American Worldwide Insurance Inc. has won a court case that is helping it collect back commissions from a Midwestern life insurer.[@@]

A U.S. District Court judge in Indiana has declined to overturn a December 2004 decision by an arbitration panel in Chicago.

The arbitrators found that Conseco Life Insurance Company, a unit of Conseco Inc., Carmel, Ind., owed American Worldwide, St. Louis, $4.2 million in back commission payments.

American Worldwide’s contract with Conseco Life required American Worldwide to resolve any disputes in arbitration. Some critics of mandatory arbitration provisions argue that they strip the parties involved of many of the legal tools available in court proceedings.

Todd Green, owner of American Worldwide, has welcomed the Indiana court’s decision to uphold the Chicago arbitration decision.

The new ruling”will severely narrow the ability for either party to challenge the arbitrator’s decision,” Green says in a statement.

Conseco says it will not appeal the American Worldwide ruling.

“We have elected not to make a further appeal on this matter,” the company says in a statement. “We have settled with the plaintiff and obtained a full release. As noted in our prior [U.S. Securities and Exchange Commission] filings, we have already reserved for the financial impact of this case.”

American Worldwide began working in 1994 to set up a network of agents to help Conseco Life services life insurance policies. Conseco Life eventually canceled its contract with American Worldwide but kept the contracts with the agents American Worldwide had recruited, according to American Worldwide.

American Worldwide ended up filing an arbitration claim against Conseco Life because of Conseco Life’s decision to keep the agent contracts while terminating its relationship with American Worldwide, according to American Worldwide.