Language providing a means of resolving differences between the reinsurer and the reinsured without litigation. Usually, each party appoints and arbiter. The two thus appointed select a third arbiter, or umpire, and a majority decision of the three becomes binding on the parties to the arbitration proceedings.
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UK: A policy condition that commits the insured and the insurer to use arbitration as a means of settling disputes as to the amount of a claim liability otherwise being admitted. The clause does not appear in liability policies.
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A provision found in reinsurance contracts whereby the parties agree to submit their disputes to a non-judicial adjudication panel rather than a court of law, generally subject to selection criteria and procedures set out in the clause. The arbitration panel produces an award, ultimately enforceable by a court of law, binding both parties.
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The clause in an insurance policy that spells out how disagreements over a claim are settled. Generally, each party chooses an arbiter the arbiters agree on an umpire and these three agree on a resolution of the dispute. Under some clauses, an unsatisfied party may have the option to seek judicial relief following an arbitration finding.