ARBITRATION TASK FORCE ARIASU.S Spring Conference May 2013

The ATF was formed in the Spring of 2012 to explore improvements to the arbitration process. Some areas of focus are: –Examining the potential use of Neutral Panels –Considering the use of mediation during the arbitration process –Recapturing streamlined past practices – Exploring whether an arbitration appeal procedure should be offered In addition to these four areas, the Task Force will also explore other ideas to improve the process. 2 Arbitration Task Force Status Report

Progress Report This is a Progress Report on five ATF ideas generated to date. These ATF ideas are preliminary and have not been approved by or formally presented to the Board of Directors of ARIASU.S. These ATF ideas were presented at the Fall Meeting in December The ATF has conducted two town halls to solicit input from the membership regarding its ideas Additional membership input on these ATF ideas is being sought before presenting or proposing them to the Board While no additional town halls are anticipated, you can send in your comments to The ATF plans to make its formal recommendation regarding the ATF ideas to the Board by the end of June,

Current ARIAS-US Neutral Arbitration Panel Selection Process Neutral Panel Selection: –Objective: To provide for the neutral selection of an arbitration panel that will minimize the level of perceived bias inherent in utilizing party-appointed arbitrators –Procedure is not intended, and certainly cannot be guaranteed, to produce panel members with “neutral” mind sets The current process has been rarely used by the ARIAS-US membership 4

ATF Idea #1: Neutral Arbitration Process Perceived deficiencies with respect to the existing Arbitration Process: –Bias of Arbitrators/Umpires –Perceptions of gamesmanship –Arbitrators as advocates –Result may be determined by coin flip –High cost of proceedings 5

ATF Idea #1: Neutral Arbitration Process- con’t International standard outside US is neutrality. Provide neutral option for parties to ARIAS arbitration proceedings. Restore confidence in the arbitration process. Continue to maintain position of ARIAS as leader in industry with respect to the reinsurance arbitration process. Will not disrupt existing arbitration process, but merely provide a neutral option for the parties that choose to utilize it. 6

ATF Idea #2: Private Appeal Process Greater confidence in ultimate result of arbitral proceeding. Opportunity to provide for private appellate review process with industry experts. Additional value that ARIAS can bring to the arbitral process should the parties choose to avail themselves of it. 7

ATF Idea #2 Exists in Other Organizations Organizations Providing for a Private Appeal Process: –Judicial Arbitration and Mediation Service (“JAMS”) – optional arbitration appeals procedures –International Institute for Conflict Prevention and Resolution (“CPR”) – arbitration appeal procedure –American Arbitration Association (“AAA”) – Private appeals procedure re NY “no-fault” insurance law 8

ATF Idea #2: Private Appeal Considerations to Explore If provided, parties would have to contractually agree to utilize. Additional service to be provided by ARIAS to members and parties that choose to utilize. Parties or members concerned that a Private Appellate Process would unnecessarily lengthen proceedings or increase the cost of proceedings, could choose not to utilize. 9

Explore updating the ARIAS-US Practical Guide to outline a best practice for arbitration panels to suggest mediation at appropriate junctures within the arbitration schedule. The arbitration panel would not be required or encouraged to mandate mediation in the absence of party agreement or disclosure of any information during the mediation process. The Parties alone would have the authority to select a mediator; if they cannot reach agreement on mediator selection, they could utilize ARIAS-US qualified mediator list and adopt the selection process. At ARIAS-US conferences, educational mock mediations could be offered to demonstrate how mediation can be effective in arbitration proceedings. 10 ATF Idea #3: Use of Mediation During Arbitration

ATF Idea #4: Conversion of ARIAS-US Practical Guide Explore converting the ARIAS-US Practical Guide into “ARIAS-US Rules and Procedures,” to which parties may bind themselves by agreement. Such new Rules and Procedures may include: –Sample Arbitration Clauses –Concrete panel selection rules, including the option of electing neutral panels –A uniform format for the initial organizational meeting and conduct of proceedings that all ARIAS-US arbitrators would follow –Procedures for mediation of disputes during the arbitration process (as discussed earlier in this deck) –A timeframe for the panel to issue an award –An optional procedure for parties to have a separate panel of neutral arbitrators review the original panel’s award before it becomes final 11

The Sub-Committee is evaluating a series of programs designed to increase active industry executive participation in the dispute resolution process. ARIAS*US Industry Outreach – obtain senior management commitment to the importance of active executive involvement in the dispute resolution process. ARIAS*US Guidance Panels – foster the amicable resolution of disputes by creating an optional process for submitting a dispute to a panel of active industry executives on a no-names basis to obtain guidance on resolution based on current, prevailing industry custom and practice. Industry Mediation – engage active industry executives to act as mediators in routine and smaller disputes to enhance the likelihood of “business solutions to business disputes.” 12 ATF Idea #5: Recapturing Desirable Past Practices

ATF Idea #5: Desirable Past Practices: Streamlined Procedures Considering a set of comprehensive procedures to be followed in all matters, unless the parties specifically agree otherwise, where the amount in dispute is less than $2M, with the goal of: –Reducing costs and delays –Enhancing the efficiency of the process Procedures under consideration include specific scheduling parameters and timetables, as well as limitations on: –Briefing –Document and deposition discovery –Motion practice –Use of expert witnesses Considering whether to further streamline procedures for matters involving amounts in controversy of less than $500,