A Florida appellate court has upheld a ruling by the state Office of Insurance Regulation that bars an insurer from including a mandatory arbitration clause in its life insurance contracts.
The Florida 1st District Court of Appeal says state law provides policyholders with a civil recourse for disputes.
“Mandatory binding arbitration lacks the procedural and constitutional protections” that a civil action provides, the court says.
United Insurance Company of America, a unit of Unitrin Inc., Chicago, tried to put a mandatory arbitration provision in its policies.
When the Florida regulators rejected the provision, the company went to court to appeal the decision.