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Press Release

Florida Insurance Commissioner McCarty Praises Court’s Decision Prohibiting the Use of Mandatory Arbitration in Life Insurance Contracts
Wednesday, July 23, 2008
Contact Info:

Ed Domansky 
850-413-2515                                                  
Edward.Domansky@floir.com

TALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty welcomed the First District Court of Appeal’s decision affirming the Office of Insurance Regulation’s (Office) denial of United Insurance Company of America’s (United) request to include a mandatory arbitration clause in its life insurance contracts.
 
Arbitration would have forced disgruntled policyholders to bypass the legal system to settle disagreements. United appealed the Office’s action and the Court affirmed the denial.
 
“Policyholders have fewer rights and constitutional protections under the more restrictive arbitration process than they would have in a civil court proceeding,” said Commissioner McCarty. “I’m pleased that the Court made it clear that Florida consumers should not be shut out of the traditional legal system to press their grievances against insurance companies.”
Although United argued that federal arbitration law superseded the Florida law that allows policyholders to use the courts for contractual disputes; the Court found that this matter “specifically relates to the business of insurance” and is, therefore, exempt from being superseded by federal law.
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Contact Info:

Ed Domansky 
850-413-2515                                                  
Edward.Domansky@floir.com

About the Florida Office of Insurance Regulation
The Florida Office of Insurance Regulation (Office) has primary responsibility for regulation, compliance and enforcement of statutes related to the business of insurance and the monitoring of industry markets. For more information about the Office, please visit www.floir.com or follow us on Twitter @FLOIR_comm.

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