In some states, recipients may raise claims within or outside the vehicle right, including reinsurance decisions. In other states, the procedure for receiving either party's ability to place a reinsurance right outside the liquidation court is terminated. In a later case, a beneficiary of an insolvent cedar initiated a reinsurance decree outside the claim. The reinsurance brought counterclaims and an award was issued in favor of the reinsurer against the insolvent creditor. When the insurer attempted to confirm the award, the recipient moved to reject and claimed that the court did not have the authority to decide on a confirmation request. The court disagreed with the recipient. Catalina Holdings (Bermuda) Limited to Hammer No. 18 CV 5642, 2019 U.S. Pat. Dist. LEXIS 47783 (N.D., March 22, 2019), Illinois Insurance Director, after more than 10 years, sends the reinsurer a commutation budget to settle the balance between the insolvent creditor and the subsequent reinsurer. The reinsurer refused to pay and the director demanded arbitration. The reinsurer claimed for unpaid premiums and attorneys' fees and expenses. An arbitration hearing was held and an award was issued in favor of the reinsurer for amounts to be offset against future receivables billed by the director or qualifying as a distribution under Illinois liquidation rules.
After receiving a favorable award, the reinsurer revoked the federal court to confirm the award under federal arbitration ("FAA") and the Convention on the Recognition and Enforcement of Foreign Arbitration ("New York Convention"). Although the director had begun a private arbitration, the director was moved to reject the petition to confirm, claiming that the Illinois Insurance Law, by the McCarran-Ferguson Act, reversed the court's ability to hear the petition to confirm.
When denying the proposal to reject, the court rejected each director's argument and found that the court had jurisdiction to hear the petition to confirm. The court argued that it had independent federal jurisdiction under the New York Convention (the subsequent reinsurer was a United Kingdom and Liquidator citizen or the Illinois citizen) and the diversity of citizenship. The court rejected the opposite argument on conciliation, and finding that it confirms an arbitration does not require the court to interpret any federal law in a way that invalidates, undermines or replaces any state law. In particular, the Court pointed out that "he seems to have thought there was no contradiction in raising a claim that would ultimately be dealt with in the liquidation court until the panel ruled in Catalina's service".
Since the award had already decided on liability and damage, and had already completed the reinsurance application, the court claimed that the confirmation of the price would not disturb and was actually compatible with the winding-up proceedings. The court rejected the argument that the FAA or the New York Convention opposed McCarran-Ferguson, since neither would invalidate, impair or replace Illinois insurance laws. The court also noted that the Court did not confirm the award to determine the priority of the reinsurance application or otherwise with Illinois insurance or liquidation laws. All the court has to do was confirm or lead the price and with that decision the director was free to go ahead with the liquidation court that they suited.