PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 17-2385

MINNIELAND PRIVATE DAY SCHOOL, INC., a Virginia corporation,

Plaintiff - Appellee,

v.

APPLIED UNDERWRITERS CAPTIVE RISK ASSURANCE COMPANY, INC.,

Defendant - Appellant.

Appeal from the United States District Court for the Eastern District of Virginia, at 

Alexandria. Anthony John Trenga, District Judge. (1:15-cv-01695-AJT-IDD)

Argued: October 30, 2018 Decided: January 14, 2019

Before GREGORY, Chief Judge, MOTZ, and WYNN, Circuit Judges.

Affirmed by published opinion. Chief Judge Gregory wrote the opinion, in which Judge 

Motz and Judge Wynn joined.

ARGUED: Daniel William Olivas, LEWIS, THOMASON, KING, KRIEG & 

WALDROP, P.C., Nashville, Tennessee, for Appellant. James Scott Krein, KREIN 

LAW FRIM, Prince William, Virginia, for Appellee. ON BRIEF: R. Dale Bay, 

Ryan N. Clark, LEWIS, THOMASON, KING, KRIEG & WALDROP, P.C., Nashville, 

Tennessee, for Appellant.
2

GREGORY, Chief Judge:

Appellant Applied Underwriters Captive Risk Assurance Company, Inc. 

(“AUCRA”) comes to us for the second time in this case, appealing the district court’s 

determination that a Reinsurance Participation Agreement (“RPA”) executed by it and 

Appellee Minnieland Private Day School is an insurance contract under Virginia law. 

The RPA, executed in connection with Minnieland’s purchase of workers’ compensation 

insurance, contains an arbitration clause. In the district court, AUCRA moved to compel 

arbitration in accordance with the RPA’s terms. In opposing arbitration, Minnieland 

asserted that the RPA is an insurance contract for purposes of Virginia Code § 38.2–312, 

which renders void arbitration clauses contained in insurance contracts. The district court 

denied AUCRA’s motion to compel arbitration, finding that AUCRA was judicially 

estopped from arguing that the RPA is not an insurance contract. We reversed that 

determination, concluding that AUCRA was not estopped from making its argument, and 

remanded to allow the parties to brief fully the issue of whether the RPA is an insurance 

contract for purposes of Virginia Code § 38.2–312. On remand, the district court held 

that the RPA is indeed an insurance contract and that the RPA’s arbitration clause is void 

as a matter of law. AUCRA now appeals that determination.

For the reasons set forth below, we conclude that the RPA is an insurance contract 

for purposes of Virginia Code § 38.2–312. We therefore affirm.
3

I.

A.

This case involves a workers’ compensation insurance program that Minnieland 

purchased from AUCRA and its affiliated entities. Under Virginia law, workers’ 

compensation insurance is “insurance against the legal liability of any employer for the 

death or disablement of, or injury to, his or its employee whether imposed by common 

law or by statute, or assumed by contract.” Va. Code § 38.2–119. Workers’ 

compensation insurance coverage is required of “[e]very employer subject to” Virginia’s 

workers’ compensation statute. Va. Code § 65.2–800(A); Redifer v. Chester, 720 S.E.2d 

66, 67–68 (Va. 2012).

In general, workers’ compensation insurance is typically provided in one of two 

types of policies: a guaranteed cost policy or a retrospective rating plan. Under a 

guaranteed cost policy, the premiums are fixed and usually do not change over the term 

of the policy. Steven Plitt, Daniel Maldonado, Joshua D. Rogers, & Jordan R. Plitt, 2 

Couch on Insurance § 69:10 (3d ed. 1995). In many states, these plans are the only plans 

lawfully available to small and mid-sized employers. Retrospective rating plans, on the 

other hand, usually require an advance premium deposit with the insurer and then provide 

that the insurer, at some specified time, will compute the actual premium based on the 

insured’s actual loss experience or total payroll during a set period of time. Id. § 69:16; 

see Va. Code § 38.2–1901 (defining “retrospective rating plan” as “a rating plan that 

adjusts the premium for the insurance to which it applies on the basis of losses incurred 

during the period covered by that insurance”). The insured is then either issued a refund 
4

if the actual premium is lower than the premium deposit paid or required to pay the 

difference if the actual premium exceeds the deposited amount.

At issue in this appeal is Applied Underwriters, Inc.’s EquityComp program, an 

innovative program of workers’ compensation insurance that offers small and mid-sized 

employers the benefits of both a guaranteed cost policy and a retrospective rating plan in 

one insurance program. The EquityComp program provides employers with guaranteed 

cost workers’ compensation insurance at the same time that they enjoy the benefits—and 

are subject to the risks—of a retrospective rating plan. See J.A. 404 (explaining that this

RPA allows small and mid-sized employers to “in effect, have a retrospective rating plan 

. . . even though, in fact, the insured has Guaranteed Cost insurance coverage with the 

insurance carrier”).1 The program is so novel that it has been patented.

Under the program, various insurance companies affiliated with Applied 

Underwriters, Inc. have entered into a reinsurance pooling agreement. The pooled 

companies provide workers’ compensation insurance coverage to employers and also 

mutually reinsure each other’s insurance business. A layer of reinsurance is also 

provided by AUCRA, a wholly owned subsidiary of Applied Underwriters, Inc. AUCRA 

in turn enters into RPAs with EquityComp customers, under the terms of which each 

customer pays into a segregated “cell” or account that is then used to fund AUCRA’s 

liabilities. In essence, EquityComp customers participate in underwriting the risk of their 

own workers’ compensation insurance policies.

 1 Citations to the “J.A.” refer to the Joint Appendix filed by the parties in this 

appeal.
5

In theory, an EquityComp customer can save costs on its workers’ compensation 

insurance through a refund of monies deposited into its segregated cell if its workers’ 

compensation insurance claims are kept low during the term of the RPA. As detailed 

below, however, Minnieland was unable to reap this benefit.

B.

Minnieland provides education and childcare services in Virginia and is subject to 

the workers’ compensation laws and requirements of the state. Va. Code § 65.2–800(A).

On January 14, 2013, Minnieland bought into the EquityComp program. 

Minnieland executed a Request to Bind Coverages and Services (“Binder”), by which 

Minnieland “request[ed] that Applied Underwriters, Inc. through its affiliates and/or 

subsidiaries . . . cause to be issued to [Minnieland] one or more workers’ compensation 

insurance policies . . . subject to [Minnieland] executing the . . . [RPA].” J.A. 40. At the 

same time, Minnieland executed an RPA. The RPA had a term of three years and 

provided that one or more “Issuing Insurers”—all of which were entities affiliated with 

Applied Underwriters, Inc.—would issue workers’ compensation insurance policies to 

Minnieland. The RPA also established that Minnieland would share in the profits and 

losses associated with its policies through its “segregated protected cell.” Applied Risk 

Services, Inc. (“ARS”), another subsidiary of Applied Underwriters, Inc., was designated 

as the billing agent for both AUCRA and the Issuing Insurers. Schedule 1 of the RPA 

sets forth various formulae for calculating premiums and losses under the RPA and 

insurance policies.
6

The day after Minnieland executed the EquityComp documents, the RPA went 

into effect, as did the first of what would become three consecutive one-year Virginia 

workers’ compensation insurance policies, the last of which was to expire on January 15, 

2016. The first policy listed the estimated annual premium as $589,163. The second and 

third policies listed the estimated annual premiums as $642,333 and $706,160, 

respectively. The policies were produced by ARS and insured by Continental Indemnity 

Company (“CNI”), another affiliate of Applied Underwriters, Inc.

According to the complaint, at no time was AUCRA licensed to sell insurance in 

Virginia, and the RPA has not been approved by the Virginia Workers’ Compensation 

Commission.

For the first 33 of the 36 months during which the RPA was active, AUCRA 

charged, and Minnieland paid, an average of $58,810 per month in premiums. In 

November 2015, however, the premium charged to Minnieland increased drastically to

$471,213, a 1167% increase from the October 2015 premium and a 801% increase over 

the first 33 months’ average. Despite Minnieland’s requests, AUCRA refused to disclose 

the basis on which it assessed the November 2015 premium. Minnieland nonetheless 

paid the November premium.

AUCRA billed Minnieland a similarly high premium of $414,604 for December 

2015. AUCRA once again refused to disclose the basis for the increased premium, and

Minnieland did not pay the December premium.
7

On December 16, 2015, AUCRA2 faxed Minnieland notice that it was terminating 

Minnieland’s EquityComp program, including the RPA and insurance coverage, effective 

December 27, 2015. The reason provided for the termination of coverage was “NonPayment of Premium; Client has an outstanding balance.”

C.

On December 24, 2015, Minnieland filed suit against AUCRA in the Eastern 

District of Virginia. Minnieland alleged that AUCRA is not authorized or licensed to act 

as an insurance company under Virginia law; that the RPA is an “insurance contract” and 

not a “reinsurance” agreement; and that AUCRA misrepresented the EquityComp 

program, and the RPA specifically, to circumvent Virginia insurance and workers’ 

compensation laws. Minnieland sought (1) a declaration that the RPA constitutes an 

insurance contract and is void because of AUCRA’s failure to comply with Virginia law; 

(2) a declaration of the amount, if any, that Minnieland owes under the RPA; and (3) a 

declaration that the premiums, deposits, and charges assessed to Minnieland by AUCRA 

were excessive. Minnieland also sought damages for fraud and breach of contract.

On January 18, 2016, AUCRA filed a demand for arbitration with the American 

Arbitration Association, invoking the RPA’s arbitration provisions. That demand sought 

payment from Minnieland of a total of $342,358 that AUCRA claimed it was owed under 

the RPA and EquityComp program.

 2 The complaint alleges that AUCRA sent the notice. The letter is printed on 

“Applied Underwriters” letterhead and does not specify if the sender is AUCRA or 

Applied Underwriters, Inc. J.A. 52. The document attached to the letter indicates that it 

was “produced by” ARS. J.A. 53.
8

AUCRA also moved the district court to dismiss Minnieland’s complaint and 

compel arbitration under the RPA’s arbitration clause. In opposing the motion to compel 

arbitration, Minnieland argued that the RPA is an insurance contract. As such, 

Minnieland argued, the arbitration clause is void because it is prohibited by Virginia 

Code § 38.2–312.

On March 17, 2016, the district court granted in part and denied in part AUCRA’s

motion. The district court determined that the RPA’s arbitration clause calls for 

arbitration of the threshold question of whether the RPA is an insurance contract such 

that Virginia’s insurance statute, which reverse-preempts the Federal Arbitration Act 

(“FAA”), applies. Accordingly, the court ordered the parties to submit that question to 

the arbitrator.

A week later, the district court granted Minnieland’s motion for reconsideration of 

the court’s March 17, 2016 order. The district court again concluded that the threshold 

issue of arbitrability was for the arbitrator to determine. The district court nonetheless 

stayed its March 17 order and requested supplemental briefing on Minnieland’s 

contention that AUCRA was judicially estopped from arguing that the RPA is not an 

insurance contract.

The parties briefed the judicial estoppel issue, and the district court heard 

argument on AUCRA’s motion to compel arbitration. The district court denied the 

motion to compel, concluding that the four elements of judicial estoppel were met such

that AUCRA was estopped from arguing that the RPA is not an insurance contract. See 
9

Lowery v. Stovall, 92 F.3d 219, 223–24 (4th Cir. 1996) (discussing the elements of 

judicial estoppel).

AUCRA appealed that order. On appeal, we affirmed in part and reversed in part. 

Minnieland Private Day Sch., Inc. v. Applied Underwriters Captive Risk Assurance Co., 

Inc., 867 F.3d 449 (4th Cir. 2017), cert. denied, 138 S. Ct. 926 (2018). We concluded 

that Virginia Code § 38.2–312 “renders invalid delegation provisions in putative 

insurance contracts governed by Virginia law, at least to the extent such delegation 

provisions endow an arbitrator, as opposed to a court, with exclusive authority to 

determine whether the contract at issue constitutes an ‘insurance contract’ for purposes of 

Virginia law.” Id. at 456. Therefore, we affirmed the district court’s denial of the motion 

to compel arbitration. Id. at 457. We also concluded that AUCRA was not judicially 

estopped from arguing that the RPA is not an insurance contract under Virginia law. Id.

at 458–59. Because the parties had not had the opportunity to brief fully the issue of 

whether the RPA is an insurance contract under Virginia law, we remanded the matter to 

the district court. Id. at 459.

On remand, the district court ruled in an oral opinion that the RPA is an insurance 

contract. As the district court explained:

Under this arrangement, Minnieland and AUCRA 

entered into a contract as a result of which Minnieland 

received workmen’s compensation coverage through an 

insurance policy in exchange for premiums that were paid for 

that coverage.

AUCRA’s position rests entirely on parsing this 

transaction to the point of being completely disassociated 

with the realities of the overall transaction. So the Court 
10

concludes that it’s an insurance contract for the purposes of 

38.2–312 as the Fourth Circuit has already determined.3

J.A. 1073–74. Accordingly, the district court denied the motion to compel arbitration, 

finding that “any arbitration provisions pertaining to any disputes under [the RPA] are 

void.” J.A. 1074.

AUCRA appeals the district court’s denial of its motion to compel arbitration.

II.

We review de novo a district court’s order denying a motion to compel arbitration 

under the FAA. Noohi v. Toll Bros., Inc., 708 F.3d 599, 605 (4th Cir. 2013). “At the 

same time, we give due regard to the federal policy favoring arbitration and resolve ‘any 

doubts concerning the scope of arbitrable issues . . . in favor of arbitration.’” Hill v. 

Peoplesoft USA, Inc., 412 F.3d 540, 543 (4th Cir. 2005) (citation omitted).

In determining whether a dispute is arbitrable, we “apply ordinary state-law 

principles that govern the formation of contracts and the federal substantive law of 

arbitrability.” Id. (internal citations and quotation marks omitted). Because this matter 

 3 In our prior opinion, we did not determine that the RPA is in fact an insurance 

contract. Rather, we affirmed the district court’s denial of AUCRA’s motion to compel 

arbitration on the grounds that Virginia Code § 38.2–312 “renders void delegation 

provisions in putative insurance contracts—at least to the extent such provisions 

authorize an arbitrator to resolve whether the contract at issue constitutes an ‘insurance 

contract.’” Minnieland, 867 F.3d at 457. Recognizing that the parties had not had the 

opportunity to brief and argue the issue of whether the RPA is an insurance contract 

under Virginia law, we remanded this matter to the district court for consideration of that 

issue.
11

involves the question of whether the RPA is an insurance contract for purposes of the 

Virginia Code, we look to Virginia law, which the parties agree applies in this case.4

III.

A.

We begin by addressing AUCRA’s argument that the district court ignored this 

Court’s “narrow” mandate and improperly considered the entire program of workers’ 

compensation insurance—rather than only the RPA—in determining that the RPA is an 

insurance contract under Virginia law. Opening Br. 23–26. AUCRA points out that the 

complaint names only AUCRA as a defendant, not CNI (the policy issuer), Applied 

Underwriters, Inc. (the parent company), or Applied Risk Services (the billing agent). Id.

at 25 (citing J.A. 1). AUCRA also relies on the fact that Minnieland’s claims are 

predicated on the RPA alone. Id. (citing J.A. 11–22). In light of this narrow focus of 

Minnieland’s suit and our “narrow mandate” to determine whether “the RPA is an 

insurance contract under Virginia law,” AUCRA asserts that the district court should 

 4 We note that the RPA provides that it “shall be exclusively governed by and 

construed in accordance with the laws of Nebraska and any matter concerning this 

Agreement that is not subject to [arbitration] shall be resolved exclusively by the courts 

of Nebraska without reference to its conflict of laws.” J.A. 34 (§ 16). The question of 

whether the contract itself is an insurance contract for purposes of Virginia Code § 38.2–

312, however, is a matter of Virginia law, and both parties brief the issue on appeal under 

Virginia law. See, e.g., Opening Br. 28–34; Resp. Br. 13, 18–22. Because the parties 

agree that Virginia law applies, we need not inquire further into the choice-of-law 

questions, and Virginia law controls the analysis. Cosey v. Prudential Ins. Co. of Am., 

735 F.3d 161, 169 n.7 (4th Cir. 2013) (citing Am. Fuel Corp. v. Utah Energy Dev. Co., 

122 F.3d 130, 134 (2d Cir. 1997)). We also note that AUCRA has not invoked the 

RPA’s forum selection clause.
12

have considered only the RPA, not the workers’ compensation insurance transaction as a 

whole. Id. at 25–26.

Nothing in our prior opinion suggests that we intended to preclude any evaluation 

of whether the RPA’s terms are the complete terms of the parties’ agreement or whether 

the RPA’s terms should be construed as integrated with the terms of the other 

EquityComp agreements. Our mandate was indeed limited to the RPA. However, on the 

previous appeal, we were concerned only with the RPA because the RPA contains the 

arbitration provision at issue. Because we remanded for consideration of whether the 

RPA is an “insurance contract” under Virginia law, the district court was faced with the 

initial question of whether the RPA is in fact a standalone contract or is simply one part 

of an integrated contract. See Hitachi Credit Am. Corp. v. Signet Bank, 166 F.3d 614, 

626 (4th Cir. 1999) (“A contract may be contained in several instruments, and they may 

be read together as one instrument [i]f made at the same time and in relation to the same 

subject matter.” (alteration in original) (internal citations and quotation marks omitted)).

Only after the court made that threshold determination could it then determine the nature 

of the contract. Therefore, the district court did not ignore our previous mandate by 

looking at the EquityComp program as a whole.

B.

1.

Having concluded that the district court did not violate our prior mandate, we turn 

to the issue at the heart of this appeal: whether the RPA is an insurance contract for 

purposes of Virginia Code § 38.2–312. Under Virginia law, “[w]here two papers are 
13

executed at the same time or contemporaneously between the same parties, in reference 

to the same subject matter, they must be regarded as parts of one transaction, and receive 

the same construction as if their several provisions were in one and the same instrument.” 

Countryside Orthopaedics, P.C. v. Peyton, 541 S.E.2d 279, 284 (Va. 2001) (alteration in 

original) (citations omitted). “To construe two instruments as one, reference in one 

instrument to the other need not be explicit; ‘it is sufficient if it is fairly traceable.’” 

Hitachi Credit, 166 F.3d at 626 (quoting Tex. Co. v. Northup, 153 S.E. 659, 662 (Va. 

1930)). While “a court is not required to construe two documents as one contract just 

because they are executed at the same time and concern the same subject matter[,] [t]he 

court must give effect to the intent of the parties.” Id. (citing Am. Realty Tr. v. Chase 

Manhattan Bank, N.A., 281 S.E.2d 825, 831 (Va. 1981)).

The Virginia courts have yet to address whether a contract similar to the RPA, 

executed during an insurance transaction, comprises part of the insurance contract. The 

Virginia Supreme Court, however, has taken a rather expansive view of what constitutes 

a single integrated contract. In Daugherty v. Diment, the Virginia Supreme Court made 

clear that, “[w]here a business transaction is based upon more than one document 

executed by the parties, the documents will be construed together to determine the intent 

of the parties; each document will be employed to ascertain the meaning intended to be 

expressed by the others.” 385 S.E.2d 572, 574 (Va. 1989) (citing Am. Realty Tr., 281 

S.E.2d at 830).

The Virginia Supreme Court has since applied Daugherty’s rule regularly to 

transactions involving multiple written agreements. In Musselman v. Glass Works, LLC, 
14

for example, the Virginia Supreme Court held that an asset purchase agreement and a 

non-competition agreement executed at the same time “formed an integrated business 

transaction.” 533 S.E.2d 919, 921 (Va. 2000). The purchase agreement provided that the 

purchase price was payable in various payments, including a deposit, a sum certain at 

closing, a secured promissory note to the sellers, and a total of $60,000 to be paid 

pursuant to three non-competition agreements. Id. at 920. The Virginia Supreme Court 

rejected an argument that the non-competition agreements were separate, personal service 

contracts. Id. at 921. Instead, the court determined that the four contracts formed an 

integrated contract because the sum due under the non-competition agreements was 

explicitly part of the purchase price of the business under the purchase agreement. Id.

The Virginia Supreme Court has also found that agreements not executed by the 

same parties may nonetheless constitute an integrated contract. In Countryside 

Orthopaedics, for instance, the court found an integrated contract comprised of four 

agreements: two employment agreements executed by Countryside Orthopaedics and 

two respective physicians, a Stock Purchase Agreement executed by the physicians, and a 

Stockholders’ Agreement executed by all three parties. 541 S.E.2d at 284. The court 

held that these documents constituted a single transaction despite the fact that each of the 

contracts was not signed by all three parties because “all the parties knew about the 

agreements and executed them at the same time as part of a single transaction to 

accomplish an agreed purpose.” Id. The court was also persuaded by the fact that “some 

of the agreements contain[ed] explicit references to the other agreements.” Id. at 285.
15

Also instructive is Parr v. Alderwoods Grp., Inc., 604 S.E.2d 431 (Va. 2004). The 

transaction at issue in that case involved four agreements: an asset purchase agreement, a 

non-competition agreement, a lease, and a management agreement. Id. at 432. In 

reviewing the agreements, the Virginia Supreme Court rejected the argument that the 

management agreement was “a contract separate and apart from” the asset purchase 

agreement. Id. at 435. The court found that the management agreement and asset 

purchase agreement should be construed “as a single integrated contract” because they 

cross-referenced each other and contained certain provisions written in identical 

language. Id. The court explained that those references “reflect[ed] the parties’ 

knowledge and understanding of the interrelationship between the contracts and 

provide[d] strong support for the proposition that the parties intended that the documents 

constitute a single transaction.” Id. The court further reasoned that, although the four 

contracts “identified discrete acts required of the parties,” the contracts all shared the 

same result and purpose. Id. Also relevant was the fact that the provisions of the 

management agreement “could not be performed” without the acquisition of the business 

through the purchase agreement and the lease of the property. Id. As the court stated, 

“[t]he absence of any one of the agreements would frustrate the purpose of the 

transaction.” Id.

Moreover, it is well-established that insurance may be sold and purchased by way 

of more than the pages of the policy itself. See 2 Couch on Insurance § 21:21

(“Endorsements, riders, marginal references, and other similar writings are a part of the 

contract of insurance and are to be read and construed with the policy proper.”). Counsel 
16

for AUCRA conceded during oral argument that an insurance contract is broader than an 

insurance policy and that a policy endorsement, for example, would be considered part of 

the insurance contract.

2.

With these principles in mind, we examine the relationship between the Binder, 

RPA, and the CNI workers’ compensation insurance policies. Both the RPA and the first 

CNI policy went into effect on the same day, one day after Minnieland executed the 

Binder and RPA. Issuance of the policy was expressly conditioned on Minnieland’s prior 

execution of the RPA. Therefore, as contemplated by the parties, execution of the RPA 

would temporally precede issuance of the insurance policy. See Seabulk Offshore, Ltd. v. 

Am. Home Assurance Co., 377 F.3d 408, 419 (4th Cir. 2004) (“Under Virginia law, a 

contract is made when the last act to complete it is performed, and in the context of an

insurance policy, the last act is the delivery of the policy to the insured.” (citation 

omitted)). And the entire program went into effect at the same time, on January 15, 2013.

The subject matter of the documents is also the same: the workers’ compensation 

insurance issued to Minnieland, including the manner in which the payroll, premiums, 

and losses in connection with the insurance coverage would be calculated and how the 

risk would be distributed. The Binder represented Minnieland’s acceptance of the 

EquityComp program, and through the Binder, Minnieland requested that Applied 

Underwriters, Inc. “through its affiliates and/or subsidiaries . . . cause to be issued” 

workers’ compensation insurance coverage to Minnieland. J.A. 40. The RPA also 

discusses the insurance coverage; it notes that workers’ compensation insurance coverage 
17

“will be provided” to Minnieland by “one or more of the Issuing Insurers,” defined as 

affiliates of Applied Underwriters, Inc. J.A. 30–31. The RPA establishes Minnieland’s 

participation in a segregated cell to be funded in part by “a portion of the premium and 

losses” under the RPA. J.A. 30. The premium and losses are calculated pursuant to the 

RPA’s Schedule 1. Id. And Schedule 1 “applies . . . to all payroll, premium, and losses 

occurring under the [CNI workers’ compensation insurance] Policies.” J.A. 36.

The documents also internally reference each other and set forth each other’s 

terms. The Binder formally requests the issuance of workers’ compensation insurance 

coverage subject to Minnieland’s execution of the RPA. The RPA references the 

workers’ compensation policies explicitly, and Minnieland was required to execute the 

RPA before those policies would issue. Schedule 1 of the RPA establishes the manner in 

which Minnieland’s fees for the EquityComp program as a whole would be calculated. 

That is, Schedule 1 applies to all premiums and losses under the actual insurance policies. 

In fact, the billing statements for Minnieland’s participation in the EquityComp program 

show that Minnieland was charged a single “pay-in amount” each month for the 

“Workers’ Compensation Program.” J.A. 45, 47, 49 (emphasis added). The RPA also 

waives Minnieland’s right to choose deductibles for its workers’ compensation insurance 

policies, and the Binder acknowledges that waiver. See J.A. 31 (§ 5), 40.

The RPA and insurance policies are linked in other ways as well. The RPA 

provides that its early cancellation terms apply if any one of the insurance policies is 

cancelled prior to the end of the RPA’s three-year term. J.A. 31 (§ 4). The RPA also 

provides that Minnieland and AUCRA’s obligations under the RPA survive the active 
18

term of the RPA “and shall be extinguished only when [AUCRA] no longer has any 

potential or actual liability to the Issuing Insurers with respect to the [workers’ 

compensation insurance] Policies.” J.A. 31 (§ 7). The RPA additionally provides that, in 

the event Minnieland defaults under the RPA “or under any other agreement with any 

affiliates of [AUCRA] (Affiliated Agreements),” AUCRA “may take all reasonable steps 

to protect its and its affiliates’ interests.” J.A. 31 (§ 9). The RPA goes on to state that 

“[t]he parties hereto shall have the right . . . to offset or recoup any balances due from one 

to the other under [the RPA] or any Affiliated Agreements.” Id. Those Affiliated 

Agreements would include the insurance policies issued by CNI, an AUCRA affiliate. 

The RPA also sets forth the terms that apply if CNI were required to provide workers’ 

compensation insurance coverage outside of the active term of the RPA. J.A. 31 (§ 4).

These explicit internal references, interrelated terms, and shared subject matter are 

strong evidence that the parties intended these documents to be part of one integrated 

transaction. See Countryside Orthopaedics, 541 S.E.2d at 285; Musselman, 533 S.E.2d at 

921.

To be sure, the documents were not executed by the same parties. The Binder was 

signed by Minnieland as an acceptance of the EquityComp program proposal apparently 

drafted by ARS, a subsidiary of Applied Underwriters, Inc., to whom the EquityComp 

trademark is registered. See J.A. 23 (defining “we” as Applied Risk Services). The RPA 

was executed between Minnieland and AUCRA, another subsidiary of Applied 

Underwriters, Inc. J.A. 30. And the insurance policies were produced by Applied Risk 
19

Services, Inc., another subsidiary of Applied Underwriters, Inc., with CNI, yet another 

Applied Underwriters, Inc. subsidiary, as the insuring entity. J.A. 42–44.

Nonetheless, the EquityComp program is promoted and sold as “[o]ne unified 

program for your business needs across all states” provided by Applied Underwriters, 

Inc., “a premier financial services group of companies with leading experience in the 

casualty insurance, reinsurance and business services disciplines.” J.A. 24–25 (emphases 

added). The EquityComp program is marketed as being “effected through a separate 

reinsurance transaction issued in conjunction with a fully insured, guaranteed cost, 

workers’ compensation policy.” J.A. 24. In fact, the Producer’s Quote Transmittal sent 

to the agent who brokered this deal for Minnieland expressly stated that the program 

proposed to Minnieland was “valid only if presented prior to expiration, in its original 

form, and in its entirety without modification.” J.A. 29 (emphasis added). And the 

Binder makes clear that insurance coverage was conditioned on execution of the RPA. 

Therefore, absent execution of the RPA, the insurance coverage would not have been 

offered as proposed. See Nat’l Convention Servs., LLC v. Applied Underwriters Captive 

Risk Assurance Co., Inc., 239 F. Supp. 3d 761, 786 (S.D.N.Y. 2017) (examining the 

workers’ compensation insurance program offered by AUCRA and its affiliates and 

noting that the RPA “would serve no purpose” without the approved guaranteed cost 

insurance policies and that “it is plausible that the two can be treated as one 

undertaking”); see also Parr, 604 S.E.2d at 435 (finding integrated contract where one 

contract’s terms could not be performed in the absence of other contracts).
20

Additionally, the RPA contemplates that its terms will apply to AUCRA’s 

affiliates. The RPA provides that “[n]othing in this Agreement, expressed or implied, is 

intended to confer upon any party, other than the parties hereto and their affiliates, 

successors and assigns, any rights, remedies, obligations or liabilities under or by reason 

of this Agreement, except as expressly provided herein.” J.A. 35 (§ 19) (emphasis 

added). The RPA also provides that “[a]ll existing obligations from each party to the 

other or to third parties shall remain in force as of the expiration of the Active Term until 

this Agreement is terminated.” J.A. 31 (§ 4) (emphasis added). These provisions further 

suggest that Minnieland and AUCRA intended the RPA to be part of an integrated 

transaction with AUCRA’s affiliates. See Countryside Orthopaedics, 541 S.E.2d at 284.

During oral argument, counsel for AUCRA highlighted that, despite the RPA’s 

Schedule 1, the RPA does not charge “premiums”; it merely explains what happens to the 

premiums that are paid under the policies. This, however, does not render the RPA a 

standalone contract. Instead, it lends support to Minnieland’s argument that the RPA and 

the CNI policies must be read as one integrated contract. The policies set forth an 

estimated annual premium that is not subject to the RPA’s Schedule 1 calculations. J.A. 

42–44. The policies also contain a Short Rate Cancelation Policyholder Notice that 

explains how the final premium will be calculated if the policies are cancelled by 

Minnieland. J.A. 761–63. The RPA’s Schedule 1, on the other hand, purports to 

establish the total fee to be paid by Minnieland for the EquityComp program as well as 

any early cancellation fee that may be due. J.A. 36–37.
21

Schedule 1’s calculations, however, incorporate the provisions of the CNI policies. 

Schedule 1 states that it “applies as of the Effective Date [January 15, 2013] to all 

payroll, premium, and losses occurring under the Policies.” J.A. 36. Schedule 1 explains 

that “[a]n amount equal to the premium earned under the Policies in excess of the Loss 

Pick Containment Amount multiplied by the applicable Exposure Group Adjustment 

Factor multiplied by the Allocation Factor listed in Table B, will be allocated to the 

Participant’s cell.” J.A. 36 (§ 2). Thus, although Minnieland was billed one monthly fee 

for the EquityComp program, the premium amount set forth in the policies was part of 

that monthly fee and was included in calculating the total amount that would be due 

under the program as a whole. Absent the CNI policies, the calculations in Schedule 1—

including the amount to be allocated to Minnieland’s segregated cell—would be 

impossible to make.

The early cancellation provision of the RPA also depends on the cancellation 

provisions of the CNI policies. The RPA’s early cancellation provision applies if either 

Minnieland cancels the RPA or if any of the insurance policies are “cancelled or nonrenewed prior to the end of the Active Term” of the RPA. J.A. 31 (§ 4). That 

cancellation policy, described in Schedule 1, states that certain of the factors used to 

calculate premiums and losses will be increased in the event of early cancellation and that 

Minnieland will be required to pay, among other things, “any remaining premium, 

including short rate penalties, due under the Policies.” J.A. 37 (§ 6) (emphasis added). 

Those “short rate penalties” are the early termination provisions of the insurance policies. 

See, e.g., J.A. 761 (“Short Rate Cancelation Policyholder Notice”). And the short rate 
22

penalties apply when the policy is cancelled by Minnieland. Id. Therefore, when the

short rate cancellation provisions of the policies apply, they are another integer of the 

formula used under the RPA to calculate the total amount due under the EquityComp 

program. In the absence of the CNI policy terms, the RPA’s Schedule 1 calculations and 

early cancellation provisions make no sense. See Musselman, 533 S.E.2d at 921.

We do not ignore that Minnieland chose to sue only AUCRA and to base its 

claims only on the RPA. However, because the RPA was but one component of an 

integrated insurance sale, we must examine the related documents and the relationship 

between the affiliated entities. Daugherty, 385 S.E.2d at 574. In the absence of the CNI 

policies, the RPA would have been pointless and nonsensical; and in the absence of the 

RPA, there would have been no insurance coverage. Nothing in the record suggests that 

Minnieland could have simply paid the premiums listed in the CNI policies, without 

paying the amounts set forth in the RPA’s Schedule 1, and maintained its workers’ 

compensation coverage; the RPA expressly provides for the opposite result. Because the 

EquityComp program was marketed and sold as a package deal, Minnieland’s failure to 

execute the RPA would have frustrated the purpose of the transaction. See Parr, 604 

S.E.2d at 435.

In sum, the documents, considered together, show that the purpose of the Binder, 

RPA, and CNI policies was one: to provide Minnieland with workers’ compensation 

insurance coverage while allowing Minnieland the opportunity to keep its insurance costs 

low by sharing in the underwriting risk. We need not determine specifically whether the 

RPA constitutes a policy endorsement or rider. Regardless of the label that may attach, 
23

the RPA and insurance policies constitute an integrated transaction and must be read as 

one contract.

C.

Having determined the scope of the contract at issue, we must now decide whether 

the integrated contract is a contract of insurance under Virginia Code § 38.2–312. The 

Virginia Code does not define “insurance contract.” It does define “insurance,” however, 

as “the business of transferring risk by contract wherein a person, for a consideration, 

undertakes (i) to indemnify another person, (ii) to pay or provide a specified or 

ascertainable amount of money, or (iii) to provide a benefit or service upon the 

occurrence of a determinable risk contingency.” Va. Code § 38.2–100. The Code also 

lists the required terms of “[e]ach insurance policy or contract”:

1. The names of the parties to the contract;

2. The subject of the insurance; 

3. The risks insured against; 

4. The time the insurance takes effect and, except in the case 

of group insurance, title insurance, and insurance written 

under perpetual policies, the period during which the 

insurance is to continue; 

5. A statement of the premium, except in the case of group 

insurance and title insurance; and 

6. The conditions pertaining to the insurance.

Va. Code § 38.2–305.5

 5 Minnieland cites to Virginia common law for the essential terms of an insurance 

contract. See Resp. Br. 20–21; Grp. Hospitalization Med. Serv., Inc. v. Smith, 372 S.E.2d 

(Continued)
24

Neither party argues that the terms of the CNI policies themselves fail to meet the 

statutory requirements for insurance contracts. In fact, AUCRA acknowledges that the 

CNI policies meet Virginia’s requirements. Opening Br. 7 n.3. Construing the CNI 

policy terms as integrated with those of the RPA, as though the terms of each were 

written in a single document, Countryside Orthopaedics, 541 S.E.2d at 284, it becomes

clear that the contract at issue is an “insurance contract” under Virginia law. 

Accordingly, the district court properly determined that the RPA is an insurance contract 

for the purposes of Virginia Code § 38.2–312.

D.

We note, as Minnieland does, that we are not the first to determine that the 

program marketed by Applied Underwriters, Inc. is insurance. In fact, several state 

insurance commissioners have determined that the EquityComp program and its sister 

program, SolutionOne, are not only subject to insurance regulations, but also violate 

those regulations. For example, the Vermont Department of Financial Regulation has 

barred Applied Underwriters, Inc. from selling the RPA in conjunction with guaranteed

 

159, 160 (Va. 1988) (listing “essential terms” of insurance contract as: “(1) the subject 

matter to be insured; (2) the risk insured against; (3) the commencement and period of the 

risk undertaken by the insurer; (4) the amount of insurance; and (5) the premium and time 

at which it is to be paid” (citation omitted)). AUCRA argues that, since the addition of 

the definition of “insurance” to the Virginia Code in 2001, this common law definition is 

no longer controlling. Opening Br. 32–33. The Virginia Supreme Court has not applied

the common-law definition in connection with the statutory definition of “insurance.” 

However, the common-law elements are essentially the same as the statutory 

requirements for every insurance policy. Therefore, an evaluation of the contract at issue 

under either the statutory factors or the common-law definition should yield the same 

result.
25

cost insurance policies in Vermont after concluding that the RPA “de facto operated as a 

retrospective rating plan, replacing [CNI’s] guaranteed-cost workers’ compensation 

insurance policy with an unfiled, unapproved retrospective rating plan.” J.A. 233. 

Similarly, the Wisconsin Office of the Commissioner of Insurance entered into an 

agreement with ARS and CNI that they will “cease and desist from marketing, binding, 

issuing and renewing SolutionOne and EquityComp policies and any similarly designed 

policies and programs that involve side agreements that affect the terms of the workers’ 

compensation policy, including but not limited to reinsurance agreements.” J.A. 375. 

The California Insurance Commissioner likewise found that the EquityComp program 

and its RPA violate the California Insurance Code. See Decision and Order, In the 

Matter of the Appeal of Shasta Linen Supply, Inc., No. AHB-WCA-14-31 (Dep’t of Ins., 

State of Cal. June 20, 2016), http://www.insurance.ca.gov/0250-insurers/0500-legalinfo/0600-decision-ruling/0100-precedential/upload/ShastaLinenSupplyInc.pdf.

Other courts faced with the RPA and similar related documents have also 

suggested that the program marketed by Applied Underwriters, including the RPA, is 

insurance. See, e.g., Nat’l Convention Servs., 239 F. Supp. 3d at 786 (observing that the 

RPA and guaranteed cost policies “plausibly serve the common purpose of providing 

workers’ compensation insurance at rates that are affected by loss experience”); Nielsen 

Contracting, Inc. v. Applied Underwriters, Inc., 22 Cal. App. 5th 1096, 1116–17 (Cal. Ct. 

App. 2018) (determining that the RPA’s provisions were meant to replace those of the 

insurance policies and that the Applied Underwriters affiliated entities were “so 

enmeshed” and “intertwined” that the RPA and insurance policies should be considered 
26

together); Citizens of Humanity, LLC v. Applied Underwriters Captive Risk Assurance 

Co., Inc., 909 N.W.2d 614, 632 (Neb.) (stating that “the RPA has the hallmarks of a 

retrospective rating plan” and concluding that the RPA is an “agreement concerning or 

relating to an insurance policy” under Nebraska law), cert. denied, 139 S. Ct. 274 (2018).

While each of these other jurisdictions has evaluated the RPA under different laws 

and for different purposes, the general consensus has consistently been that the RPA is 

subject to insurance regulations. We join that consensus in holding that the RPA at issue 

here is an insurance contract under Virginia law. Because arbitration provisions in 

insurance contracts are void under Virginia law, Va. Code § 38.2–312, AUCRA must 

face Minnieland’s claims in court.

IV.

For these reasons, we affirm the judgment of the district court.

AFFIRMED.