Reinsurance Broker Not Obligated to Pay Annual Fee, 8th Cir. Affirms

MINNEAPOLIS - An insurer's former reinsurance broker is not obligated to pay an "annual fee" to the insurer because the parties' contract included a "forfeiture provision," which relieved the broker of paying the fee if it is terminated or replaced, the 8th Circuit U.S. Court of Appeals has affirmed.

On April 1, the appellate court rejected Olympus Insurance Co.'s assertion that AON Benfield Inc. was required to pay a fee for the first fiscal year, ruling that the forfeiture provision cannot be interpreted as such.

In June 2008, Olympus appointed AON Benfield Inc. to act as its reinsurance broker for …