Mandatory Arbitration Provision Did Not Apply When Cedent Entered Rehabilitation

In re Rehab. Of: Segregated Account of Ambac Assur. Corp. (Wis. Ct. App.; October 24, 2013)

The Wisconsin Court of Appeals affirmed a circuit court’s order enforcing an injunction against a reinsurer that was issued during the course of a Chapter 645 proceeding to rehabilitate a segregated account. Although arbitration provisions in reinsurance contracts are widelyenforceable, this case illustrates one of the rare circumstances where an arbitration provision does not apply. When an insurer is in rehabilitation, an arbitration provision in the insurer’s reinsurance contract may not be enforceable.