the other party may appoint the second arbitrator.  If the two arbitrators do not agree on a third arbitrator within sixty (60) days of their appointment, each of the arbitrators shall nominate three individuals.  Each arbitrator shall then decline two of the nominations presented by the other arbitrator.  The third arbitrator shall then be chosen from the remaining two nominations by drawing lots.  The arbitrators shall be active or retired officers of insurance or reinsurance companies or Lloyd's London Underwriters; the arbitrators shall not have a personal or financial interest in the result of the arbitration.

The arbitration hearings shall be held in  (City,   State), or such other place as may be mutually agreed.  Each party shall submit its case to the arbitrators within sixty (60) days of the selection of the third arbitrator or within such longer period as may be agreed by the arbitrators.  The arbitrators shall not be obliged to follow judicial formalities or the rules of evidence except to the extent required by governing law, that is, the state law of the situs of the arbitration as herein agreed; they shall make their decisions according to the practice of the reinsurance business.  The decision rendered by a majority of the arbitrators shall be final and binding on both parties.  Such decision shall be a condition precedent to any right of legal action arising out of the arbitrated dispute which either party may have against the other.  Judgment upon the award rendered may be entered in any court having jurisdiction thereof.

Each party shall pay the fee and expenses of its own arbitrator and one-half of the fee and expenses of the third arbitrator. All other expenses of the arbitration shall be equally divided between the parties.  Except as provided above, arbitration shall be based, insofar as applicable, upon the procedures of the American Arbitration Association.

Courtesy: Brokers & Reinsurance Markets Association.  BRMA has published this Clause and other reference materials on its Website with the following Disclaimer.

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